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charlesarthur : antitrust   128

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Google to ask rivals to bid to be default search on Android phones • Bloomberg
Natalia Drozdiak:
<p>Alphabet’s Google will require rivals to bid in order to become listed as alternative search providers on Android smartphones, a move to try to keep additional antitrust scrutiny at bay.

Starting next year, Google will prompt users to make a choice between Google and three other rival options as their default search provider. Google <a href="https://blog.google/around-the-globe/google-europe/update-android-search-providers-europe/">invited search providers to bid as part of an auction</a> on the new choice screen, which will appear when a user sets up a new Android smartphone or tablet in Europe for the first time.

The European Commission, the bloc’s antitrust body, last year fined Google €4.3bn ($4.8bn) for strong-arming device makers into pre-installing its Google search and Chrome browser, giving it a leg up because users are unlikely to look for alternatives if a default is already preloaded. The EU ordered Google to change that behavior and threatened additional fines if it failed to comply.

Eric Leandri, chief executive of Paris-based search engine Qwant, called Google’s move "a total abuse of the dominant position" to "ask for cash just for showing a proposal of alternatives."

…A European Commission spokeswoman said the EU would be "closely monitoring the implementation of the choice screen mechanism" and noted that the changes allow rival search engines the possibility to strike deals with smartphone and tablet manufacturers to pre-install their services.</p>


Seems fair, as long as Google is obliged to bid, and its losing bid price goes to the winner, or distributed to the other bidders if Google has the highest bid. If the EU says it got its dominant position through monopoly abuse, why should it be allowed to continue monetising it?
google  antitrust  search  android  auction 
23 days ago by charlesarthur
Justice Department announces broad antitrust review of Big Tech • The Verge
Makena Kelly:
<p>“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”

The investigation will address broad concerns over whether Big Tech is stifling competition, the Wall St Journal said, and will be separate from the department’s probes of Google and Apple that were reported earlier this summer that are intended to take a closer look at individual potential violations. The review reported today will look into search engines, social media platforms, and retail, but not focus on any individual company or practice.

<a href="https://www.justice.gov/opa/pr/justice-department-reviewing-practices-market-leading-online-platforms">In a press release, the Justice Department said</a> the review “will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online.” The Department declined further comment beyond the release.

At Attorney General Barr’s confirmation hearing this past January, he told senators that he would like to see the Justice Department take a harder look at whether companies like Google and Amazon were abusing their market dominance.</p>


The press release is super-vague. If it were any more vague it would be written in white text on a white background.
us  antitrust 
4 weeks ago by charlesarthur
Celebritynetworth’s statement submitted to the US House Subcommittee on Antitrust • Medium
Brian Warner set up a site called CelebrityNetWorth - and then Google noticed it:
<p>By 2014 we had a staff of 12 writers, developers and designers. We were thriving and even entertaining acquisition offers. At the time, I thought of our site as one of Google’s best partners and that we had limitless potential. I could never have imagined that within three very painful years CelebrityNetWorth would be brought to the brink of insolvency. And the culprit wouldn’t be shifting user tastes or a technological change. The culprit was Google.

On April 23, 2014, I received an email from a Data Researcher at Google. In subsequent calls and emails the Data Researcher explained that net worth queries were one of Google’s most consistently popular categories of search. As such, she was tasked with finding an API or dataset from our site that would help “enhance user experience at Google Search”. If we granted Google access to an API, any user who searched for a celebrity’s net worth would be shown a large box with our answer at the top of the search result page.

I asked the Data Researcher why we would ever allow this. What benefit could giving away our most valuable asset possibly create for CNW? Clearly this would cause a catastrophic drop in traffic since users would no longer need to visit our site and therefore would no longer generate ad revenue. When pressed, the Google team said it would be good exposure for our brand. What they left unsaid was that the implementation of such a scheme would have accelerated our demise. Google’s diminutive (and sometimes non-existent) attribution to original content creators means fewer clicks and eyeballs to the web. The nebulous suggestion that “exposure” would make up for this somehow demonstrates how starkly different Google’s motives are today.

On this same call I asked if we could be paid a flat fee or a royalty for providing an API. I was told they would not pay a fee and if we did not agree to give them an API they would either make one on their own or scrape one together from other sources.
I declined Google’s request to provide an API to our data.</p>

Things didn’t go well subsequently.
Google  antitrust 
4 weeks ago by charlesarthur
EU opens Amazon antitrust investigation • The Verge
Jon Porter:
<p>The EU’s Competition Commission has <a href="http://europa.eu/rapid/press-release_IP-19-4291_en.htm">opened a formal antitrust investigation</a> into Amazon to investigate whether the company is using sales data to gain an unfair advantage over smaller sellers on the Marketplace platform. The Commission says it will look into Amazon’s agreements with marketplace sellers, as well as how Amazon uses data to choose which retailer to link to using the “Buy Box” on its site. The announcement comes on the same day that Amazon announced changes to its third-party seller service agreement in response to a separate antitrust investigation by German regulators.

“E-commerce has boosted retail competition and brought more choice and better prices,” said the EU’s Competition Commissioner Margrethe Vestager. “We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”

Responding to the news, Amazon told The Verge that it “will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”</p>


Hmm. Tesco, Sainsbury and other supermarkets sell their own-brand products in their supermarkets while selling third party products at the same time. What's the difference, exactly? That Amazon can reorganise its store on the fly, where a supermarket can't?
amazon  ec  antitrust 
5 weeks ago by charlesarthur
Apple files response to Spotify complaint in Europe • 9to5Mac
Chance Miller:
<p>In March, Spotify’s public PR campaign against Apple focused on the company of charging a 30% “tax” on all App Store transactions. In actuality, Apple now says that Spotify isn’t paying the 30% fee on any of its subscribers.

Essentially, Spotify only offered the ability to sign up for a subscription through its iOS app from 2014 until 2016. For subscriptions, Apple charges a 30% fee for the first year, then a 15% fee each year after that. All of the subscribers that Spotify acquired though its iOS app are long since out of that one-year window.

Apple also underscores in its response that Spotify only pays Apple a fee on just over 0.5% of its total subscribers. As noted by CNET, Spotify has around 100 million paying subscribers. Apple says that Spotify acquired 680,000 subscribers through its iOS app. That means that Spotify gives Apple a cut on only 0.68% of its total subscribers.

This response from Apple marks the first time Apple has formally responded to Spotify’s European Commission complaint. Immediately after Spotify’s initial PR campaign in March, Apple publicly responded to the accusations made by Spotify, but as of earlier this month, it had not yet filed a formal response to the commission.</p>


Well that's quite the response. Although, of course, the complaint is about a matter of law, not number.
apple  spotify  antitrust 
8 weeks ago by charlesarthur
DOJ antitrust chief stresses role of competition in digital economy • WSJ
Brent Kendall, Kristina Peterson and Keach Hagey:
<p>[US Assistant Attorney General and head of antitrust, Makan] Delrahim’s speech, which aired at a conference whose attendees included a prominent Google economist, stressed that dominant companies can raise competition concerns in ways other than higher prices. The issue has particular relevance in the digital economy, where some companies give away their services free.

“Price effects alone do not provide a complete picture of market dynamics, especially in digital markets in which the profit-maximizing price is zero,” he said.

Antitrust enforcers are concerned about harms to innovation, product quality and privacy, the DOJ antitrust chief said. He compared today’s tech giants to the Standard Oil monopoly of the late 19th and early 20th century.

“Like today’s tech giants, Standard Oil was pioneering and generated a number of important patents. Scholars have noted, however, that Standard Oil’s innovation slowed as it became an entrenched monopolist,” Mr. Delrahim said.

The Journal reported May 31 that the Justice Department’s antitrust division was laying the groundwork for an antitrust investigation of Google, after reaching a jurisdictional agreement with the Federal Trade Commission. The department hasn’t commented on whether it was planning such a probe.

Senator Elizabeth Warren on Tuesday sent letters to Mr. Delrahim and a department ethics representative seeking the top antitrust official’s recusal. She cited Mr. Delrahim’s work for Google in 2007 as it sought approval from the Federal Trade Commission to buy internet ad firm DoubleClick, saying he “should not be supervising investigations into former clients who paid him tens of thousands of dollars to lobby the federal government.”</p>


Still going to be interested in how they interpret the Sherman antitrust doctrine without leaning on price. There's never been such a case in the US, as far as I know. (Corrections welcome.)
doj  antitrust 
10 weeks ago by charlesarthur
Monopsony, not monopoly, is the tech industry’s biggest threat • Fast Company
Glenn Fleishman:
<p>The flip side of monopoly, a monopsony results when one company is the sole buyer of a given product or service, including contract and employee labor. Like a monopoly, a monopsony can also result in higher prices and stagnating wages.

The paradox of the digital economy is that certain monopsonies have kept prices low. Logically, you would think that companies that have enormous power to flex would reap the highest profit they can. But we’re in an odd market moment, one that seemingly can’t last. Competition may drive prices down, but companies can’t infinitely squeeze vendors or sell below cost forever. At some point, suppliers balk or go under, or monopsonists crack as their business models prove unsustainable – or courts order changes. Is the end nigh?

Digital economy upstarts – even those 20-plus years old – may face avid competition for what they offer. Amazon isn’t the only company that can sell you any given book – thousands can. In a reader comment on an article at Deadline in 2014 about an Amazon/Hachette pricing dispute, Ward Anderson wrote, “Amazon sells about 50% of the books in North America. And the books it does not sell are readily available elsewhere. That’s not a monopoly.”

Similarly, you can opt to take a Lyft or a taxi instead of an Uber. And hotels, motels, and even Craigslist room rentals compete with AirBnb.

Yet regulators, consumers, and skeptics have feared that tech giants might exercise a de facto monopoly because they drown out other options through attention and convenience. In a monopoly scenario, prices would rise. So far, however, across a wide swath of products and services, they’ve remained low, and many large firms are known to price below cost, or are at least suspected of doing so. This can be illegal under the Sherman Act if this behavior is found to be predatory, as in a 1993 case Walmart lost. Such outcomes are rare, though. The FTC tuts-tuts at the notion of low prices being problematic these days, so long as they are not specifically designed to create a monopoly and raise prices.</p>


In a sense, what we (as users) see as monopolies are what those on the other side see as monopsonies. Websites don't have much choice about optimising for Google; it's important to be on that first page of search results. Uber drivers, Lyft drivers, do they have a choice? Amazon has shown its power as a monopsony over book publishers a number of times. Perhaps the internet makes it easier for them to arise.
antitrust  monopsony 
10 weeks ago by charlesarthur
Developers sue Apple over App Store practices • Reuters
Stephen Nellis:
<p>Two app developers on Tuesday sued Apple Inc over its App Store practices, making claims similar to those in a lawsuit brought by consumers that the U.S. Supreme Court recently allowed to proceed.

California-based app developer Donald R. Cameron and Illinois Pure Sweat Basketball alleged in federal court in San Jose, California that Apple engaged in anticompetitive conduct by only allowing the downloading of iPhone apps through Apple’s official App Store. Apple also requires developers to price their apps in tiers ending in 99 cents and takes up to a 30% commission from developers on the sale of apps.

“This practice is analogous to a monopsonist retailer paying artificially low wholesale prices to its suppliers,” the developers said in their suit. “In both paradigms a competitive market would yield better post-commission or wholesale prices, and fairer profit, for developers’ digital products.”

The claims center on the same Apple practices highlighted in a lawsuit brought by consumers, arguing that Apple’s practices have artificially inflated the price of software in the App Store.</p>


So Apple is being sued by both consumers (which is what the recent Supreme Court decision allowed) and developers? As Ben Thompson notes in his Stratechery newsletter, this doesn't really make sense, legally speaking, because it creates a sort of double jeopardy - as though a store were being sued both by its customers and its suppliers. If the monopsonist retailer is paying artificially low wholesale prices, then customers must be benefiting from lower prices. If the developers' argument is that Apple kept prices high, then developers are getting more money, so what's the beef?
apple  appstore  apps  antitrust  lawsuit 
11 weeks ago by charlesarthur
Google Chrome, the perfect antitrust villain? • alexdanco.com
Alex Danco wrote this on Thursday, before the WSJ story that the DOJ was looking at Google on antitrust grounds:
<p>Chrome’s market dominance in recent years is a great example of how Google has used its scale and influence to draw the back-end plumbing of the internet more tightly under its control, all under the banner of “it’s all open source; how could we be bad guys?” It’s not like we haven’t seen this playbook before: an Android phone may be running open source Linux (cool!), but without Google Services and the Google Play Store, it’s a brick. They’ve mastered separation of the strategic openness of Android with the accompanying strategic closed-ness of everything that runs on it and makes it actually worth something. 

The biggest fight here recently is over standardizing the rules around DRM: the Digital Rights Management framework of laws and restrictions that came into being through the Digital Millennium Copyright Act and govern the rules around digital access and permission. (The free software community, as you might guess, absolutely hates DRM. I’ll probably write another Snippets issue soon about this.)

Google has done something sneaky here: by successfully lobbying for DRM standards in web browsers across the whole internet, Google has made it so that anyone can build or modify their own Chrome-based browser as they want to, just like before. But in order for it to be able to play video (a pretty big prerequisite of the modern internet), they have to license a proprietary DRM plugin from Google called Widevine. 

This isn’t the first time Google has used this tactic, and it’s a good one: “Oh, nice open source project you’ve got there! You’re free to do anything you want with it, which obviously makes us the progressive good guys of the Free Internet. However, if you want it to actually work in any real-world conditions, then you’ll need to license our proprietary stuff and play by our very particular rules.” </p>


Certainly a better argument than many on this.
google  chrome  antitrust 
11 weeks ago by charlesarthur
FTC gets jurisdiction for possible Facebook antitrust probe • WSJ
Brent Kendall and John D. McKinnon:
<p>The Justice Department and FTC now have established that each is responsible for antitrust issues for two of the Big Four tech companies: the Justice Department has authority over Google and Apple, while the FTC has oversight of Facebook and Amazon.

It was unclear whether the allocations of Apple and Amazon were related to the same agreement that divided Google and Facebook between the agencies. But Google and Facebook appear to be closest to being in the agencies’ investigative crosshairs.

The FTC and Justice Department share authority in enforcing US antitrust law and at times must work out turf arrangements regarding which agency will handle what issues.

The FTC already has spent more than a year investigating Facebook on privacy issues related to how it handles users’ data. That probe, however, doesn’t focus on antitrust questions of whether Facebook is stifling competition in the digital realm. The fact that the commission formally secured jurisdiction on those issues suggests it is considering even more rigorous scrutiny of the social media giant.</p>


As with Google, it's a bit difficult to know on what grounds the FTC would go ahead. Where's the consumer harm? Sure, Facebook's takeover of Instagram and WhatsApp cornered the market in social media. But it's pretty difficult to see a persuasive case emerging.
ftc  facebook  antitrust 
11 weeks ago by charlesarthur
How Qualcomm shook down the cell phone industry for almost 20 years • Ars Technica
Timothy Lee:
<p>I read every word of Judge Koh's book-length opinion, which portrays Qualcomm as a ruthless monopolist. The legal document outlines a nearly 20-year history of overcharging smartphone makers for cellular chips. Qualcomm structured its contracts with smartphone makers in ways that made it almost impossible for other chipmakers to challenge Qualcomm's dominance. Customers who didn't go along with Qualcomm's one-sided terms were threatened with an abrupt and crippling loss of access to modem chips.

"Qualcomm has monopoly power over certain cell phone chips, and they use that monopoly power to charge people too much money," says Charles Duan, a patent expert at the free-market R Street Institute. "Instead of just charging more for the chips themselves, they required people to buy a patent license and overcharged for the patent license."

Now, all of that dominance might be coming to an end. In her ruling, Koh ordered Qualcomm to stop threatening customers with chip cutoffs. Qualcomm must now re-negotiate all of its agreements with customers and license its patents to competitors on reasonable terms. And if Koh's ruling survives the appeals process, it could produce a truly competitive market for wireless chips for the first time in this century.</p>


The quotes in this article - taken from the court documents and testimony - are eye-opening. Charging not on the value of the patents, but on the retail value of the phone. An incredible scam. Now, there's a worthwhile piece of antitrust action. Speaking of which…
qualcomm  antitrust 
11 weeks ago by charlesarthur
Justice Department is preparing antitrust investigation of Google • WSJ
Brent Kendall and John D. McKinnon:
<p>The department’s antitrust division in recent weeks has been laying the groundwork for the probe, the people said. The Federal Trade Commission, which shares antitrust authority with the department, previously conducted a broad investigation of Google but closed it in 2013 without taking action, though Google made some voluntary changes to certain business practices.

The FTC and the department have been in talks recently on who would oversee any new antitrust investigation of a leading US tech giant, and the commission agreed to give the Justice Department jurisdiction over Google, the people said.

With turf now settled, the department is preparing to closely examine Google’s business practices related to its search and other businesses, the people said.

It couldn’t immediately be learned whether Google has been contacted by the department. Third-party critics of the search giant, however, already have been in contact with Justice Department officials, some of the people familiar with the matter said.</p>


This story is amazingly thin on detail, which hasn't changed through being repeated over the weekend up and down the techosphere. I doubt Google is that worried, at least existentially; the US DoJ hasn't done nearly as many tech cases as the EU, and the big one - against Microsoft - hardly stopped it, long-term.
google  doj  antitrust 
11 weeks ago by charlesarthur
Qualcomm’s practices violate antitrust law, judge rules • WSJ
Tripp Mickle, Brent Kendall and Asa Fitch:
<p>Judge Koh found that Qualcomm violated antitrust law, charging unreasonably high royalties for its patents and eliminating rivals. She challenged its practice of collecting billions of dollars by charging royalties on a percentage of a smartphone’s price.

“Qualcomm’s licensing practices have strangled competition” in key parts of the modem chip market for years, “and harmed rivals, OEMs, and end consumers in the process,” the judge wrote. She added that the company’s lead in developing modem chips for smartphones using 5G, the new generation of cellular technology, made it likely that behavior would continue.

The judge ordered that Qualcomm negotiate or renegotiate licensing agreements with customers free of unfair tactics, such as threatening to cut off access to its chips. Qualcomm also must license its patents to rival chip makers at fair and reasonable prices, and can’t sign exclusive supply agreements with smartphone makers like Apple that block rivals from selling chips into devices.

Judge Koh said Qualcomm must submit to monitoring for the next seven years to ensure it abides by the remedies.

Qualcomm on Wednesday said it plans to seek an immediate stay of the judgment and an expedited appeal to the Ninth US Circuit Court of Appeals in San Francisco.</p>


I wonder if Apple is going to ask for a refund on all the money it paid Qualcomm after Intel couldn't cope with the demands of building 5G modems. But Qualcomm's tactic of charging based on the final pricing didn't work for Motorola against Microsoft on Wi-Fi patents. Couldn't work here.
qualcomm  antitrust  patents 
may 2019 by charlesarthur
Friend portability is the must-have Facebook regulation • TechCrunch
Josh Constine:
<p>as the FTC considers how many billions to fine Facebook or which executives to stick with personal liability or whether to go full-tilt and break up the company, I implore it to consider the root of how Facebook gets away with abusing user privacy: there’s no simple way to switch to an alternative.

If Facebook users are fed up with the surveillance, security breaches, false news, or hatred, there’s no western general purpose social network with scale for them to join. Twitter is for short-form public content, Snapchat is for ephemeral communication. Tumblr is neglected. Google+ is dead. Instagram is owned by Facebook. And the rest are either Chinese, single-purpose, or tiny.

No, I don’t expect the FTC to launch its own “Fedbook” social network. But what it can do is pave an escape route from Facebook so worthy alternatives become viable options. That’s why the FTC must require Facebook offer truly interoperable data portability for the social graph.

In other words, the government should pass regulations forcing Facebook to let you export your friend list to other social networks in a privacy-safe way. This would allow you to connect with or follow those people elsewhere so you could leave Facebook without losing touch with your friends. The increased threat of people ditching Facebook for competitors would create a much stronger incentive to protect users and society.</p>


Good idea. Facebook has been able to strangle companies by denying them access to the social graph that people need to be able to build a presence on a new social network, while boosting its own by crosslinking Facebook/Instagram/WhatsApp data, all purloined from your phonebook.
socialgraph  facebook  antitrust  regulation 
may 2019 by charlesarthur
Supreme Court allows antitrust lawsuit against Apple to proceed • The New York Times
Adam Liptak and Jack Nicas:
<p>The legal question in the case, Apple v. Pepper, was whether the lawsuit was barred by a 1977 decision in Illinois Brick Co. v. Illinois, a case that allowed only direct purchasers of products to bring federal antitrust lawsuits. Apple argued that it was an intermediary and so not subject to lawsuit.

The majority rejected that argument. “The plaintiffs’ allegations boil down to one straightforward claim: that Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps,” Justice Kavanaugh wrote.

Apple argued that app developers set their own prices, meaning that consumers should not be able to sue the company. Justice Kavanaugh responded that the argument missed the economic reality of the relationship between Apple and app developers.

“A ‘who sets the price’ rule,” he wrote, “would draw an arbitrary and unprincipled line among retailers based on retailers’ financial arrangements with their manufacturers or suppliers.”

“Under Apple’s rule a consumer could sue a monopolistic retailer when the retailer set the retail price by marking up the price it had paid the manufacturer or supplier for the good or service,” he wrote. “But a consumer could not sue a monopolistic retailer when the manufacturer or supplier set the retail price and the retailer took a commission on each sale.”</p>

Here's <a href="https://www.supremecourt.gov/opinions/18pdf/17-204_bq7d.pdf">the Supreme Court ruling</a>. In effect, it says that Apple's a monopolistic retailer, and thus able to set prices (why is it 30% on top? How does one shop around to get apps at a different price?). Apple's going to have to let apps be sold in a different way, or at least allow different transaction paths to be signposted.

Apple's response: "Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them… We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.”
apple  antitrust 
may 2019 by charlesarthur
Opinion: breaking up Facebook is not the answer • The New York Times
Nick Clegg, former deputy prime minister of the UK, now a PR for Facebook, in a placed op-ed at the NYT:
<p>In this competitive environment, it is hard to sustain the claim that Facebook is a monopoly. Almost all of our revenue comes from digital advertising, and most estimates say Facebook’s share is about 20% of the United States online ad market, which means 80% of all digital ads happen off our platforms.

The second misunderstanding is of antitrust law. These laws, developed in the 1800s, are not meant to punish a company because people disagree with its management. Their main purpose is to protect consumers by ensuring they have access to low-cost, high-quality products and services. And especially in the case of technology, rapid innovation. That is exactly where Facebook puts its attention: building the best products, free for consumers, and funded by advertisers.

What antitrust law isn’t about is size alone. In Facebook’s case, our size has not only brought innovation, it has also allowed us to make a huge investment in protecting the safety and security of our services.

Over the past two years we’ve focused heavily on blocking foreign adversaries from trying to influence democratic elections by using our platforms. We’ve done the same to protect against terrorism and hate speech and to better safeguard people’s data. And the resources that we will spend on security and safety this year alone will be more than our overall revenues at the time of our initial public offering in 2012. That would be pretty much impossible for a smaller company.</p>


And here's Clegg, <a href="https://inews.co.uk/opinion/columnists/nick-clegg-defence-facebook-silicon-valley-tech-giants/">writing in 2017</a> (after he'd left government), in The Independent:
<p>As an old-fashioned liberal who believes in the virtues of competition, I remain perplexed at the way in which US competition law only seems to care about the effect of near monopoly market dominance by a tiny number of big players if and when it increases the prices paid by consumers.</p>
(H/t Olivia Solon, who spotted the latter.)
facebook  antitrust 
may 2019 by charlesarthur
It’s time to break up Facebook • The New York Times
Chris Hughes, formerly of Facebook (he worked to develop its News Feed), with a very long article about why he thinks it's time for antitrust action, which boils down to this:
<p>How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares.

Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up.
Mark Zuckerberg after ringing the opening bell for the Nasdaq stock market on the day his company went public.

Some economists are skeptical that breaking up Facebook would spur that much competition, because Facebook, they say, is a “natural” monopoly. Natural monopolies have emerged in areas like water systems and the electrical grid, where the price of entering the business is very high — because you have to lay pipes or electrical lines — but it gets cheaper and cheaper to add each additional customer. In other words, the monopoly arises naturally from the circumstances of the business, rather than a company’s illegal maneuvering. In addition, defenders of natural monopolies often make the case that they benefit consumers because they are able to provide services more cheaply than anyone else.

Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.</p>
facebook  regulation  antitrust 
may 2019 by charlesarthur
Brussels poised to probe Apple over Spotify's fees complaint • FT
Rochelle Toplensky:
<p>Spotify’s complaint centres on Apple’s policy of charging digital content providers a 30% fee for using its payment system for subscriptions sold in its App Store. The policy applies to Spotify and other music subscription services but not apps, such as Uber.

After considering the complaint and surveying customers, rivals and others in the market, the EU competition commission has decided to launch a formal antitrust investigation into Apple’s conduct, according to three people familiar with the probe.

Apple and Spotify both declined to comment.

EU enforcers can require companies to change business practices they deem unlawful and levy fines of up to 10% of a company’s global turnover. The investigations have no set deadlines and can take years to resolve. However, companies can speed up the process and avoid fines by offering to settle the probes with binding promises of behavioural change.

In an interview in March after filing the complaint, Daniel Ek, Spotify’s chief executive, told the Financial Times that the company’s long-running battle with Apple had become “untenable”. He warned that the music-streaming service would raise prices if Apple continued to charge the 30% fee. 

Deezer, a rival music-streaming service, and BEUC, a European consumers’ group, echoed Spotify’s concerns. </p>

Well, this is going to get interesting. Assume the EC rules for Spotify: Apple will either have to reduce its 30% fee (to zero?) or let companies offer alternative payment schemes, as Google does.
Apple  spotify  antitrust 
may 2019 by charlesarthur
Time to bring Google Shopping case to a close
Ramon Tremosa i Balcells (ALDE, ES) is a member of the European parliament’s Economic and Monetary Affairs committee:
<p>More than 18 months ago Google’s abuse of its power in online shopping resulted in a €2.42bn fine from the EU. By promoting its own shopping comparison service at the top of its own search results, Google had crossed the line between being dominant and breaking the law.

Commissioner Vestager told Google it had 90 days to change its ways or face further penalties. "What Google has done is illegal under EU antitrust rules," she told the world. “It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation.”

Over 500 days later it is hard to see that Google has done enough to avoid further action.

According to the few companies that have, so far, survived Google’s abuse of dominance, the market has further deteriorated. The “point of no return” is plainly visible for what is left of Europe’s once prosperous and vibrant shopping comparison industry…

…I’ve already gone on the record to say that technical solutions can stop Google’s abuse without disrupting online shoppers or merchants. A rotation mechanism on the shopping search results page itself could allow the appearance of Google and its competitors. Google would be unable to exploit its search algorithms while users would get greater choice and relevant results.

Indeed, this approach would suit today’s mobile devices, perhaps rebooting the consumer-focused innovation in shopping comparison that died away once Google began to dominate the sector.

If the Commission feels the need, then other more radical options are still on the table. There are, for example, voices calling for the “unbundling” of Google’s various services, breaking up a tech giant that has problems not just in shopping but also in areas such as Android and AdSense.</p>


Interesting idea about the rotation mechanism, but who would choose who gets to be in it? I still prefer a system where you do well in organic search. It's honest and nobody adjudicates.
google  shopping  antitrust 
march 2019 by charlesarthur
Antitrust: Commission fines Google €1.49bn for abusive practices in online advertising • European Commission
:
<p>Google is an intermediary, like an advertising broker, between advertisers and website owners that want to profit from the space around their search results pages. Therefore, AdSense for Search works as an online search advertising intermediation platform.

Google was by far the strongest player in online search advertising intermediation in the European Economic Area (EEA), with a market share above 70% from 2006 to 2016. In 2016 Google also held market shares generally above 90% in the national markets for general search and above 75% in most of the national markets for online search advertising, where it is present with its flagship product, the Google search engine, which provides search results to consumers.

It is not possible for competitors in online search advertising such as Microsoft and Yahoo to sell advertising space in Google's own search engine results pages. Therefore, third-party websites represent an important entry point for these other suppliers of online search advertising intermediation services to grow their business and try to compete with Google.

Google's provision of online search advertising intermediation services to the most commercially important publishers took place via agreements that were individually negotiated. The Commission has reviewed hundreds of such agreements in the course of its investigation and found that:

• Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.<br />• As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google's adverts and request a minimum number of Google adverts. As a result, Google's competitorswere prevented from placing their search adverts in the most visible and clicked on parts of the websites' search results pages.<br />• As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.</p>
antitrust  eu  alphabet  google  advertising 
march 2019 by charlesarthur
European commissioner for competition Margethe Vestager interviewed on Kara Swisher podcast • Recode
Vestager, answering Swisher about the effect of the big tech companies on society:
<p>we have seen interference in national elections, referendas. We have seen a lot of data breaches. We have seen a lot of an economy that is shifting quite a lot into a use of data that is unprecedented. We are in the middle of a revolution, a technological industrial revolution. And I think as societies we have quite a lot of catching up to do to get in control.

Just as we had back in the days where we had sort of the Industrial Revolution of chemistry, when pesticides and all of that became, you know, the big guy in town, people thought that you could do amazing things. Just spraying everything, adding everything to products. It took some time before we realized that we have to get in control because otherwise it would be damaging for our ability to reproduce, for clean drinking water, all of that.

Now [we are] to the very last degree in control of that, and I think we want to do the same thing. In my own home country, we had a lot of discussions about chemicals in feeding bottles. Huge discussions. If you’d say, “I’ve never ever have my baby have a feeding bottle,” but you have no second thoughts of giving them an iPad.</p>


Plenty to chew on in the full interview. Vestager will leave office in November; be interesting to see if her replacement has the same sort of feel for trustbusting, or will be relatively ineffectual on this as her predecessor, Joaquin Almunia, was.
vestager  antitrust  europe 
march 2019 by charlesarthur
Addressing Spotify’s claims • Apple
<p>The only contribution that Apple requires is for digital goods and services that are purchased inside the app using our secure in-app purchase system. As Spotify points out, that revenue share is 30% for the first year of an annual subscription — but they left out that it drops to 15% in the years after.

That’s not the only information Spotify left out about how their business works:

• The majority of customers use their free, ad-supported product, which makes no contribution to the App Store.<br />• A significant portion of Spotify’s customers come through partnerships with mobile carriers. This generates no App Store contribution, but requires Spotify to pay a similar distribution fee to retailers and carriers.<br />• Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero.

Let’s be clear about what that means. Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100% of the revenue.</p>


It would be quite a data point if we found out how many people signed up for Spotify through the iOS app. Especially given how much bigger Google Play is in user numbers.
apple  spotify  app  antitrust 
march 2019 by charlesarthur
Margrethe Vestager to hit Google with another fine • Financial Times
Rochelle Toplensky:
<p>The latest investigation has focused on Google’s AdSense business, which places its search box on third-party websites, such as news websites. The commission can fine up to an additional $13bn — which is 10% of the latest global turnover of Google’s parent company, Alphabet — but the penalty is expected to be significantly smaller than the maximum.

As outlined in their 2016 charge sheet, EU officials worried that Google “artificially reduced choice and stifled innovation in the market” by contractually restricting how third-party websites display search ads from rivals.

The EU case centres on Google demands, introduced in 2006, that required a number of popular third-party websites to use its ad service exclusively if they wanted to include the Google search box on their site. In 2009, the company relaxed the restrictions to allow the websites to show competing advertisers on their pages, but required they display a minimum number of Google ads in prime locations and give Google the right to authorise changes to competitors’ ads. The contract terms were ultimately phased out from 2016.

While next week’s fine will bring an end to the AdSense investigation, EU antitrust officials continue to scrutinise Google’s behaviour in other services — such as dedicated search for travel, jobs and local businesses — and could open fresh probes.</p>
google  adsense  antitrust 
march 2019 by charlesarthur
Spotify boss warns of price rises in Apple antitrust dispute • Financial Times
Anna Nicolaou, Tobias Buck and Madhumita Murgia:
<p>Spotify will raise prices if Apple continues to charge it a 30% fee for using its ubiquitous App Store, the music-streaming service’s chief executive has said.

The warning from Daniel Ek comes just days after Spotify filed an antitrust complaint with the EU accusing Apple of unlawfully abusing its App Store dominance to favour its own Apple Music service.

“You can see us having no other choice than to accept the 30 per cent fee put in place, which essentially would mean we would have to raise our prices for consumers all over the world,” Mr Ek said in an interview.

“Apple [would get] an unfair benefit of being able to compete at much lower prices,” he added. “I obviously think our service is superior to theirs, but a 30 per cent price difference is a lot.”

In its EU complaint, Spotify said that Apple had required all iPhone app makers exclusively to use the Apple payment system for the past eight years.

Apple has introduced a 30% fee, applied to Spotify and all other digital content providers in the first year after users download their app, for using the payment system. Other apps, such as Uber and Deliveroo, are not subject to the fee, which drops to 15% after a year.

Mr Ek’s comments are the latest in a long-running battle between the two companies, which the Spotify chief said became “untenable” a year ago.</p>


Translated: Spotify wants to put prices up. Apple's a good way to complain about that. Also, how many people does it have subscribed via the App Store, given that it stopped offering that some time last year? I hear Apple's not very happy about the PR presentation on this, but it's biding its time.
spotify  apple  antitrust 
march 2019 by charlesarthur
Consumers and innovators win on a level playing field • Spotify
Daniel Ek, CEO of Spotify:
<p>Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.

Apple operates a platform that, for over a billion people around the world, is the gateway to the internet. Apple is both the owner of the iOS platform and the App Store—and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.

To illustrate what I mean, let me share a few examples. Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do.</p>


Spotify needs to satisfy just two tests. Is Apple dominant, ie has 40% of the market? And is it using its power in one market to annexe another, or keep rivals out?

Afraid it doesn't have a dominant position in the European market - it has 15-20%. (Higher in some countries, lower in others.) And it hasn't kept Spotify off the App Store. The one thing it might get called on is preventing apps calling for people to subscribe on the web, rather than in-app. But without a dominant position, it's moot.

Don't think they'll file this in the US: they'd need to show that Apple (which has a much stronger position - about 40% of smartphones) is doing something that raises prices for consumers. But the app store levy is like a cost of business, same as selling through a retailer. And there are options.
spotify  apple  antitrust 
march 2019 by charlesarthur
Where Warren’s wrong • Stratechery
Ben Thompson has a huge writeup on presidential hopeful Senator Elizabeth Warren's proposal to regulate tech firms:
<p> I have called Facebook’s acquisition of Instagram <a href="https://www.recode.net/2018/6/2/17413786/ben-thompson-facebook-google-aggregator-platform-code-conference-2018">The Greatest Regulatory Failure of the Past Decade</a>, and called for an end to social networks being allowed to buy other social networks. I do have qualms about the idea of retroactively undoing deals, but I do think Senator Warren is directionally correct in this case.

More broadly, as I explained in <a href="https://stratechery.com/2019/the-value-chain-constraint/">The Value Chain Constraint</a>, the price of being an Aggregator is tuning your company to the value chain within which you compete; it follows that all of these companies have will face significant challenges moving into new spaces with new value chains. To that end, what makes the most sense from a management perspective is leveraging the tremendous amounts of cash thrown off by their core businesses to acquire and invest in companies competing in different value chains.

On the flipside, to the extent regulators wish to constrain Aggregators, the single most effective lever is limiting acquisitions. There are significant problems with this, to be sure, particularly when it comes to the incentives for new company creation (most successful exits are acquisitions, not IPOs), but at least this is a remedy that is somewhat approaching the problem.</p>


Worth settling in if you want to think about this topic.
apple  google  facebook  politics  antitrust 
march 2019 by charlesarthur
Here’s how we can break up Big Tech • Medium
Elizabeth Warren, 2020 Democratic presidential hopeful:
<p>my administration would restore competition to the tech sector by taking two major steps:

First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.

Companies with an annual global revenue of $25bn or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties…

…Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.

Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including:<br />Amazon: Whole Foods; Zappos<br />Facebook: WhatsApp; Instagram<br />Google: Waze; Nest; DoubleClick

Unwinding these mergers will promote healthy competition in the market — which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.</p>


She hopes this would stop Google from demoting competitors in search results, though it's hard to see that leopard ever changing its spots. Warren's ideas are certainly a step forward; would they apply to foreign companies that passed that threshold, such as - let's say - Chinese ones?
google  warren  merger  antitrust 
march 2019 by charlesarthur
Advocacy groups urge FTC to pursue Facebook breakup • WSJ
John McKinnon:
<p>Several advocacy groups are urging the Federal Trade Commission to seek a breakup of Facebook as it weighs possible penalties against the social media company for privacy violations.

Facebook has acknowledged that the data firm Cambridge Analytica improperly obtained personal data of millions of users. The FTC is nearing completion of an investigation into the matter and is weighing penalties, including a substantial fine.

Among other remedies, “the FTC should require Facebook to unwind the acquisition of both WhatsApp and Instagram” for its failure to protect the data of those apps’ users, according to a draft letter from the groups to the FTC. A copy of the letter, dated Jan. 24, was obtained by The Wall Street Journal.

“Facebook has operated for too long with too little accountability,” said Marc Rotenberg, president of the Electronic Privacy Information Center, one of the groups expected to sign the letter. Others include Color of Change, which advocates racial justice, and Open Markets Institute, which promotes business competition.</p>


Certainly would make a huge difference if it didn't have Instagram. It might - might - even be feasible to unwind the three companies from each other. Controlling social media aggregation is the next antitrust frontier; the problem is how to frame the legal battle that would justify it.

But as an ex-FTC law professor points out, it's not in the FTC's powers to order antitrust action like that.
facebook  antitrust 
january 2019 by charlesarthur
Supreme Court could allow suit over Apple iPhone apps' sales • The New York Times
<p>The issue before the high court at this early stage of the suit is whether the case can proceed at all. Justice Stephen Breyer, who used to teach antitrust law at Harvard Law School, said the consumers' case seemed straightforward and in line with a century of antitrust law.

Apple argues it's merely a pipeline between app developers and consumers, and that iPhone users have no claims against Apple under federal laws that prohibit unfair control of a market.

Tens of thousands of software developers set the prices and agree to pay Apple a 30 percent commission on whatever they sell, the lawyer representing Apple said in the courtroom. If anyone should be able to sue Apple, it's a developer, Daniel Wall said. "There have been plenty of disputes, but none has ever gone to litigation," he said.

Chief Justice John Roberts was alone among the nine justices who seemed prepared to agree with Apple.

Among the justices who appeared to be on the other side, Justice Elena Kagan said consumers appear to have a direct relationship with Apple. "I pick up my iPhone. I go to Apple's App Store. I pay Apple directly with credit card information that I've supplied to Apple. From my perspective, I've just engaged in a one-step transaction with Apple," Kagan said.

Justice Brett Kavanaugh said if consumers are paying more than they should, then perhaps they should be able to sue. The relevant federal antitrust law says "any person injured" can sue, Kavanaugh said.

His comments could align him with justices who would allow the suit to proceed. In other cases, the court has ruled there must be a direct relationship between the seller and a party complaining about unfair, anti-competitive pricing.</p>


Decision expected by late spring. In general, how difficult the judges' questions are has an inverse or zero relationship to how the decision falls. But journalists love to think they've glimpsed a tell.
apple  app  antitrust 
november 2018 by charlesarthur
How much for that app? U.S. top court hears Apple antitrust dispute • Reuters
Andrew Chung:
<p>When iPhone users want to edit blemishes out of their selfies, identify stars and constellations or simply join the latest video game craze, they turn to Apple Inc’s App Store, where any software application they buy also includes a 30% cut for Apple.

That commission is a key issue in a closely watched antitrust case that will reach the US Supreme Court on Monday. The nine justices will hear arguments in Apple’s bid to escape damages in a lawsuit accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should.

The justices will ultimately decide a broader question: Can consumers even sue for damages in an antitrust case like this one?

Apple, which is appealing a lower court decision that revived the proposed consumer class-action lawsuit, says no, citing a decades-old Supreme Court precedent. The Cupertino, California-based technology company said that siding with the iPhone users who filed the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars annually in US retail sales.</p>


Here's a <a href="https://www.supremecourt.gov/qp/17-00204qp.pdf">brief summary of the case at hand</a>, which is called Apple Inc v Pepper, and is the first case on Monday.

"The question presented is: Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense."
apple  antitrust 
november 2018 by charlesarthur
Inside the private Justice Department meeting that could lead to new investigations of Facebook, Google and other tech giants • The Washington Post
Brian Fung and Tony Romm:
<p>A meeting of the country’s top federal and state law enforcement officials on Tuesday could presage sweeping new investigations of Apple, Amazon, Facebook, Google and their tech industry peers, stemming from lingering frustrations that these companies are too big, fail to safeguard users' private data and don’t cooperate with legal demands.

The gathering at the Justice Department had been designed to focus on social media platforms and the ways in which they moderate content online, following complaints from President Trump and other top Republicans that Silicon Valley companies deliberately seek to silence conservative users and views online.

Attorney General Jeff Sessions opened the meeting by raising questions of possible ideological bias among the tech companies and sought to bring the conversation back to that topic at least twice more, according to D.C. Attorney General Karl A. Racine.

But the discussion proved far more wide-ranging, as attorneys general from eight states and the District — and officials from five others — steered the conversation toward the privacy practices of Silicon Valley. Those in the meeting did not zero in on specific business tactics, but they did cover such issues as how companies collect user data and what they do with it once the information is in their hands.

“We were unanimous. Our focus is going to be on antitrust and privacy. That’s where our laws are,” Jim Hood, Mississippi’s attorney general, said in an interview.</p>


So basically they told Sessions to recall the US's First Amendment, and moved on to topics not covered by that legal topic. I do like the idea of Sessions discovering his, er, session being hijacked and made to talk about serious issues.
antitrust  tech  america 
september 2018 by charlesarthur
European Commission Antitrust fines four consumer electronics manufacturers for fixing online resale prices • EC
<p>Asus, Denon & Marantz, Philips and Pioneer engaged in so called "fixed or minimum resale price maintenance (RPM)" by restricting the ability of their online retailers to set their own retail prices for widely used consumer electronics products such as kitchen appliances, notebooks and hi-fi products.

The four manufacturers intervened particularly with online retailers, who offered their products at low prices. If those retailers did not follow the prices requested by manufacturers, they faced threats or sanctions such as blocking of supplies. Many, including the biggest online retailers, use pricing algorithms which automatically adapt retail prices to those of competitors. In this way, the pricing restrictions imposed on low pricing online retailers typically had a broader impact on overall online prices for the respective consumer electronics products.

Moreover, the use of sophisticated monitoring tools allowed the manufacturers to effectively track resale price setting in the distribution network and to intervene swiftly in case of price decreases.

The price interventions limited effective price competition between retailers and led to higher prices with an immediate effect on consumers.

In particular, Asus, headquartered in Taiwan, monitored the resale price of retailers for certain computer hardware and electronics products such as notebooks and displays. The conduct of Asus related to two Member States (Germany and France) and took place between 2011 and 2014. Asus intervened with retailers selling those products below the resale prices recommended by Asus and requested price increases.</p>


Total fines: €111m, the biggest (€63m) going against Asus. I wonder if the US FTC has seen similar activity? Also: seven years to reach this stage from the start of the activity. Is that good?
antitrust  denon  asus  marantz  philips 
july 2018 by charlesarthur
Firefox and the four-year battle to have Google to treat it as a first-class citizen • ZDNet
Chris Duckett:
<p>Buried in Mozilla's issue tracker is a <a href="https://bugzilla.mozilla.org/show_bug.cgi?id=975444">bug</a> that kicked off in February 2014, and is yet to be resolved: Have Google treat Firefox for Android as a first-class citizen and serve up comparable content to what the search giant hands Chrome and Safari.

After years of requests, meetings, and to and fro, it has hit a point where the developers of Firefox are experimenting by manipulating the user agent string in its nightly development builds to trick Google into thinking that Firefox Mobile is a Chrome browser.

Not only does Google's search page degrade for Firefox on Android, but some new properties like Google Flights have occasionally taken to outright blocking of the browser. Over the past couple of months, I have been using Firefox Mobile as my primary mobile browser and happened upon Google Flights, and although I wasn't blocked, it did fail in places -- at the time of writing, though, it seems the site is fine.

As for Google's flagship search page, Firefox users get an inferior version that does not even have the tools bar that allows users to narrow searches down by date. I find it hard to believe that in 2018, the world's most visited web page cannot find the small amount of time and resources it would take to deliver a comparable page to non-WebKit browsers, even if they do make up a minuscule amount of its visitors.</p>


Hmm, how would one pursue this as a monopoly issue?
browser  firefox  antitrust 
july 2018 by charlesarthur
FTC Democrat hires tech industry critic who's taken aim at Amazon • POLITICO
Nancy Scola:
<p>FTC Democratic Commissioner Rohit Chopra is hiring Lina Khan, one of the country's foremost critics of the growing market power of U.S. tech companies and the author of a landmark paper making an antitrust case against Amazon.

Chopra's move is a sign that the newly-minted commissioner is preparing to take a tough stand against Silicon Valley. He's doing so as political figures on both the left and right, including President Donald Trump, call for greater checks on the tech industry.

A 2017 graduate of Yale Law School, Khan made her name with an academic paper called "<a href="https://www.yalelawjournal.org/note/amazons-antitrust-paradox">Amazon's Antitrust Paradox</a>" that argues that the current U.S. approach to antitrust law hasn't kept pace with technology and fails to accurately measure the anti-competitive threat posed by companies like Amazon.

She maintained that simply because companies offer Americans obvious benefits like lower prices — criteria under the so-called consumer welfare test — that doesn't mean they should be exempt from antitrust scrutiny. In the paper, she floated the idea of either breaking up Amazon or regulating it like a public utility.

Khan has more recently served as the director of legal policy at the Open Markets Institute, an advocacy group that has become perhaps Washington's highest-profile champion for the idea that the U.S. approach to antitrust has failed to counter the negative effects of technology behemoths like Amazon, Google and Facebook.</p>


That's an interesting hire. The FTC decided against taking antitrust action against Google in 2012, based on that "consumer welfare" test. Will things change?
ftc  antitrust  amazon 
july 2018 by charlesarthur
Editorial board: break up Google • The Boston Globe
<p>the problem at hand is not merely economic. “A handful of people working at a handful of tech companies steer the thoughts of billions of people every day,” notes former Google design ethicist Tristan Harris. A recent <a href="https://promarket.org/unprecedented-power-digital-platforms-control-opinions-votes/">study</a> of 10,000 people from 39 countries suggests Google “has likely been determining the outcomes of upwards of 25 percent of the national elections in the world for several years now, with increasing impact each year as Internet penetration has grown.”

Why is a breakup of Google so unthinkable? Google’s products are undeniably convenient. And, at least on the surface, they’re free; average users are paying not with money, but with their personal data. The company has a near-spotless public image. The famous maxim from the company’s early years — “don’t be evil” — helped cement Google’s public image as one of the good guys.

It is ironic that the company perhaps most responsible for unleashing a tidal wave of human creativity, learning, and, yes, competition is also stifling it. It is frustrating competition, discouraging innovation, punishing American business, and distorting the free marketplace of commerce and ideas. Europe has led the wider fight over the right to privacy and the regulation of data, but the time is right for the United States to lead on dismantling tech monopolies — starting with the most powerful player. So, how to start?</p>


Its suggestion: break it into search, YouTube, Android, cloud services and "the rest". This begins to feel like the noise around Microsoft before the DoJ case.
google  antitrust 
june 2018 by charlesarthur
Google braced for Brussels penalty over abuse of market dominance • FT
Rochelle Toplensky:
<p>Brussels is preparing to hit Google next month for abusing its dominance through the Android mobile operating system, concluding the most important of a trio of EU antitrust investigations into the company.

Margrethe Vestager, the EU’s competition commissioner, is poised to announce the negative finding within weeks, according to people familiar with the case, marking the most significant regulatory intervention made against Google’s business model.

A penalty is expected in the Android case, but its size is unclear. The commission is empowered to impose fines of up to $11bn — which is 10 per cent of the global turnover of Google’s parent company Alphabet — but typically decisions are at the lower end of the range.

The decision will mark an escalation of the commission’s battle with Google, which began eight years ago with an investigation into comparison shopping, then only a narrow part of online commerce. Though that case concluded with a €2.4bn fine, it has not led to significant changes to Google’s business.</p>


And that's the problem. A one-time fine doesn't get anything done. Vestager hasn't altered the competitive landscape; she hasn't had an impact. If you're the competition commissioner, you have to make competition happen.
google  vestager  ec  antitrust 
june 2018 by charlesarthur
Google’s nemesis: meet the British couple who took on a giant, won... And cost it £2.1bn • Wired
Rowland Manthorpe speaks to Adam and Shivaun Raff, who set up Foundem - a price comparison site - in 2007 and then saw Google demote it in favour of its own offerings:
<p>Because Google is hosted across numerous data centres, Adam was able to watch, horrified, as the penalty swept across the search engine, downgrading Foundem for every search except its own name.

One second Foundem ranked first or third (a status it maintained on Yahoo! and Microsoft’s Bing). The next, it was down in the 70s and 80s. For huge swathes of online life, Google is the default entry point. In a single stroke, Foundem had effectively been disappeared from the internet.

The Raffs knew instantly this was an existential threat. “We didn’t kid ourselves for one second,” says Adam. “If Google didn’t lift this penalty, we’d be dead.” But when they tried to contact Google, it was like sending messages into the void. Through a contact, they reached the firm’s head of search quality. The response came back from a colleague, saying he had “no specific insights to offer”.

No matter what they tried – and over the next two years the Raffs pursued every conceivable avenue – there was no reasoning with Google. Their only option was to find alternative sources of revenue, by licensing Foundem’s software to publishers such as Bauer and IPC Media.

To the Raffs, this is Google’s real crime: its inaccessibility and unwillingness to respond, even to legitimate complaints. “We’ve never said that the fault was being penalised,” says Adam. “Collateral damage in complex algorithms is inevitable. The fault was not having a procedure by which we could appeal and get timely relief.”</p>

The Raffs have done analysis after analysis of the ways that Google's "solutions" to the antitrust complaint on search are self-serving. But it has taken years, and Google's present "solution" is one which was rejected previously. Even though Vestager, the new EC antitrust commissioner, has found against Google, it's too slow.

Justice delayed is justice denied, and this has been delayed at least seven years.
Google  search  antitrust 
february 2018 by charlesarthur
India's antitrust watchdog fines Google for abusing dominant position • Reuters
Aditya Kalra and Aditi Shah:
<p>The Competition Commission of India (CCI) said Google, the core unit of US firm Alphabet, was abusing its dominance in online web search and online search advertising markets.

“Google was found to be indulging in practices of search bias and by doing so, it causes harm to its competitors as well as to users,” the CCI said in a 190-page order.

“Google was leveraging its dominance in the market for online general web search, to strengthen its position in the market for online syndicate search services,” the CCI said.

However, the CCI said it did not find any contravention in respect of Google’s specialized search design, AdWords and online distribution agreements.

A Google spokesman said the company was reviewing the “narrow concerns” identified by the Commission and will assess its next steps.</p>

A fine of $21.7m. Google might be able to handle it. But is anyone keeping count of how many countries Google has been found guilty of antitrust in? Russia, Europe, South Korea, now India..
india  antitrust  google 
february 2018 by charlesarthur
Google rivals ask EU to toughen measures in antitrust case • WSJ
Natalia Drozdiak on how that “Google Shopping” compliance is going:
<p>New third-party data show that Google’s product ads appear in almost all of the product-ad spots it displays as part of the EU remedy. In a report published Monday, search analytics firm Searchmetrics said that only 2% of product-ad spots in Germany show competitors’ ads. In the U.K. the proportion is 0.4%. The researchers tested by recording product-ad results on Google for 2,500 popular keywords in each country.

The new system [introduced by Google, where it bids alongside other shopping sites for shopping ad slots on search results pages] is “nothing game-changing,” nor is it “meaningful enough to be considered a fair and even playing field,” says Harald Schiffauer, managing director of Nextag Inc.’s Guenstiger.de, a German site that bids actively in the Google system.

“It’s really hard to compete,” said Philipp Peitsch, managing director of Idealo, a price-comparison engine owned by Axel Springer SE. “I don’t think it’s a fair proposal.”

Google declined to comment on rivals’ individual allegations, but previously said that its remedy gives rivals the same opportunity as Google to show shopping ads to users.</p>

Google says it has set up the Shopping business as if it were a stand-alone, must-make-profit company. It would be great to see how that company is formed. Does it buy its own computers? Hire its own people? Rent its own offices? Or does it have a very cheap room inside Google staffed with Googlers?

I seem to recall that Foundem, which has done many piercing analyses of the proposals, forecast this outcome.
Foundem  google  shopping  antitrust  eu 
january 2018 by charlesarthur
Internet giants try to soften antitrust rules in credit card case • Bloomberg
Joshua Brustein:
<p>A trade group representing Amazon.com Inc., Facebook Inc., Google, and Uber Technologies Inc. has taken sides in a Supreme Court battle over credit card fees because the internet giants want to shape the future of antitrust rules in their favor.

The top U.S. court is set to hear oral arguments on the lawsuit—Ohio vs. American Express—next month. The dispute started in 2010, when states and the federal government sued American Express Co. for forbidding merchants from steering customers to credit cards that charge lower fees.

The government said this discouraged competition and led to artificially high card fees. American Express argued its business was a two-sided marketplace that must balance the desires of merchants against the need to attract cardholders. The extra fees American Express charged went in part to offer airline miles and other perks to shoppers, the company argued. What looked like bullying merchants was actually just enthusiastic competition against Mastercard Inc. and Visa Inc. for users. 
 
The dispute has no direct connection to Silicon Valley. But it could heavily influence any future antitrust action against tech firms, many of which run two-sided digital marketplaces. In a friend-of-the-court brief filed this week, the Computer and Communications Industry Association said a ruling against American Express would threaten innovation by hampering marketplaces that have to please multiple groups with differing priorities. </p>


Because the big platforms now are about two-sided markets - chokepoints, in simpler language - they'd want something that reassures them.
antitrust  internet  chokepoint 
january 2018 by charlesarthur
“This is serious”: Facebook begins its downward spiral • Vanity Fair
Nick Bilton:
<p>There’s another theory floating around as to why Facebook cares so much about the way it’s impacting the world, and it’s one that I happen to agree with. When Zuckerberg looks into his big-data crystal ball, he can see a troublesome trend occurring. A few years ago, for example, there wasn’t a single person I knew who didn’t have Facebook on their smartphone. These days, it’s the opposite. This is largely anecdotal, but almost everyone I know has deleted at least one social app from their devices. And Facebook is almost always the first to go. Facebook, Twitter, Instagram, Snapchat, and other sneaky privacy-piercing applications are being removed by people who simply feel icky about what these platforms are doing to them, and to society.

Some people are terrified that these services are listening in to their private conversations. (The company’s anti-privacy tentacles go so far as <a href="https://gizmodo.com/facebook-knows-how-to-track-you-using-the-dust-on-your-1821030620">to track the dust on your phone to see who you might be spending time with</a>.) Others are sick of getting into an argument with a long-lost cousin, or that guy from high school who still works in the same coffee shop, over something that Trump said, or a “news” article that is full of more bias and false facts. And then there’s the main reason I think people are abandoning these platforms: Facebook knows us better than we know ourselves, with its algorithms that can predict if we’re going to cheat on our spouse, start looking for a new job, or buy a new water bottle on Amazon in a few weeks. It knows how to send us the exact right number of pop-ups to get our endorphins going, or not show us how many Likes we really have to set off our insecurities. As a society, we feel like we’re at war with a computer algorithm, and the only winning move is not to play.</p>


It's true; I deleted the Facebook app from my phone literally years ago. (If I go there on mobile, it's via the website.) Instagram annoys the hell out of me because of its algorithmic feed; I'd like to see what people have posted just now, not what an algorithm thinks I'd like. I realised the other day that if Twitter moved to an algorithmic feed I'd feel like giving it up.

Bilton thinks there's even a vague possibility Facebook could be extinct - or split from Messenger, Instagram and WhatsApp - in five years.
facebook  use  spiral  antitrust 
january 2018 by charlesarthur
Three ways to remake the American economy for all • The Guardian
Senator Elizabeth Warren is a Democrat senator who might be a candidate for president in 2020. She gave a <a href="http://openmarketsinstitute.org/events/americas-monopoly-moment-work-innovation-and-control-in-an-age-of-concentrated-power/">speech at the Open Markets Institute</a> about dealing with monopoly power, especially in technology:
<p>Donald Trump used to talk about the danger of monopoly. But that talk has pretty much disappeared now that he is president. Once he took the oath, he began stacking his administration with a who’s who of former lobbyists, Wall Street insiders, and corporate executives committed to tilting the scales even further in favor of their powerful friends and against everybody else. And just days ago, the Republican Congress handed out a giant tax giveaway to Wall Street corporations and the super-rich, leaving working families and college students to pick up the tab.

To rebuild an economy that works for everyone, not just the big guys, it is critical to reduce concentrated power in our markets. The federal government has the tools to do it; Congress handed antitrust enforcers those tools over a century ago. But those tools have been sitting on the shelf for decades, gathering dust.

Antitrust enforcers placed those tools on the shelf when they adopted Chicago School principles that narrowed the scope of antitrust laws; they moved away from the goal of protecting competition. It’s time to demand that antitrust enforcers pick up those tools, dust them off, and start enforcing the law again…

…It’s time to hold those corporations accountable for these competition-killing practices. And let’s be clear: holding everyone accountable means everyone. The investigation into Russia’s influence in the 2016 election has exposed how influential giant tech platforms can be. There is no exception in antitrust laws for big tech.

It’s time for antitrust enforcers to start looking critically at the ways in which massive amounts of data can be manipulated in ways that choke off competition.</p>
warren  tech  google  antitrust 
december 2017 by charlesarthur
Regulate Facebook like AIM • Motherboard
Louise Matsakis:
<p>The FCC imposed the restrictions on AOL [forcing it to be interoperable with other instant messaging systems] because the merger with Time Warner created the largest biggest media business in the country. Government regulators feared that the behemoth would become a powerful monopoly, particularly when it came to instant messaging. At the time, AOL had over 140 million customers—or 90% of the market— using AIM as well as its other chat service, ICQ, combined.

The FCC's decision to force AOL to remain open provides a blueprint for how the government could similarly regulate today's gigantic internet platforms, like Facebook.

Stoller said you can look at Facebook—with its over 2 billion monthly users—as having egregious control over our relationships on the internet, or what he calls the "social grid." If Facebook were forced to make room for other services on its platform in the same way AOL made room for other chat apps, new services could emerge.

"Facebook has to allow people to access their relationships however they want through other businesses or tools that are not controlled by Facebook," Stoller said. "Having them control and mediate the structure of those relationships—that's not right."

Of course, people can opt out of Facebook and choose to use other, smaller social networks. But those businesses are essentially unable to thrive because of the hold Facebook has on how we communicate online.</p>


This is a good idea.
facebook  analysis  antitrust  aol 
october 2017 by charlesarthur
Why Google's auction-based proposal does not comply with EC remedy requirements • Foundem
This is an interactive HTML presentation (hooray! The web lives!) by Foundem, the original - and successful - complainant against Google over how shopping searches are ranked.

Google, as noted previously, has suggested that to comply with the EC complaint, it will split its shopping service off from the rest of the business and bid for auctioned-off shopping ad slots.

This obviously doesn't make any difference, unless it were to completely sell it off from Alphabet. Google wins if Google Shopping doesn't win an auction slot, because it gets the ad revenue; Google wins if Google Shopping does get the auction slot, because people may click through. Google wins.

But there doesn't seem to be any way to slice this satisfactorily if Google can sell shopping ad slots - as long, that is, as it suppresses shopping searches in the "organic" search results.
shopping  google  ec  antitrust 
september 2017 by charlesarthur
Google to create shopping service unit to satisfy EU • Bloomberg
Aoife White:
<p>Google will create a standalone unit for its shopping service and require it to bid against rivals for ads shown on the top of its search page, in an effort to satisfy European Union concerns over the display of product results, three people familiar with the investigation said.

Google faces a Thursday deadline to comply with an EU antitrust order for it to give equal treatment in how the search engine shows competitors’ comparison-shopping sites, according to the people, who asked not to be named as the negotiations are private. While the shopping service will remain part of Google, it will operate separately and use its own revenues to bid for ads.

Google was ordered by regulators to stop promoting its own shopping search results over competitors’ and to make changes by Sept. 28 designed to give rivals a better chance to compete, the EU said in June when it fined the company €2.4bn ($2.8bn). The company could be fined up to 5% of daily revenue if it fails to comply…

…While Google Shopping can bid for those slots, it will be run separately to ensure that its bids reflect its own operating costs and aren’t subsidized by Google. Regulators have accepted that the panel is for advertising and slots cannot be given away, the person said. Each slot will be labeled with the name of the service providing the link, such as "By Google," similar to pages that showed up on French and Dutch versions of Google last week.</p>


Not sure that this is going to satisfy rivals. But it might satisfy the EU.
google  shopping  antitrust 
september 2017 by charlesarthur
Google offers to auction off shopping ad spaces to rivals • WSJ
Natalia Drozdiak:
<p>Google has proposed overhauling its shopping search results so that rivals can bid for space to display products for sale, as part of the tech giant’s efforts to comply with the European Union’s antitrust order, according to people familiar with the matter.

Under the proposal, Google would bid against rivals to display products for sale in the space above its general search results, according to the people. Google would set itself a price cap that it wouldn’t be able to bid above, but competitors could do so if they wished.

Rival shopping sites have hit back, saying an auction-based remedy wouldn’t assuage the EU regulator’s demands that the company treat its competitors’ offerings and its own shopping service equally.

The European Commission ordered Google to make the changes to its search results by late September as part of its decision to fine Google a record €2.42bn ($2.89bn) in June for discriminating against rival comparison-shopping sites in its search ranking…

…“While we have yet to see details of Google’s proposal, it seems unlikely that Google could have devised an auction-based remedy that does not fall far short of the equal treatment standard stipulated by the [commission’s] decision,” said Shivaun Raff, chief executive of Foundem.co.uk, a comparison-shopping website that was the first company to file a formal antitrust complaint about Google to the EU.

The auction-based remedy could force Google’s competitors to bid away the majority of their profits to Google, Ms. Raff said. Google could set a high price cap for its own bids, pushing the bids of competitors higher.</p>


As the story points out, this is essentially the same failed proposal Google made a few years ago with the previous competition commissioner, and it's just as absurd. Competitors want access to the free spot at the top of the <em>organic</em> results, which Google presently awards to its Shopping site in a sort of technological nepotism. Competitors like Foundem argue that there should be a clear algorithmic explanation of how that top spot is chosen, so everyone can compete fairly for it.

This will cause another round of complaints, and meanwhile the rivals are ground down further by Google's monopoly.
google  antitrust  europe 
september 2017 by charlesarthur
Google’s influence over its network of influencers • Search Neutrality
Shivaun and Adam Raff run Foundem, the "vertical search" (shopping) site which first complained to the EC about Google's demotion of their site in organic results:
<p>We accept that many of the academics and other professionals within Google’s extensive network of influencers sincerely believe that their pro-Google opinions are their own and are not influenced by their (or their institution’s) financial ties to Google.  However, it is noteworthy how often these opinions are underpinned by an eerily consistent misrepresentation of the basic facts of the Google case that belies, at the very least, a failure to treat Google’s representations of the case with the healthy scepticism one would normally reserve for a defendant.

The criticisms of the EC’s Google Search verdict by Google-funded academics and think tanks have tended to rely on and mirror many of the same fundamental misrepresentations and omissions that Google’s own criticisms of the verdict rely on. For example:

• They tend to focus exclusively on Google’s anti-competitive promotion of its own services (through Universal Search), while ignoring Google’s anti-competitive demotions and exclusions of competing services (through anti-competitive penalties). This is an important omission because any defence of one practice inevitably undermines the defence of the other.

• They neglect to point out that pay-for-placement advertisements are not a substitute for the relevance-based search results they are anti-competitively replacing. This is not a minor omission: paid advertisements are not what users visit Google for, and, when they are used to promote the merchants willing to pay Google the most money for a click rather than those offering users the lowest prices, the resultant user harm is obvious.

• They ignore the inconvenient yet immutable fact that Google only introduced these pay-for-placement advertisements (which underpin all of Google’s misleading ad-based arguments) in February 2013—at least 7 years after the introduction of Google’s anti-competitive practices, 3 years after the start of the EC’s investigation, and 11 months after the commencement of “settlement” negotiations with Commissioner Almunia. (See our December 2016 Paper for some of the history, context, and consumer harm resulting from Google’s progressive blurring of the lines between search results and pay-for-placement ads).

The perception-shaping power of Google’s sophisticated and disciplined PR machine is far-reaching.</p>
google  shopping  antitrust  ec 
september 2017 by charlesarthur
Google appeals against EU's €2.4bn fine over search engine results • The Guardian
Daniel Boffey:
<p>Google is appealing against the record €2.4bn (£2.2bn) fine imposed by the European Union for its abuse of its dominance of the search engine market in building its shopping comparison service.

The world’s most popular internet search engine has launched its appeal after it was fined by the European commission for what was described as an “old school” form of illegality.

The Luxembourg-based general court, Europe’s second-highest, is expected to take several years before ruling on Google’s appeal, which had been widely expected. The Silicon Valley giant had responded to the fine at the time of its announcement by saying that it “respectfully” disagreed with the legal argument being pursued.</p>


But still has to stop boosting its shopping service in contravention of EC rules; has until 28 September to comply. The EC is looking at its proposal on this, apparently.
google  ec  antitrust 
september 2017 by charlesarthur
A serf on Google’s farm • Talking Points Memo
Josh Marshall runs the politics website, and has observed Google's growing monopoly over everything that he and other publishers do online, from ads to email to documents to search to traffic:
<p>What we’ve experienced is a little different. Google is so big and so powerful that even when it’s trying to do something good, it can be dangerous and frightening.

Here’s an example.

With the events of recent months and years, Google is apparently now trying to weed out publishers that are using its money streams and architecture to publish hate speech. Certainly you’d probably be unhappy to hear that Stormfront was funded by ads run through Google. I’m not saying that’s happening. I’m just giving you a sense of what they are apparently trying to combat. Over the last several months we’ve gotten a few notifications from Google telling us that certain pages of ours were penalized for ‘violations’ of their ban for hate speech. When we looked at the pages they were talking about they were articles about white supremacist incidents. Most were tied to Dylann Roof’s mass murder in Charleston.

Now in practice all this meant was that two or three old stories about Dylann Roof could no longer run ads purchased through Google. I’d say it’s unlikely that loss to TPM amounted to even a cent a month. Totally meaningless. But here’s the catch. The way these warnings work and the way these particular warnings were worded, you get penalized enough times and then you’re blacklisted.

Now, certainly you’re figuring we could contact someone at Google and explain that we’re not publishing hate speech and racist violence. We’re reporting on it. Not really. We tried that. We got back a message from our rep not really understanding the distinction and cheerily telling us to try to operate within the no hate speech rules. And how many warnings until we’re blacklisted? Who knows?

If we were cut off, would that be Adexchange (the ads) or DoubleClick for Publishers (the road) or both? Who knows?

…Google is so powerful and so all-encompassing that it can actually do great damage unintentionally. As a general matter, I’d say our worst experiences with Google – and to be fair, none have been that bad – have been cases like these where Google is so big and its customers and products (people are products) are so distant from its concerns that we’ve gotten caught up in or whiplashed by rules or systems that simply don’t make any sense or are affirmatively absurd in how they affect us. One thing I’ve observed with Google over the years is that it is institutionally so used to its ‘customers’ actually being its products that when it gets into businesses where it actually has customers it really has little sense of how to deal with them…

…When I discussed a few of these issues on Twitter a couple days ago, some people said: Well, the publishers brought it on themselves. They went for the cheap clicks or gaming Facebook’s or Google’s algorithms. So they brought it on themselves.

This is true to an extent but I think misses the point. It’s not about anyone’s individual morality. Not the publishers or the platform monopolies. It’s a structural issue. Monopolies are bad for the economy and they’re bad politically. They also have perverse consequences across the board. The money that used to fund your favorite website is now going to Google and Facebook, which doesn’t produce any news at all.</p>


He offers another example to do with email which is almost comical - except it's so potentially disastrous. The strange thing is that Google is becoming so dominant people are either thinking "oh well" or "we must do everything possible not to be in this position". Most are in the former group.
google  advertising  antitrust  journalism  monopoly 
september 2017 by charlesarthur
Landmark Intel judgment critical for other EU antitrust cases • Reuters
Foo Yun Chee:
<p>Europe’s top court will rule on Wednesday whether US chipmaker Intel offered illegal rebates to squeeze out rivals in a judgment that could affect EU antitrust regulators’ cases against Qualcomm and Alphabet’s Google.

The ruling by the Luxembourg-based Court of Justice of the European Union (ECJ) could also provide more clarity on whether rebates are anti-competitive by nature or whether enforcers need to prove the anti-competitive effect.

The European Commission in a 2009 decision said that Intel tried to thwart rival Advanced Micro Devices by giving rebates to PC makers Dell, Hewlett Packard, NEC and Lenovo for buying most of their computer chips from the company.

It handed down a €1.06bn ($1.3bn) fine, a record that was subsequently eclipsed by the €2.4bn fine levied on Google in June this year.

A lower court upheld the EU competition authority’s decision in 2014, but last year an ECJ court adviser backed Intel’s arguments.

An adverse ruling for the Commission on Wednesday could result in a radical review of ongoing cases, said Andrew Ward, a partner at Madrid-based law firm Cuatrecasas.</p>


Hard to see how a rebate isn't, in effect, a price cut or subsidy. This isn't like consumer rebates, where the expectation is that only a small percentage will actually take advantage of them because of the tedium of the rebate process.
intel  antitrust  europe 
september 2017 by charlesarthur
We said Google was dangerously powerful, then Google proved us right • Buzzfeed
Matt Stoller worked at Open Markets - now ejected from the New America thinktank:
<p>At Open Markets, we started with the same questions that most Americans have. What went wrong? Why did we allow a concentrated system of Too Big to Fail banks to crash our economy? Why can’t our industrial system reduce carbon emissions and help limit the impact of climate change?

These kinds of questions about the power of finance and industry have been debated in America for decades, and bankers and industrialists have dedicated vast amounts of their money to influencing that debate. But in recent years, a new class of corporate power has begun to shape our world, prompting a new set of questions: Why have we allowed the internet's information monopolists to seize so much control of our digital lives? And why have they financially strangled our free press, and allowed propaganda and fake news to crawl out of the slime and influence elections?

The answer is monopoly power. The companies that hold that power, led by Google, have become massively influential in Washington — hence the fact that we’ve been thrown out of our think tank and must now set up an independent shop (<a href="http://CitizensAgainstMonopoly.org">CitizensAgainstMonopoly.org</a> is our temporary website). They’re also wielding their power over the rest of corporate America — terrifying everyone from grocery store owners to carmakers and book publishers, and <a href="http://www.businessinsider.com/the-evidence-is-piling-up-silicon-valley-is-being-destroyed-2017-4">even the very Silicon Valley startup scene they were once a part of</a>.

For hundreds of years, Americans realized that this kind of misuse of property in the form of monopoly power was a threat to their political liberties. We saw it for what it was: autocratic.

This was a widely held belief, on the left and on the right. Friedrich Hayek had an entire chapter on the danger of monopolies in his classic political tome The Road to Serfdom. Labor scholars warned that monopolies represented the “dictatorial and fascist trends within our own country.” President Franklin Delano Roosevelt gave a speech to Congress making this same point, and it was a speech that Hayek quoted in his book.

Fundamentally, monopoly power is political power. It lets a small group of people exercise control over a much larger group, which results in both extremes of wealth inequality and extremes of political corruption. It is why anger is bubbling up in most Western democracies, regardless of the voting system or safety net — we are all dealing with the same monopoly institutions.

What Google did, in attempting to silence my colleagues, was in fact a call to action.</p>
google  monopoly  antitrust 
august 2017 by charlesarthur
Google to comply with EU search demands to avoid more fines • Bloomberg
Aoife White and Mark Bergen:
<p>Google will comply with Europe’s demands to change the way it runs its shopping search service, a rare instance of the internet giant bowing to regulatory pressure to avoid more fines.

The Alphabet Inc. unit faced a Tuesday deadline to tell the European Union how it planned to follow an order to stop discriminating against rival shopping search services in the region. A Google spokeswoman said it is sharing that plan with regulators before the deadline expires, but declined to comment further.

The EU fined Google a record 2.4bn euros ($2.7bn) in late June for breaking antitrust rules by skewing its general search results to unfairly favor its own shopping service over rival sites. The company had 60 days to propose how it would "stop its illegal content" and 90 days to make changes to how the company displays shopping results when users search for a product. Those changes need to be put in place by Sept. 28 to stave off a risk that the EU could fine the company 5% of daily revenue for each day it fails to comply.

"The obligation to comply is fully Google’s responsibility," the European Commission said in an emailed statement, without elaborating on what the company must do to comply.</p>


The question really is, how is it going to do this?
google  antitrust 
august 2017 by charlesarthur
The government should fight ‘corporate villainy’ in tech, Senator Cory Booker says • Recode
Eric Johnson:
<p>“We’ve got to start having a conversation in this country: How are we going to measure the success of the tech sector?” [Democratic senator] Booker asked. “Is it by its ability to create a small handful of billionaires, or the ability for us to create pro-democracy forces — empowering individuals, improving quality of life, improving financial security, expanding opportunity — the kind of things we want largely for democracy?”

Booker compared the size and power of Silicon Valley to Wall Street and indicated that he’d like to see America being more aggressive, like the E.U., which levied a $2.7 billion fine levied on Google last month.

“We have regulatory agencies that just aren’t doing their jobs,” Booker said. “You see this with big banks. The entire crisis we just came through, what’s amazing to me is we haven’t learned the lessons and we’re not protecting the consumer.”

“So should the U.S. government take a look at Google?” Romm asked.

“I think the U.S. government absolutely should take a look at Google,” Booker said.

“On grounds for an antitrust case?”

“I think the U.S. government should be far more active in antitrust actions because when they have taken actions, it’s often created collateral benefits to society.</p>
us  technology  legal  antitrust 
july 2017 by charlesarthur
Unjust, unreasonable, and unduly discriminatory: electric utility rates and the campaign against rooftop solar by Ari Peskoe :: SSRN
Ari Peskoe of the Harvard Environmental Policy Initiative:
<p>The century-old technology and business model for electricity distribution is under threat. Decentralized technologies and services now allow consumers to buy less power from their local monopoly provider and customize the timing and price of the electricity they do buy. In response, investor-owned utilities (IOUs), which distribute power to 75% of U.S. homes, are urging state utility regulators to take action to protect the incumbent paradigm.</p>


This is a followup to the NYT story from the other day about lobbying by utilities over the rates paid for solar installations.

From the paper itself (free download):
<p>the average price charged by IOUs to residential ratepayers increased by 50% between 2000 and 2014, and some analysts predict that PV [photovoltaic] power will soon be less expensive than the local IOU’s rate across the country. As the price of central grid power and PV power converge, more ratepayers will find it economical to purchase or lease their own PV, rather than rely solely on the IOU.

The potential for this new paradigm raises several questions, such as: does an electricity system that connects thousands of PV systems ultimately benefit consumers, and how does society socialize the costs of this new grid? This paper does not seek to answer either question. Rather, it presumes that there is enormous uncertainty about how the electricity system will develop. Using regulation to prevent the deployment of a particular set of technologies and services is ill-advised because it locks the industry into existing models and inhibits innovation, which could ultimately harm consumers.

This paper does not argue that specific technologies or services should be deployed today, or even ever. Rather, the paper provides context for understanding ongoing debates between factions representing the central grid and those in favor of increasing decentralization.</p>


In short: solar is disruptive.
antitrust  solar 
july 2017 by charlesarthur
Exclusive: EU considers record fine as panel checks Google Android case - sources • Reuters
Foo Yun Chee:
<p>EU antitrust regulators are weighing another record fine against Google over its Android mobile operating system and have set up a panel of experts to give a second opinion on the case, two people familiar with the matter said.

Assuming the panel agrees with the initial case team's conclusions, it could pave the way for the European Commission to issue a decision against Alphabet's Google by the end of the year.

The Commission in April last year charged Google with using its dominant Android mobile operating system to shut out rivals following a complaint by lobby group FairSearch, US-based ad-blocking and privacy firm Disconnect Inc, Portuguese apps store Aptoide and Russia's Yandex.

The move by the EU competition authority, which hit the company with a €2.4bn ($2.7bn) penalty for unfairly favoring its shopping service last month, could pose a bigger risk for the world's most popular internet search engine because of Android's huge growth potential.

The potential fine is expected to top that €2.4bn penalty.</p>


Compared to the shopping decision, this one will have come down in record time. The argument - that Google used the dominance of Android to shut out rivals - is slightly circular; Android got big in large part because it had Google in there. But the logic will be that it already had desktop dominance (true) and then used that to muscle out would-be rivals.
google  android  antitrust 
july 2017 by charlesarthur
How Margrethe Vestager went after Google • POLITICO
Nicholas Hirst:
<p>As recently as Monday, just hours before Vestager spoke with Pichai, Google’s key Brussels advisers were unaware a decision was imminent — only learning through the press that a verdict that had been predicted to land at the end of July was suddenly expected by the end of the week, by Wednesday, by Tuesday evening, and finally on Tuesday at noon.

They were not the only ones in the dark. Vestager’s tight information control extended even to members of her own team. Hours before the announcement, the scale of the fine was known only to a small circle of insiders close to the commissioner — not to the wider team investigating Google. The date of the announcement was kept from officials in Vestager’s antitrust division not working on the case.

Google’s rivals — the companies bringing the case before the Commission — were none the wiser. Many of them were busy preparing for upcoming meetings scheduled with competition investigators, consultations in which they expected to provide the last of their input before the decision was announced.

The scheduled meetings were just one of several misdirections — intentional or not — that kept the wider world guessing at Vestager’s intentions. In the weeks ahead of the decision, rumors of a fine just over €1 billion circulated among advisers and journalists.

Vestager even managed to keep a tight lid on the information exchanged when she consulted national competition enforcers on the verdict a few weeks ago.

Behind the scenes, in Vestager’s office on the 10th floor at the Commission’s Berlaymont building, preparations for the big day had been taking place for months. A formidable communicator who places a premium on preparation, Vestager spent weeks listening to briefings by senior officials, probing the case’s strengths and weaknesses, running through mock questions and preparing the responses she would deliver from the podium.

One particular concern was that the case would become a flashpoint for transatlantic tension — potentially attracting the fury of U.S. President and tweeter-in-chief Donald Trump. And so Vestager’s office prepped figures and scripted responses so that she would be ready to debunk accusations that the Commission was unfairly targeting U.S. companies.</p>


In the event, Trump's administration doesn't seem to have taken the slightest bit of notice. Also worth reading: there's a <a href="http://www.politico.eu/article/wanted-expert-to-monitor-googles-algorithm-for-e10-million/">€10m contract to monitor Google's algorithm for compliance</a>. Once, I guess, everyone agrees what "compliance" looks like.
google  ec  antitrust 
july 2017 by charlesarthur
The EU is wrong, but Google is still in trouble • Distilled
Will Critchlow with a thoughtful analysis of the first antitrust ruling:
<p>I hesitate to say that this would be my recommended course of action if I were advising Google, but a direction I would love to see them take is as follows:

• Leave PLAs [product listing adverts, which you see above other search results if you type a search term that could be purchasable] as they are - if comparison shopping is a separate market to “general search” in which Google has a monopoly, then PLAs definitely fall in the general search part rather than the comparison shopping part. They are integrated into the results a searcher receives when they perform a search that starts at the Google homepage, and there is no comparison functionality - it simply links to products

• Remove the shopping link in the top menu - this is the one area I can see that they have favoured their comparison shopping engine (Google Shopping) over others (e.g. ciao.co.uk - one of the complainants) who cannot get their homepage linked from the top menu

• Open up Google Shopping pages to their own search index - i.e. enable pages like the result you find when you search [Puma shoes] on the Google Shopping tab to be indexed and appear in the regular organic search results (to be clear, this does not happen at the moment - Google keeps these pages explicitly out of the main search index). Doing this will increase competition in the general search results for the complainants, but it clarifies that Google is treating their comparison shopping engine (Google Shopping) exactly on a level playing field with competitors such as ciao.co.uk and paves the way for them to treat (all) comparison shopping engines as harshly as they like in regular search.</p>


His view is that losing this case makes it worse for Google's next two. I think he could be right.
google  eu  antitrust 
june 2017 by charlesarthur
Google faces years of EU oversight on top of record antitrust fine • Reuters
Foo Yun Chee and Eric Auchard:
<p>The real sting is not from the fine for anti-competitive practices in shopping search but the way the EU has thrown the issue back to Google to solve, meaning the company won't be able to comply through an easy set of technical steps.

In effect, the Commission is forcing Google to demonstrate that rivals have made substantial inroads into its businesses before there is much chance of it being let off the regulatory hook.

EU competition chief Margrethe Vestager promised Google was in for years of monitoring to guard against further abuses.

"Just being put on notice can limit Google's strategic options into the future," said Matti Littunen, a digital media and online advertising analyst with Enders Analysis in London.

The EU's 2004 ruling that Microsoft Corp had abused its dominant market position in Windows and other markets is now seen as having curtailed the software giants moves over the subsequent decade to expand more quickly into emerging markets such as online advertising, opening the way for Google's rise.

Putting the onus on the company underlines regulators' limited knowledge of modern technologies and their complexity, said Fordham Law School Professor Mark Patterson.

"The decision shows the difficulty of regulating algorithm-based internet firms," he said. "Antitrust remedies usually direct firms that have violated antitrust laws to stop certain behaviour or, less often, to implement particular fixes.

"This decision just tells Google to apply 'equal treatment,' not how to do that".</p>
google  antitrust  europe 
june 2017 by charlesarthur
Google, Facebook are super monopolies: Roger McNamee • CNBC
Chantel McGee:
<p>Google shareholders won't be fazed by the EU's $2.7bn fine against the company for competition abuses related to its shopping business, Elevation Partners co-founder Roger McNamee told CNBC on Tuesday.

"As a shareholder of Google you're looking at this and saying: 'We won again,'" McNamee said.

The venture capitalist spoke hours after EU regulators fined Google a record 2.4 billion euros ($2.7 billion), ruling that the search-engine giant violated antitrust rules for its online shopping practices.

Google said it will consider appealing the decision to the highest court in Europe.

"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley."

The fine is not large enough to change Google's behavior, he added. "The only thing that will change it is regulations that actually say you can or can't do something."</p>
google  antitrust 
june 2017 by charlesarthur
The EU's got it all wrong on Google • Adam Smith Institute
Sam Bowman:
<p>bundling or integrating price comparison tools might be good for users who are less tech-savvy and would normally go for a 'trusted' but more expensive retailer. If you don't realise that SkyScanner exists and would normally just go with BA every time, it could be very useful to get Google Flights right up top, showing that Ryanair does what you're looking for much more cheaply.

So it’s not even clear that prioritising Google Shopping results is bad for consumers – it may lead them to be more price-conscious and to shop around between merchants more. Even if it is – because it’s worse than some alternative price comparison site, for example – there is still no case for punishing Google for giving it special prominence. If Google Shopping is worse for consumers then it must be acting as a revenue raiser for Google, and a de facto way of charging for use of Google search (and other free Google products). 

If people can switch between platforms it doesn’t matter that much if, within a platform, there isn’t that much competition. Prioritising a particular shopping search engine is not akin to gouging water users with higher prices because there are alternatives to Google that users can switch to easily. If the overall user experience is made worse by Google Shopping being prioritised, then users will have the option of moving to a search engine like Bing which is perhaps less good as at search but better overall because it does not prioritise a bad shopping tool. Indeed Bing has specifically targeted Google Shopping, which they say is worse than their own tool, to get users to switch. And there is an incentive created for entrepreneurs and large existing rivals of Google like Facebook to create their own, rival platform…

…But the core issue here is whether we need to force competition within software platforms if competition exists between them. Just as Windows users moved to other operating systems (both on mobile with Android and iOS and desktop with Linux and Apple’s OS X), Google users have plenty of alternatives they can switch to if they think that Google’s bundling worsens the platform’s quality enough. </p>


I disagree with this analysis. Comparing the desktop with mobile misrepresents the role search plays; what Google did in Shopping is like Microsoft not only pre-installing Internet Explorer but making it increasingly hard to run alternative browsers even after you'd downloaded and installed them.

The ASI view is much closer to the US view on antitrust: if you can't point right now to a user who has been inconvenienced, then nothing bad has been done. This seems to me a short-term view of competition (which you'd think an organisation using that name would favour).
google  antitrust 
june 2017 by charlesarthur
EU fines Google €2.4bn ($2.7bn) over favoring Google Shopping in search results • Tech Narratives
Jan Dawson (who points out that he started out as an analyst covering EU regulation):
<p>In its decision, the EU explicitly says that this case sets a precedent, which certainly suggests it’s likely to find and act similarly in the other two cases [against Google, alleging abuse of dominance over mandated apps in Android, and insistence on Google Play for "approved" apps]. Secondly, the fine is substantial, but ultimately not the biggest punishment for Google here. Rather, the most significant outcome is restrictions on promoting other Google services in search, which applies for today onto to Shopping but by implication would also affect other linked products that get prominent promotion in search results, whether Maps, News, or potentially other categories too. Put that together with the precedent point, and we’re very likely to see similar restrictions on bundling and promoting other services in Android and possibly other areas too.

Thirdly, the decision is notable for a very European approach to defining markets, which I mentioned in one of those earlier pieces on Android: the EU tends to define markets in ways normal people probably wouldn’t, because that allows it to make findings that otherwise couldn’t be made. In this case, it’s defining Google Shopping as a comparison shopping service rather than just a more useful way to present shopping-related search results and/or ads, which is how Google sees them. Once you define Google Shopping in that way, then of course Google is unfairly promoting Google Shopping over other comparison shopping services – can you even name any others?

Google’s own algorithm, which benefits only from being as good as possible, rarely ranks any others above the fourth page of organic search results, suggesting their limited relevance. But as long as the EU is determined to take that approach, I see very little Google can do to fight against this decision, because it’s based on a market definition the EU gets to decide on, and which Google is essentially powerless to change. Overall, this feels like something of a watershed moment in Google’s relationship with the EU – I think any appeal is very unlikely to succeed, and at most will push back the implementation of the decision and the forced unbending of Shopping from search.</p>


Also: <a href="http://europa.eu/rapid/press-release_IP-17-1784_en.htm">EC announcement</a>; <a href="https://www.blog.google/topics/google-europe/european-commission-decision-shopping-google-story/">Google response</a>.
google  ec  antitrust  decision  shopping 
june 2017 by charlesarthur
Google faces big fine in first EU case against search practices • FT
Rochelle Toplensky:
<p>Google is braced for a fine of potentially more than €1bn from Brussels for abusing its market dominance in search, a sanction that would have far-reaching implications for how the company operates online.

The EU move, expected in the coming weeks, will accuse the company of using its near-monopoly in online search to unfairly steer customers to its own Google Shopping service.

The bill could top the record abuse penalty of €1bn handed out to chipmaker Intel in 2009, according to two people familiar with the case. The European Commission and Google declined to comment.

The decision in the Google Shopping case would be just the first of three competition claims against the company being investigated by EU authorities.

It would mark the first sanction by a leading competition regulator on the way Google operates.</p>


The investigation was announced in November 2010; but the problem had been written about since at least August 2009, <a href="https://www.theguardian.com/business/2009/aug/17/google-search-baffles-internet-firm">as Richard Wray explained</a>:
<p>A British husband and wife team have been waging a three-year battle to get their price comparison website recognised by Google in a saga that sheds new light on the power of the world's largest search engine

Foundem.co.uk directs shoppers to online deals for goods such as TVs or flights, but has struggled since one day it suddenly disappeared from Google search results for these categories.

There is no evidence that Google is in any way being dishonest or unfair in the way that it ranks such websites, but Foundem's fight to discover what happened has highlighted the ever-growing influence of its mysterious search algorithms.

Many consumers believe Google's search engine works on a formula that was created by founders Sergey Brin and Larry Page and that was that: they set it running and the rest is history. In fact, as those in the internet industry know, Google carries out regular "tweaks" of its algorithm. About 450 a year in fact. When they are made, the sheer scale of Google – it has an estimated 90% market share in Britain – means these can have huge and often unintended consequences.</p>


Despite everything Google will say, it's not as if the EC has hurried into this. Some of the fine ought to go to Foundem, really; it was the first complainant which triggered the whole investigation.
google  antitrust  fine  search 
june 2017 by charlesarthur
Kaspersky files antitrust complaints against Microsoft in Europe • The Seattle Times
Matt Day:
<p>Eugene Kaspersky, co-founder of the Russian cybersecurity firm, said Tuesday that the company had recently filed antitrust complaints with the European Commission and Germany’s Federal Cartel Office. Kaspersky had raised the issue with Russia’s antitrust regulator in November.

“We see clearly – and are ready to prove – that Microsoft uses its dominant position in the computer operating system market to fiercely promote its own – inferior – security software,” Kaspersky said.

In many cases, Kaspersky says, customers who update their operating system to Windows 10 from older versions find that their Kaspersky antivirus tools have been deleted or disabled. The company also criticized Microsoft for making it impossible to remove Windows Defender, Microsoft’s own antivirus software, in some editions of Windows.

In a statement, Microsoft said its aim was to protect Windows users, and “we are confident that the security features of Windows 10 comply with competition laws.”

Microsoft said it had reached out to Kaspersky months ago to arrange a meeting between executives to address the concerns, but that gathering has not taken place.

Following Kaspersky’s complaint in Russia, regulators there held hearings on Microsoft’s antivirus policies in Windows 10. They haven’t reached a conclusion.</p>


Conventional antitrust theory - does the customer lose out by the annexation of the AV (antivirus) market by Microsoft through its control of the OS? - would suggest there is, at least, a case to answer. The key difference from, say, the browser/OS example is that Microsoft isn't threatening OEMs, since they don't have an option about including Defender (and many do offer other AV software, which the AV vendors are charged for).

At the same time, the price of AV software to the consumer has already effectively fallen to zero. There's no consumer surplus to go round; only consumer disbenefit.
antitrust  kaspersky  microsoft  antivirus 
june 2017 by charlesarthur
Digital privacy is making antitrust exciting again • WIRED
Nitasha Tiku:
<p>Relying on consumer prices to judge the openness of a market can also be misleading when regulating tech companies. “When more and more services are ‘free,’ you can see how that really renders antitrust feeble,” says Khan. After the rapid expansion in social networking and online search, it’s clear that financial power lies in data, not just price. “The Europeans hit on this,” says Stucke. “Data is the new lingua franca. That is the currency, and [tech platforms] can translate that data into dollars.”

This is evident in the European Union’s intensified scrutiny of how Silicon Valley tech platforms operate. Germany’s antitrust agency is investigating Facebook. The EU conducted an antitrust probe into Amazon’s e-books business deals (the company agreed to change its contract with publishers in May). Days before the Oxford conference, the EU fined Facebook $122m for making misleading privacy statements to the EU when it acquired WhatsApp for $19bn in 2014 about the ability to match Facebook and WhatsApp accounts. (The merger of the popular texting apps raised concerns that Facebook’s online advertising business could gain an unfair advantage.) Days before that, watchdogs in the Netherlands and France slapped Facebook on the wrist for privacy violations.</p>


There's a growing feeling that current US antitrust law isn't able to cope with the emerging problems created by the big companies, particularly Facebook and Google.
facebook  google  privacy  antitrust 
june 2017 by charlesarthur
Google will help publishers prepare for a Chrome ad blocker coming next year • WSJ
Jack Marshall:
<p>Google has told publishers it will give them at least six months to prepare for a new ad-blocking tool the company is planning to introduce in its Chrome web browser next year, according to people familiar with the company’s plans.

The new setting, which is expected to be switched on by default within the desktop and mobile versions of Chrome, will prevent all ads from appearing on websites that are deemed to provide a bad advertising experience for users.

To help publishers prepare, Google will provide a self-service tool called “Ad Experience Reports,” which will alert them to offending ads on their sites and explain how to fix the issues. The tool will be provided before the Chrome ad blocker goes live, the people familiar with the plans say…

…Unacceptable ad types include those identified by the Coalition for Better Ads, an industry group made up of various trade bodies and online advertising-related companies that says it aims to improve consumers’ experience with online advertising.

The group’s initial list of unacceptable ad types, released in March, included pop-ups, auto-playing video ads with sound and “prestitial” ads that count down before displaying content. Google is a member of the group, alongside fellow ad giant Facebook , and Wall Street Journal parent News Corp .</p>


This is antitrust territory. Dominant search engine; dominant browser; a dominant advertising supplier. What's the harm to the consumer? The lack of choice in what they see, and the inability to decide what ads they do and don't see. I hope Margrethe Vestager is on this preemptively; I'm sure publishers in Europe will be at her door.
google  adblocking  antitrust 
june 2017 by charlesarthur
EU to conclude Google antitrust cases in next few months • Reuters
Foo Yun Chee:
<p>EU antitrust regulators will rule in the "next few months" whether Alphabet's Google abused its dominance of internet searches and other areas, a senior European Commission official said on Monday, an outcome that could lead to a hefty fine.

The world's most popular internet search engine has been in the Commission's crosshairs since 2010 over the promotion of its own shopping service in internet searches at the expense of the services of rivals.

The EU competition enforcer opened a second front against Google last year as it charged the company with using its dominant Android mobile operating system to squeeze out rivals.

It has since leveled a third charge, that of blocking rivals in online search advertising. This relates to Google's "AdSense for Search" platform, in which Google acts as an intermediary for websites such as online retailers, telecoms operators or newspapers. These searches produce results that include search ads.

"In the next few months, we will reach a decision on the Google cases, Google search, AdSense and to me the most interesting is Android," Tommaso Valletti, the Commission's chief competition economist, told a conference organized by the University of Oxford Centre for Competition Law and Policy.</p>


But it already knows that Google has abused this; that's why it has sought remedies, which have been rejected by complainants. I've no idea now what Margrethe Vestager is waiting for.
google  antitrust 
may 2017 by charlesarthur
“Google is as close to a natural monopoly as the Bell system was in 1956" • Chicago University Booth School of Business
Asher Schechter talks to Jonathan Taplin, who has written a book arguing that Facebook, Google and Amazon are rent-seeking monopolies (a monopsony in Amazon's case) which have also achieved regulatory capture:
<p>Q: At the Stigler Center conference on concentration, you called Google “the closest thing to a natural monopoly I’ve seen in my lifetime.” Can you elaborate?
 
I would say Google is as close to a natural monopoly as the Bell System was in 1956. If you came to me and said “Hey, I want to start a company to compete with Google in search,” I would say you’re out of your mind and don’t waste your energy or your time or your money, there’s just no way. Classic economics would say that if there’s a business in which there are 35 percent net margins, that would attract a huge amount of new capital to capture some of that, and none of that has happened. That tells you there’s something wrong.
 
The way the Bell System had to give up all its patents in return for being named a natural monopoly, that to me is a potential solution.
 
Q: As you point out yourself in the book, natural monopoly can also be a positive thing. For instance, in the cases of the telephone and the telegraph. What is the difference between those natural monopolies and digital platforms?
 
That was kind of a tragedy of the commons, with competing inoperable telephone networks. It didn’t make sense. Now we’re just in a situation where the amount of capital that would be needed to start a new Google competitor would be so huge or so onerous in terms of competition that it would be very hard to raise that capital. So we’re just dealing with the fact that it’s a de-facto monopoly. Even Microsoft couldn’t get past a 5 percent global market share.</p>


Microsoft started years and hundreds of millions of dollars behind, though. (See my book.) He's right that a business with 35% net margins ought to attract competition - and search did, back in the 2000s. But Google lapped and re-lapped them. Its competitive moat now is the combination of brand recognition, product placement and enormous hardware and software investment.

Regulating search itself doesn't make sense. What does - and the EU is proposing - is regulating Google's attempts to annexe every adjacent market, from shopping to news to scraping sites for "snippets" of data.
google  amazon  facebook  antitrust 
may 2017 by charlesarthur
Google to open up Android to rivals in out-of-court deal with Russia • Reuters
<p>Alphabet Inc's Google will open up its popular Android mobile operating system to rival search engines in Russia as part of a deal to settle a two-year dispute with Russian competition authorities.

The deal sets a new precedent for the tech giant, which faces multiple complaints worldwide that it is abusing its dominant position by imposing restrictions on manufacturers of Android-based devices in order to protect its share of the online search market.

Russia's competition watchdog, FAS, ruled in 2015 that Google was breaking the law by requiring the pre-installation of applications, including its own search tool, on mobile devices using Android, following a complaint by Russia's Yandex.

Google will no longer demand exclusivity of its applications on Android-based devices in Russia and will not restrict the pre-installation of rival search engines and other applications, as part of a deal with FAS, the regulator said on Monday.

It will also develop a tool allowing users to choose a default search engine on their Android devices.</p>


Fines of $7.8m - not much for Google. Applies for the next six years. How's the EC's case against Google, filed in October 2010, coming along?
google  antitrust  russia 
april 2017 by charlesarthur
Apple sues Qualcomm • Business Insider
<p>Apple is accusing Qualcomm of withholding $1 billion in rebates under a deal they had struck to keep Qualcomm modems in Apple products, including the iPhone and iPad.

Qualcomm held the rebates after Apple worked with Korean antitrust regulators looking into Qualcomm's licensing businesses, Apple said.

Earlier this week, the FTC accused Qualcomm of monopolistic practices directly related to its intellectual property licensing business and cited its relationship with Apple.

"Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program," Qualcomm general counsel Don Rosenberg said in a statement. 

Apple said that Qualcomm charges Apple "at least five times more in" royalty payments than all of Apple's other patent licensors combined in a statement provided to Business Insider.</p>


I haven't read Apple's complaint in detail, but BI does have a link to a Scribd version of it. The odd thing is, if Qualcomm was really overcharging, why didn't Apple take it to court? It did with Motorola over similar FRAND complaints. (One difference: Qualcomm paid Apple to make it a monopoly supplier - hence the $1bn at dispute.)
apple  qualcomm  antitrust 
january 2017 by charlesarthur
Qualcomm charged with monopolizing key semiconductor device used in cell phones • Federal Trade Commission
<p>The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:

• Maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms. The FTC alleges that this tactic forces cell phone manufacturers to pay elevated royalties to Qualcomm on products that use a competitor’s baseband processors. According to the Commission’s complaint, this is an anticompetitive tax on the use of rivals’ processors. “No license, no chips” is a condition that other suppliers of semiconductor devices do not impose. The risk of losing access to Qualcomm baseband processors is too great for a cell phone manufacturer to bear because it would preclude the manufacturer from selling phones for use on important cellular networks.
 
• Refuses to license standard-essential patents to competitors. Despite its commitment to license standard-essential patents on FRAND terms, Qualcomm has consistently refused to license those patents to competing suppliers of baseband processors.
 
• Extracted exclusivity from Apple in exchange for reduced patent royalties. Qualcomm precluded Apple from sourcing baseband processors from Qualcomm’s competitors from 2011 to 2016. Qualcomm recognized that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors.

The FTC is seeking a court order to undo and prevent Qualcomm’s unfair methods of competition in violation of the FTC Act. The FTC has asked the court to order Qualcomm to cease its anticompetitive conduct and take actions to restore competitive conditions.</p>


The payments to Apple constituted billions of dollars, the FTC says; but if Apple used any other baseband in any device, all payments would cease. Perhaps the FTC investigation is what let Intel get a foot in the door in some models of the iPhone 7.
qualcomm  iphone  apple  antitrust 
january 2017 by charlesarthur
US appeals court revives antitrust lawsuit against Apple • Reuters
Stephen Nellis and Dan Levine:
<p>iPhone app purchasers may sue Apple Inc over allegations that the company monopolized the market for iPhone apps by not allowing users to purchase them outside the App Store, leading to higher prices, a U.S. appeals court ruled on Thursday.

The 9th U.S. Circuit Court of Appeals ruling revives a long-simmering legal challenge originally filed in 2012 taking aim at Apple’s practice of only allowing iPhones to run apps purchased from its own App Store. A group of iPhone users sued saying the Cupertino, California, company's practice was anticompetitive.

Apple had argued that users did not have standing to sue it because they purchased apps from developers, with Apple simply renting out space to those developers. Developers pay a cut of their revenues to Apple in exchange for the right to sell in the App Store.

A lower court sided with Apple, but Judge William A. Fletcher ruled that iPhone users purchase apps directly from Apple, which gives iPhone users the right to bring a legal challenge against Apple.</p>


That could get interesting.
apple  antitrust  app 
january 2017 by charlesarthur
Google vs. the EU explains the digital economy • Harvard Business Review
Bala Iyer and Srinivasa Rangan, of Babson College in Massachusetts:
<p>Google’s argument [in its antitrust cases against the EU] relies heavily on the prevailing American perspective of competition policy. In the United States, legal precedents, as well as enforcement efforts, approach competition policy with consumer welfare as its lodestar. This approach argues that promoting efficiency with which firms operate leads to enhanced consumer welfare since improved efficiency leads to lower costs which in turn leads to lower prices. In that context, preserving competition in the marketplace is only a means to an end. As <a href="https://www.justice.gov/atr/speech/united-states-and-european-competition-policy-are-there-more-differences-we-care-admit">one observer puts it</a>, “efficiencies are the goal; competition is the process.” By this logic, Google’s approach to the mobile stack is efficiency enhancing whereby consumers benefit.

Unfortunately for Google, the EU antitrust enforcers have a slightly different perspective. They, too, start off with consumer welfare as the long-run goal, but they insist that moves by rivals that could be efficiency enhancing in the short run could be detrimental in the long run, especially if those moves could thwart technological innovation and competition. In other words, EU authorities put more stress on what one might call dynamic efficiency in markets.

The differing US and EU antitrust perspectives can lead to different outcomes when confronted with the same set of facts. For example, in the case of the proposed merger between GE and Honeywell, US antitrust authorities gave it a go-ahead based on projected cost efficiencies whereas the EU authorities denied it since it has the potential to lower competition in the long run…

…Based on Microsoft’s experience with European Union in the context of its browser and more recent decisions that the European Union has made with respect to other firms in the context of mergers and acquisitions, it is unlikely that Google will prevail in the EU case if its persists with its present arguments. Google, however, could argue that one of the EU assumptions about competition is flawed.</p>


It could try, but it's unlikely to get far. It would be a bit like saying at your murder trial "but look at all the people I <em>haven't</em> killed!"
google  antitrust 
december 2016 by charlesarthur
Improving quality isn’t anti-competitive, part II • Google Public Policy blog
Kent Walker, Google's general counsel:
<p>we disagree with the European Commission’s argument that our improved Google Shopping results are harming competition. As we said last year in <a href="https://europe.googleblog.com/2015/08/improving-quality-isnt-anti-competitive.html">our response</a> to the Commission’s original Statement of Objections (SO), we believe these claims are wrong as a matter of fact, law, and economics.

The Commission’s original SO drew such a narrow definition around online shopping services that it even excluded services like Amazon. It claimed that when we offered improved shopping ads to our users and advertisers, we were “favouring” our own services — and that this was bad for a handful of price comparison aggregators who claimed to have lost clicks from Google. But it failed to take into account the competitive significance of companies like Amazon and the broader dynamics of online shopping.

Our response demonstrated that online shopping is robustly competitive, with lots of evidence supporting the common-sense conclusion that Google and many other websites are chasing Amazon, by far the largest player on the field.</p>


This is getting really very boring now. Foundem, the British company that was the original complainant to the EC, demolished Google's response in <a href="http://www.foundem.co.uk/fmedia/Foundem_Jun_2015_Analysis/html5.html">its rebuttal analysis in June 2015</a>. It's very clear. Nothing has changed since then except that Google has grabbed more of the online advertising business. (Just to start you off: Google talks about "shopping" but the EC's Statement of Objections is about "price comparison". Because misdirection works.)

Could the EC just get on and determine its response now? This really has dragged on long enough.
google  ec  antitrust 
november 2016 by charlesarthur
Google prepares to reject EU monopoly charges • Telegraph
James Titcomb:
<p>While a response is expected in mid-to-late October, it could be delayed further as Google puts the finishing touches to its answers. The company may still offer concessions in a last-ditch attempt to seek a deal with the Commission that would lead to a reduced fine, but after several failed attempts in the past, the prospect of a truce appears unlikely.

Both sides are now believed to be prepared for a long-running battle, and any EU fine may be appealed at the European Court of Justice, a process that could take years and extend beyond Ms Vestager’s 2019 term.

The Commission’s combative stance has irritated the US government, which cleared Google of any search bias after its own investigation in 2013. Barack Obama has accused the EU of attempting to protect its own companies by reining in Silicon Valley giants.

When it responds, Google is likely to argue that it needs to place restrictions on Android to ensure the consistency of the software and that many price comparison services have benefited, not suffered, from the search engine.</p>


Prepare for the PR war.
google  antitrust 
october 2016 by charlesarthur
Exclusive: Japan's antitrust watchdog considers action against Apple, carriers - sources • Reuters
Yoshiyasu Shida:
<p>n a report published last month, Japan's Fair Trade Commission (FTC) said that NTT Docomo, KDDI Corp and Softbank Group were refusing to sell older surplus iPhone models to third party retailers, thereby hobbling smaller competitors.

Apple was not named in that report, but two senior government sources told Reuters that regulators were also focusing on Apple's supply agreements with all three carriers.

Under those deals, surplus stock of older iPhones is kept out of the market and sent to overseas markets, such as Hong Kong, according to industry sources.

The carriers, locked in a costly battle to win consumers who covet iPhones, also bulk purchase the Apple smartphones and sell them at a discount, which gives the U.S. company an advantage over rivals such as Samsung Electronics Co, according to the two government officials and an industry source.

Both iPhone 7 and Samsung's Galaxy S7 edge model sell for 93,960 yen ($932) under Docomo's main service package without any contract, but the cost for the iPhone drops sharply to 38,232 yen with a two-year contract, while the Galaxy falls to 54,432 yen.</p>


There have been similar rumblings about Apple and carriers in Europe, though so far it has come to nothing.
apple  japan  antitrust 
september 2016 by charlesarthur
Google given more time to reply to EU antitrust charge on Android • Reuters
Foo Yun Chee:
<p>Alphabet's Google has been given two more weeks to counter EU antitrust charges that it uses its dominant Android mobile operating system to block competitors, the European Commission said on Thursday.

The EU competition enforcer in April accused the U.S. technology giant of harming consumers because of its demand that mobile phone makers pre-install Google Search and the Google Chrome browser on their smartphones to access other Google apps.

Google was initially given until July 27 to respond to the charges but asked for an extension to Sept. 7.

"On Android, the last deadline set by the Commission for Google's reply, after an extension request by Google, is Sept. 20," a European Commission spokesman said in an email.</p>


Fine. And what's happening with the search antitrust charges? The EC is making glaciers look like headlong madcap sprinters. Everything seems to have been decided; so what are we waiting for, exactly?
google  antitrust 
september 2016 by charlesarthur
South Korea confirms Google antitrust probe • FT.com
Song Jung-a:
<p>South Korea’s antitrust watchdog says it is looking at whether Google has violated the country’s anti-competition laws, officially confirming its scrutiny of the global internet search group for the first time.

The Korea Fair Trade Commission did not elaborate on the scope of the investigation.

Local media have reported that the regulator is probing the company’s advertising policy, after Korean advertising agents filed a complaint with the KFTC in 2014 that Google had not paid them commissions for online advertising since 2012.

Friday’s statement from the KFTC came on the same day the Seoul Economic Daily newspaper reported that the regulator was poised to clear Google of charges that it abused its dominant market position with its advertising policy.

Separate media reports have suggested Google is under scrutiny over alleged abuse of its Android smartphone operating system’s dominance.</p>


This is quite strange when compared with the report from Business Korea, which says:
<p>The Fair Trade Commission (FTC) of South Korea came to a conclusion that Google Korea’s preloaded apps and subsidies for search ads do not constitute any abuse of market dominance. This is because Naver enjoyed a market share of more than 70%, Daum Kakao enjoyed a market share of 15% to 19% and that of Google was merely 2% to 8% during the period of 2008 to March this year, when Google was involved in preloading of apps in the South Korean market.</p>


They're slightly different, but Business Korea seems to be saying things are fine, where the FT is saying things aren't.
google  korea  antitrust 
august 2016 by charlesarthur
Different conclusion from EU: Korea FTC acquits Google of app preloading in South Korea • BusinessKorea
Cho Jin-young:
<p>The Fair Trade Commission (FTC) of South Korea came to a conclusion that Google Korea’s preloaded apps and subsidies for search ads do not constitute any abuse of market dominance. This is because Naver enjoyed a market share of more than 70%, Daum Kakao enjoyed a market share of 15% to 19% and that of Google was merely 2% to 8% during the period of 2008 to March this year, when Google was involved in preloading of apps in the South Korean market.

The FTC also made a decision contrary to that of the EU with regard to Google’s search ad subsidies provided for mobile carriers. According to the FTC, the amount of the subsidies was very small in correlation with the company’s market share and, as such, the subsidies did not restrict competition in the market. The commission is planning to keep monitoring the possibility of Google Korea’s market dominance abuse, but restrictions are rather unlikely with its preloaded apps acquitted.</p>


You'd hardly call 8% "dominance", after all.
korea  google  antitrust 
august 2016 by charlesarthur
The European making sure America’s tech giants play by the rules • Bloomberg
Adam Satariano and Aoife White interview Margrethe Vestager:
<p><strong>What if the competitors’ products just aren’t as good? People don’t seem to have a problem with Google’s quality.</strong>

<strong>MV:</strong> That’s not the question. You don’t know if someone can come up with something better. Just because something is good doesn’t mean it’s the end of innovation. If it was, well then, we’d still be in horse carriages.
 
<strong>But isn’t there a choice? You’re investigating Google because people need to sign up for its services when they use Android. Can’t somebody download another search or e-mail app for their phone?</strong>

<strong>MV:</strong> If everything is presented to you, then your impetus to look for something new is so much smaller. Android is a very good operating system—open source. But how Android is used seems to place customers in a lot of instances on a one-way Google Street. That’s because you want an out-of-the-box experience, and even before you start thinking there is something else, you’re in a 100 percent Google experience.</p>


She says as a result of her work investigating this, "I’ve become slightly more obsessed with data security and much more reluctant to give away my data."
vestager  google  antitrust  europe 
august 2016 by charlesarthur
Making markets work for citizens • Huffington Post
Margrethe Vestager, who is the European Commission's competition commissioner:
<p>Do you remember what it was like to search the Internet before Google invented their search machine? I myself have a vague memory of it being very difficult. Today it is easy. But these fabulous innovations don’t give the company the right to stop others from competing. Because consumers need competition and innovation, so they can choose the product that’s best for them. And the economy needs competition, to drive companies to invest.

That’s why we’re concerned that Google seems to have favoured its own comparison shopping service in its search results. It means consumers see the results that Google wants them to see, which might not be the most relevant ones. And if Google’s rivals believe that their services will never be as visible as Google’s, no matter how good they are, that could discourage them from investing and invent new services all together.

We want to ensure that consumers have a choice, and to make sure Internet businesses keep investing in better products. Markets need to stay competitive because in a competitive market companies will invest. And have a fair chance to make it in the market.</p>


Wait - "seems to have favoured"? Surely the point of the EC's complaint is that Google <em>has</em> favoured its own services. Vestager has had ages; what's the holdup to taking action, exactly, if this risk to rivals exists?
google  ec  antitrust 
july 2016 by charlesarthur
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