WebProNews

Tag: Antitrust

  • EU Regulators Investigating Google’s Data Practices

    EU Regulators Investigating Google’s Data Practices

    Reuters is reporting that European Union (EU) antitrust regulators are asking to look at documents detailing Google’s data collection practices.

    The EU has already levied hefty fines against Google in past cases, amounting to $8.8 billion in the last two years. The judgements were the result of investigations proving Google had violated antitrust rules by using its dominance unfairly. If the current set of questions are any indication, Google may be facing yet more punishment.

    According to Reuters, the regulators sent questionnaires to a number of different companies. The companies were given a month to reply and provide information on Google’s data collection policies. Regulators were interested specifically in online advertising, local search, web browsers, online ad targeting, login services and more.

    “Companies were asked about agreements providing data to Google or allowing it to collect data via their services in recent years, and whether they were compensated for this.

    “Regulators also wanted to know the kind of data sought by Google, how it uses it and how valuable the companies consider such data. Another question asked whether Google and the companies were subjected to contractual terms that prohibit or limit the use of the data.

    “Regulators also wanted to know if Google had refused to provide data and how this affected the companies.”

    Whether anything will come of this new inquiry remains to be seen. Given the current climate, however, Google would do well to try to allay any concerns the EU has.

  • Intel Supports FTC in Qualcomm Antitrust Appeal

    Intel Supports FTC in Qualcomm Antitrust Appeal

    Intel filed a brief supporting the Federal Trade Commission and in opposition to Qualcomm’s appeal of a judgement finding it violated antitrust laws.

    In a blog post on the company’s site, Intel’s general counsel Steven Rodgers outlined the Intel’s position:

    “Qualcomm would have you believe that its position in the market today — as the last surviving U.S. supplier of premium modem chips — is due to its ‘ingenuity and business acumen,’ and that its rivals in the market failed simply because ‘they did not offer good enough chips at low enough prices.’ This is simply not true.

    “Instead, as detailed in the District Court’s opinion and in our brief, Qualcomm maintained its monopoly through a brazen scheme carefully crafted and implemented over many years. This scheme consists of a web of anticompetitive conduct designed to allow Qualcomm to coerce customers, tilt the competitive playing field and exclude competitors, all the while shielding itself from legal scrutiny and capturing billions in unlawful gains.”

    Mr. Rodgers then goes on to describe the amount of effort Intel put behind their efforts to break into the modem business.

    “We invested billions, hired thousands, acquired two companies and built innovative world-class products that eventually made their way into Apple’s industry-leading iPhones, including the most recently released iPhone 11. But when all was said and done, Intel could not overcome the artificial and insurmountable barriers to fair competition created by Qualcomm’s scheme and was forced to exit the market this year.”

    This is not the first time Qualcomm has been accused of antitrust behavior, having “been fined nearly $1 billion in China, $850 million in Korea, $1.2 billion by the European Commission and $773 million in Taiwan (later reduced in settlement).”

    Qualcomm’s practices have managed to make bitter enemies of the very companies it does business with, including Apple and Intel. Apple and Qualcomm were involved in multiple legal actions over a two-year period, with Apple repeatedly making the claim that Qualcomm was abusing its position in the industry. Although the two companies arrived at a settlement, Apple ultimately purchased Intel’s modem business, with experts believing they intend to use their own modems by 2022.

    With so much evidence against Qualcomm, not to mention such powerful companies standing against it, it seems unlikely the company will be able to get the judgement reversed.

  • Sandip Bhagat, CIO at Whittier Trust On Why This Is a Good Time For Tech Stocks

    Sandip Bhagat, CIO at Whittier Trust On Why This Is a Good Time For Tech Stocks

    “The scope of this regulatory oversight is changing. People used to focus on just consumer welfare and a price effect. That has now expanded to what harm you are doing to competitors and non-price effects. The scope is expanding, and some of these companies—this is Google, Amazon, Apple, Facebook—they have engaged in kind of favorable treatment of proprietary products.”

    Sandip Bhagat, CIO at Whittier Trust talks about why investors shouldn’t allow regulatory threats and investigations to scare them away from tech stocks, as well as his two top picks.

    When you talk about regulation, you have to talk at two levels: privacy first and then antitrust. Privacy may not be such an issue, and in a very perverse way, the large players here may actually come out winners because they have the scale to absorb the cost of meeting that regulatory compliance. They’re also multi-national in nature, even today, so the experience in Europe where the GDPR is already in place will stand them in good stead should it come to the U.S.

    Switching to the antitrust component of regulatory risk and one of the things that is being discussed is anti-competitive acquisitions, so I think they would come under attack. What happens in the worst case, there is a forced breakup. We put a very low likelihood for that outcome. But fines will come along the way. There will be rulings that say you give equal parity during search processes and displaying of third-party vendors and their products. All of those we think can be absorbed by these companies because of their free high cash flow margins.

    On Buying Tech Stocks Under Scrutiny

    Here are two really compelling reasons to think about technology stocks now and really for a secular future. One is macro in consideration, the other one is micro and fundamental.

    At the macro level, what is the environment? We have seen slower growth than normal after the global financial crisis and, as a result of that, interest rates are lower. Slow growth and low-interest rates help growth stocks. When growth is scarce, growth companies get rewarded with a higher multiple and low-interest rates help growth stocks because they have a higher equity duration and sensitivity to interest rates.

    On Microsoft’s Long-Term Value

    If there is one take away, it’s a stock to own for the long-term. It’s a great way to compound wealth. It’s indeed a vehicle for inter-generational wealth transfer. The company has rediscovered itself, moved away from a licensing model to a subscription model. Satya (CEO Satya Nadella) has reformed the company. While they’re making inroads in cloud computing, they are actually very unique in that they can play in the hybrid cloud solution space with a foot in on-premise software along with cloud-based application deployment.

    On Amazon’s Brand Loyalty

    It’s economic mode is based on scale, convenience and brand loyalty, which doesn’t get talked about much. People talk about the technology backbone of Amazon. But that brand loyalty, they’ve been able to convert that into greater user engagement and adoption and then monetized it with more and more transactions to gain a bigger share of the wallet.

    Sandip Bhagat, CIO at Whittier Trust On Why This Is a Good Time For Tech Stocks
  • Google Loses Antitrust Appeal

    Google Loses Antitrust Appeal

    Google has reportedly lost an appeal in an antitrust related to Android in Russia.

    The complaint was lodged last year by Yandex, and in September, Russian antitrust authority The Federal Anti-Monopoly Service ruled that Google mustn’t require device manufacturers using Android to pre-install Google services.

    Google appealed, and according to reports, the appeal was just rejected by the Moscow Arbitration court. Reuters reports:

    The company now has to amend its contracts with smartphone manufacturers in order to comply with the ruling, and pay a fine.

    TechCrunch shares this statement from Yandex:

    “After careful consideration of all the facts in the case against Google’s anticompetitive practices, the court has upheld FAS’s judgement. We are satisfied with the court’s decision to uphold FAS’s judgement in the case against Google.”

    Google isn’t really commenting so far.

    Image via Google

  • FairSearch Coalition Loses Microsoft Support

    FairSearch Coalition Loses Microsoft Support

    It’s been a while since we’ve heard much from the FairSearch coalition. In fact, they haven’t issued a news release since last April.

    FairSearch, if you’ll recall, is an organization made up of Google competitors who banded together to lobby against the search giant and persuade governing bodies that the company is anti-competitive.

    One of the big names attached to the coalition was Google’s chief competitor Microsoft, but it appears that this is no longer the case. Re/code is reporting that as of last month, Microsoft is no longer providing financial support to FairSearch. Mark Bergen shares statements from the company as well as the coalition:

    “We routinely evaluate our participation in industry organizations and decided not to continue our membership in FairSearch,” a Microsoft spokesman said.

    Thomas Vinje, a rep for FairSearch, said: “While we appreciate Microsoft’s contribution while a member, the work of our coalition continues unabated.”

    Microsoft had been part of the coalition since 2010, the year it was formed. Remaining members, according to its website, include: dmarketplace.com, Allegro, BusCapé, Expedia, Foundem, Nokia, Oracle, Trip Advisor, and Twenga.

    Image via FairSearch

  • FTC Reportedly Looking At Google’s Android Business

    Google is back in the eye of the Federal Trade Commission, this time for its Android business, which has also been drawing scrutiny from government regulators around the world.

    Regulators are investigating if Google is employing anticompetitive practices as its Android operating system dominates market share. Bloomberg Business reports:

    Google Inc. is back under U.S. antitrust scrutiny as officials ask whether the tech giant stifled competitors’ access to its Android mobile-operating system, said two people familiar with the matter.
     
    The Federal Trade Commission reached an agreement with the Justice Department to spearhead an investigation of Google’s Android business, the people said. FTC officials have met with technology company representatives who say Google gives priority to its own services on the Android platform, while restricting others, added the people, who asked for anonymity because the matter is confidential.

    Earlier this month, Russian antitrust authority The Federal Anti-Monopoly Service ruled that the company mustn’t require device manufacturers using Android to pre-install Google services.

    In April, the European Commission, which has been involved in a years-long investigation into Google’s search business, revealed that it had opened a new investigation into Android as well.

    “Since 2005, Google has led development of the Android mobile operating system,” the Commission said at the time. “Android is an open-source system, meaning that it can be freely used and developed by anyone. The majority of smartphone and tablet manufacturers use the Android operating system in combination with a range of Google’s proprietary applications and services. These manufacturers enter into agreements with Google to obtain the right to install Google’s applications on their Android devices. The Commission’s in-depth investigation will focus on whether Google has breached EU antitrust rules by hindering the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products.”

    “Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company,” said EU Commissioner in charge of competition policy Margrethe Vestager.

    Google settled an antitrust case from the FTC related to its search business in early 2013. Many felt the company got off light on that one. Frequent Google critic Consumer Watchdog said the settlement failed to end Google’s “most anticompetitive practice”.

    Image via Google

  • Russian Regulator Reportedly Deems Google In Violation Of Antitrust Law

    Google was dealt a blow by Russian antitrust authority The Federal Anti-Monopoly Service, which ruled that the company mustn’t require device manufacturers using Android to pre-install Google services.

    The news follows a recent announcement by the European Commission that it would launch an antitrust probe into Google’s Android business, separate from the ongoing antitrust matter related to search.

    Bloomberg, which first reported the news of the Federal Anti-Monopoly Service’s decision, shares comments from the regulator, Google, and Yandex, which stands to gain search marketshare from the decision:

    “It’s a violation that Google required equipment makers to pre-install its services, including search, to get the Google Play application store on their devices,” Vladimir Kudryavtsev, head of the IT department of the Federal Anti-Monopoly Service, said by phone on Monday. The regulator will issue detailed instructions on remedies to Google within 10 days, Kudryavtsev said.

    A Google representative said by e-mail that the company will study the watchdog’s decision once it receives full instructions…

    “We hope that the antitrust decision will help to restore competition in the market,” Yandex said in an e-mailed comment. “While the European Commission has already started a preliminary probe into similar practices, Russia is the first jurisdiction to recognize these practices as uncompetitive.”

    Android has become a huge part of the technology landscape in the years since Google bought it and started its foray into the smartphone world. It was likely always (at least in part) about spreading its core search business, and now it would seek the strategy is starting to catch up to the company to some extent.

    Image via Google

  • Is Google Right About Its ‘Value To Businesses’ Of All Sizes?

    Is Google Right About Its ‘Value To Businesses’ Of All Sizes?

    In April, after a five-year-long investigation, the European Commission announced it had sent a Statement of Objections to Google alleging it has abused its dominant position in the markets for general internet search services by favoring its own comparison shopping product in general search pages.

    Do you think Google should be penalized? Let us know in the comments.

    It said this infringes on EU antitrust rules because “it stifles competition and harms consumers”.

    “In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” said Margrethe Vestager, the EU Commissioner in charge of competition policy. “Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”

    So Google has been working on convincing the Commission, and has now responded with a blog post and a formal filing. hey also released this video:

    Essentially, Google isn’t backing away from this fight, even though it faces stiff fines.

    SVP & General Counsel Kent Walker says in the blog post that the allegations in the statement of objections are “incorrect,” and that Google increases choice for European consumers and “offers valuable opportunities for businesses of all sizes.” He writes:

    The SO says that Google’s displays of paid ads from merchants (and, previously, of specialized groups of organic search results) “diverted” traffic away from shopping services. But the SO doesn’t back up that claim, doesn’t counter the significant benefits to consumers and advertisers, and doesn’t provide a clear legal theory to connect its claims with its proposed remedy.
     
    Our response provides evidence and data to show why the SO’s concerns are unfounded. We use traffic analysis to rebut claims that our ad displays and specialized organic results harmed competition by preventing shopping aggregators from reaching consumers. Economic data spanning more than a decade, an array of documents, and statements from complainants all confirm that product search is robustly competitive. And we show why the SO is incorrect in failing to consider the impact of major shopping services like Amazon and eBay, who are the largest players in this space.
     
    The universe of shopping services has seen an enormous increase in traffic from Google, diverse new players, new investments, and expanding consumer choice. Google delivered more than 20 billion free clicks to aggregators over the last decade in the countries covered by the SO, with free traffic increasing by 227% (and total traffic increasing even more).
     
    Moreover, the ways people search for, compare, and buy products are rapidly evolving. Users on desktop and mobile devices often want to go straight to trusted merchants who have established an online presence. These kinds of developments reflect a dynamic and competitive industry, where companies are continuing to evolve their business models and online and offline markets are converging.

    He goes on to say things we’ve mostly heard before about Google’s commitment to quality and how it’s not anticompetitive. He maintains that if Google were to do what the SO seeks, it would harm quality (which would not be good for consumers).

    He concludes saying that the SO’s conclusions are “wrong as a matter of fact, law, and economics” and that the company looks forward to discussing its response and supporting evidence with the Commission further.

    If the Commission isn’t buying what Google’s selling (and there’s a good chance they’re not), it can and probably will impose massive fines on the company. Here’s what the EC says about fines:

    A firm that has engaged in anti-competitive behaviour and so infringed competition law may be subject to fines imposed by the Commission under Regulation 1/2003. The Commission’s fining policy is aimed at punishment and deterrence. The fines reflect the gravity and duration of the infringement. They are calculated under the framework of a set of Guidelines last revised in 2006.
     
    The starting point for the fine is the percentage of the company’s annual sales of the product concerned in the infringement (up to 30%). This is then multiplied by the number of years and months the infringement lasted. The fine can be increased (e.g. repeat offender) or decreased (e.g. limited involvement). The maximum level of fine is capped at 10% of the overall annual turnover of the company. See separate factsheet on fines.

    If fines are imposed, Google can still appeal.

    Is Google right about the value it creates for businesses and maintaining quality? Let us know what you think.

    Image via Google

  • Is Yelp’s CEO Right About Google And Interstitials?

    Is Yelp’s CEO Right About Google And Interstitials?

    Last month, Google shared findings of an internal study on interstitials, which it had previously implied could start negatively impacting people’s search rankings.

    Do you consider interstitials to be negative to the user experience? Are there ways in which they can make the user experience better? Share your thoughts in the comments.

    They looked at behavior related to their own use of interstitials, specifically with the Google+ mobile site, which utilized one encouraging users to install the app. 9% of visits to the interstitial page resulted in a “Get App” button being pressed. 69% of visits abandoned the page. They neither went to the app store nor continued to the mobile website. Presumably they were so annoyed they just didn’t feel like going any further.

    “While 9% sounds like a great CTR for any campaign, we were much more focused on the number of users who had abandoned our product due to the friction in their experience,” Google said. “With this data in hand, in July 2014, we decided to run an experiment and see how removing the interstitial would affect actual product usage. We added a Smart App Banner to continue promoting the native app in a less intrusive way, as recommended in the Avoid common mistake section of our Mobile SEO Guide. The results were surprising.”

    1-day active users on the mobile site increased by 17% and Google+ iOS native app installs were mostly unaffected (-2%). They didn’t report the Android numbers because most Android devices come with the app pre-installed.

    “Based on these results, we decided to permanently retire the interstitial,” Google said. “We believe that the increase in users on our product makes this a net positive change, and we are sharing this with the hope that you will reconsider the use of promotional interstitials. Let’s remove friction and make the mobile web more useful and usable!”

    When Google published its findings, Yelp CEO and frequent Google critic Jeremy Stoppelman blasted the company on Twitter:

    Now, he’s elaborating on this in a new blog post. This wouldn’t be much of a surprise if he were to do so on the Yelp blog, but interestingly his post comes in the form of a guest article on Search Engine Land, one of the most widely-read blogs in the search industry.

    He begins by talking about something Steve Jobs said five years ago (which would have been five iPhone generations ago) about how people prefer apps to mobile browsers. Stoppelman goes on:

    A point Jobs left unsaid — perhaps because it is so obvious — was that in order for consumers to enjoy the advantageous experience apps provide them, they need to know the app exists. In other words, those apps must be somehow discoverable.

    While many users find apps by browsing inside an app store, another critical way they discover new apps is through mobile search engines, like Google. In this way, mobile search indeed serves a critical function to users: offering a bridge from the less desirable world of mobile Web browsing to a new world inside apps.

    Note that a mobile Google search for Yelp brings up an install button for Yelp’s app at the very top of the page.

    yelp

    Stoppelman says that after people “cross the bridge” from mobile web to apps, they “likely don’t go back,” which he says Google sees as a threat to its core business of search and that apps eliminate the need for the middleman, which would be Google.

    He criticizes the Google study and says that what it really is is “Google foreshadowing a search ranking penalty designed to slow users’ natural migration away from Web search towards apps, a major consumer trend that Steve Jobs accurately predicted.”

    Google has actually been talking about interstitials as a negative signal since before this study came out. Google also introduced two very clear positive ranking signals this year in mobile-friendliness and app indexing. One encourages the use of apps and makes them easier for people to use. This way, if you come across a Yelp result in Google, you can go right to the content in that app. Google is also utilizing this app indexing for something called Google Now on Tap, which brings users app functionality while they’re already using other apps.

    As Google explained this earlier this year, “If you’re chatting with a friend about where to get dinner, Google can bring you quick info about the place your friend recommends. You’ll also see other apps on your phone, like OpenTable or Yelp, so you can easily make a reservation, read reviews or check out the menu.”

    Search Engine Land notes that some opinions in Stoppelman’s article may be those of the guest author.

    Readers, which again, are primarily industry folks, had a lot of criticisms for Stoppelman’s article in the comments. Some maintained that interstitials make for bad experiences. Others criticized his approach such as not backing up his stance with data of his own. One went so far as to slam Yelp’s interstitial specifically.

    What do you think? Does Stoppelman make a good point or is he off base on this one? Share your thoughts in the comments.

    Image via Jeremy Stoppelman (Twitter)

  • AT&T, DirecTV Merger Reportedly Nearing Approval

    AT&T, DirecTV Merger Reportedly Nearing Approval

    It appears to be smooth sailing for AT&T in its acquisition of DirecTV, as the merger has reportedly cleared one major hurdle and is about to clear the last.

    Reuters reports that the Department of Justice has already wrapped up its review of the deal. Bloomberg says that the DoJ imposed no conditions on the mega-merger.

    AT&T first agreed to acquire DirecTV for nearly $49 million last May.

    The DoJ’s job in merger reviews is to determine if the deals violate antitrust law – so it looks like AT&T and DirectTV are good on that front. Of course, the DoJ isn’t the only regulatory agency that the companies must assuage. They also have to worry about the Federal Communications Commission and its independent review of whether or not the deal serves the public interest.

    Reuters says that approval is coming very soon – as early as next week. It’s more likely that AT&T had to make concessions with the FCC.

    On June 29th, AT&T said it had had a talk with the FCC, wherein they discussed “the substantial, direct, and verifiable benefits that the AT&T/DIRECTV merger will deliver to tens of millions of consumers.”

    “We also discussed AT&T’s voluntary commitments, described in the record, which will provide the Commission with further assurance that the transaction will serve the public interest and deliver benefits to consumers.”

    Streaming video may play a part in said conditions. Netflix recently raised objections to the merger in its current form, saying that the deal “would result in a combined entity with increased incentive and ability to harm online video distributors and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses.”

    The merger would create the biggest pay-TV company in the country.

    It’s possible that AT&T will have to agree to some stipulations protecting online video companies.

    The AT&T/DirecTV deal won’t create the broadband-controlling monster that the Comcast/Time Warner Cable deal would’ve created. The FCC basically killed that deal, and Net Neutrality was a major concern.

  • Apple to Pay $450M in e-book Price Fixing Case

    In 2013, a US Federal judge ruled that Apple conspired with major publishers to raise prices on e-books following the launch of the iBookstore.

    Now, a US Circuit Court of Appeals has upheld the decision.

    In a 2-to-1 ruling, the court concluded that Apple did, in fact, orchestrate a conspiracy to raise ebook prices.

    “We conclude that the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise ebook prices, that the conspiracy unreasonably restrained trade in violation of §1 of the Sherman Act, and that the injunction is properly calibrated to protect the public from future anticompetitive harms. Accordingly, the judgment of the district court is affirmed,” said the court’s decision.

    As the Wall Street Journal points out, Apple’s decision to go to trial was a bold one.

    The 2-1 ruling Tuesday by the Second U.S. Circuit Court of Appeals in Manhattan follows three years of litigation, millions of dollars in legal fees and a bold decision by Apple to challenge the U.S. Department of Justice to a trial, even after all the publishers with which it was accused of colluding had settled their cases.

    Apple will pay $450 million – mostly to e-book customers.

    Apple’s original argument was that the lawsuit was flawed from the start.

    “Apple’s entry into e-book distribution is classic procompetitive conduct that created competition where none existed

    “For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market. The government’s complaint against Apple is fundamentally flawed as a matter of fact and law,” said Apple back in 2012.

  • Study Slams Google For ‘Reducing Social Welfare’ With ‘Lower Quality Results’

    Study Slams Google For ‘Reducing Social Welfare’ With ‘Lower Quality Results’

    Columbia Law School professor Tim Wu and Yelp collaborated on a study of Google’s search results, and have declared that Google is hurting the consumer experience of search results by favoring is own content which in some cases may be inferior to organic results that would otherwise be surfaced.

    The paper was presented at Oxford University’s Antitrust Enforcement Symposium, and comes as Google is in the process of preparing its response to antitrust action from the European Commission. Yelp, a vocal critic of Google from way back, is a complainant in that.

    The study makes use of search results as demonstrated by a tool Yelp launched last year called “Focus on the User – Local“. This is a browser plugin, which claims to demonstrate how Google manipulates its results for the worse by removing the biased element.

    The study surveyed nearly 2,700 people utilizing the results.

    “While Google is known primarily as a search engine, it has increasingly developed and promoted its own content as an alternative to results from other websites,” the paper says. “By prominently displaying Google content in response to search queries, Google is able to leverage its dominance in search to gain customers for this content. This yields serious concerns if the internal content is inferior to organic search results. To investigate, we implement a randomized controlled trial in which we vary the search results that users are shown – comparing Google’s current policy of favorable treatment of Google content to results in which external content is displayed. We find that users are 45% more likely to engage with universal search results (i.e. prominently displayed map results on Google) when he results are organically determined. This suggests that by leveraging dominance in search to promote its internal content, Google is reducing social welfare – leaving consumers with lower quality results and worse matches.”

    Here’s the full report, uploaded by Yelp’s Luther Lowe:

    It shouldn’t surprise anyone to see Yelp putting out such a report, but Wu on the other hand, said in the past that “Google was pretty clean.” This was in the aftermath of an FTC settlement a couple years back.

    He wrote this in January of 2013: “What saved the company weren’t the millions Google wasted lobbying Senators or paying Republicans to be its friends. It was its engineers, who designed its services in a way that maximized effectiveness while avoiding rampant illegality.”

    “Google just didn’t have this kind of blood on its hands, at least at this point in its history,” he later wrote in the same column. “Yes, Google had made decisions that its competitors didn’t like, but ultimately American law favors an improved product over the protection of failed competitors; that is the standard that the FTC is obliged to adhere to. And with some exceptions mentioned above, Google’s engineers generally produced products that beat its competitors on the merits. Ultimately, it is not the job of the Federal Government to try and convince people to use Bing.”

    Wu has some significantly different things to day now, however. From Re/code:

    “When the facts change, your thinking should change,” Wu told Re/code about the evolution of his stance. “The main surprising and shocking realization is that Google is not presenting its best product. In fact, it’s presenting a version of the product that’s degraded and intentionally worse for consumers.”

    He added: “This is the closest I’ve seen Google come to [being] the Microsoft case.”

    Google isn’t commenting on the study’s findings.

    Image via YouTube

  • EU Is Questioning Ecommerce Companies In Broad Inquiry

    EU Is Questioning Ecommerce Companies In Broad Inquiry

    Back in March, the European Commission announced a proposal for an ecommerce sector antitrust inquiry. It said at the time that there were indications that some companies could be taking measures to restrict cross-border ecommerce, and that the inquiry would focus on better identifying and addressing such measures.

    “It is high time to remove remaining barriers to e-commerce, which is a vital part of a true Digital Single Market in Europe,” said Commissioner Margrethe Vestager. “The envisaged sector inquiry will help the Commission to understand and tackle barriers to e-commerce to the benefit of European citizens and business.”

    A lot of ecommerce businesses have been getting questioned by the EU as part of the probe, according to a report from The Wall Street Journal, which says:

    The European Commission, the bloc’s top antitrust regulator, sent out the first batch of questionnaires last week to businesses in all 28 EU countries. More than 2,000 businesses are expected to be questioned as part of the probe, including online marketplaces; Internet streaming services; content producers; manufacturers that sell goods online; as well as broadcasters.

    One executive at a U.S.-based Internet company who didn’t want to be identified said the questionnaires were “quite lengthy” and had been sent to “everyone and their brother.”

    The publication managed to get its hands on a copy of the questionnaire, which has over 150 pages. It reportedly says it aims ti give regulators a “better understanding of e-commerce-related business practices as they affect providers of digital content.”

    According to the EU, about half of EU consumers shopped online in 2014, but only 15% of them bought online from a seller based in another EU Member State.

    Image via Wikimedia Commons

  • Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    By now you’ve probably heard that Comcast has abandoned its push to acquire Time Warner Cable, due to looming concerns that both the Department of Justice’s antitrust division and the Federal Communications Commission were poised to recommend it blocked.

    “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away,” said Comcast CEO Brian Roberts.

    Now, both the DoJ and the FCC have issued official statements on the death of the merger, and they both sign a similar tune. A main concern for both the DoJ and the FCC, apparently, was Netflix (& other streaming services, of course) and Net Neutrality.

    Take a look at FCC Chairman Tom Wheeler’s statement (bolding ours):

    Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services. I am proud of our close working relationship throughout the review process with the Antitrust Division of the Department of Justice. Our collaboration provided both agencies with a deeper understanding of the important issues of innovation and competition that the proposed transaction raised.

    And here’s what Attorney General Eric Holder had to say:

    The companies’ decision to abandon this deal is the best outcome for American consumers. The Antitrust Division of the United States Department of Justice has demonstrated, time and again, that it can and will defend the interests of the American consumer no matter the complexity of the issue or the size of the opponent. This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world. I commend the Antitrust attorneys and investigators whose outstanding work led to this outcome, and I know that the Department of Justice will continue to fight for fair access and free competition in every industry and every market.

    According to the Wall Street Journal, Holder had already authorized the DoJ antitrust officials to file a lawsuit against the deal.

    Netflix was vehemently against the merger from the beginning, as the streaming company was forced to pay Comcast a fee for access.

    Netflix said that the merger would’ve “set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests.”

    It appears the feds agreed.

  • Comcast / Time Warner Cable Merger Is Dead, Officially

    Comcast / Time Warner Cable Merger Is Dead, Officially

    It’s official. Comcast has announced it has abandoned its efforts to acquire Time Warner Cable, in a deal that would’ve been valued at around $45 billion. This follows reports on Thursday that said the Department of Justice and Federal Communications Commission were both gearing up to recommend against the deal.

    If the merger had been approved, the Comcast-TWC behemoth would’ve controlled 57% of the US broadband market and 30% of the cable market.

    “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away. Comcast NBCUniversal is a unique company with strong momentum. Throughout this entire process, our employees have kept their eye on the ball and we have had fantastic operating results. I want to thank them and the employees of Time Warner Cable for their tireless efforts. I couldn’t be more proud of this company and I am truly excited for what’s next,” said Comcast CEO Brian Roberts in a statement.

    Time Warner Cable CEO Robert Marcus also weighed in on the decision, saying,

    “We have always believed that Time Warner Cable is a one-of-a-kind asset. We are strong and getting stronger. Throughout this process, we’ve been laser focused on executing our operating plan and investing in our plant, products and people to deliver great experiences to our customers. Through our strong operational execution and smart capital allocation, we are confident we will continue to create significant value for shareholders. I’m extremely proud of the professionalism, dedication and resiliency our 55,000 employees have shown over the past year and thank them for their continued commitment to Time Warner Cable.”

    Comcast’s line for over a year had been that the acquisition is “pro-consumer, pro-competitive, strongly in the public interest, and approvable” – but in the end the regulatory bodies in charge of reviewing the merger did not agree.

    The deal was unpopular from the start, as consumer advocates argued that the company would be anti-competitive and bad for customers.

    “Should the transaction survive the FCC’s and DOJ’s reviews, we believe that Comcast-TWC’s unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans – inhibiting US consumers’ ability to fully benefit from modern technologies and American businesses’ capacity to innovate and compete on a global scale,” wrote Senators Al Franken, Bernie Sanders, Edward Markey, Ron Wyden, Elizabeth Warren, and Richard Blumenthal in a recent letter to the DoJ and FCC.

    This final decision comes on the heels of reports that the FCC had proposed a “hearing designation order” for the merger review – a move that signaled the deal was fast approaching dead.

    “In effect, that would put the $45.2 billion merger in the hands of an administrative law judge, and would be seen as a strong sign the FCC doesn’t believe the deal is in the public interest,” wrote the Wall Street Journal.

    The FCC wasn’t the only regulatory agency with doubts about the merger. Antitrust officials at the Department of Justice were reportedly ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers.

    Here’s a final way to look at it – with this, the two most-hated companies in America will not be joining forces.

    So, who’s going to try to buy Time Warner Cable now?

    Image via Steven Depolo, Flickr Creative Commons

  • Comcast Is Giving Up on Its TWC Deal: Report

    Comcast Is Giving Up on Its TWC Deal: Report

    Comcast is planning to kill its proposed acquisition of Time Warner Cable before the feds can kill it first.

    Bloomberg is quoting sources who say that Comcast is ready to back away from the merger, which would be valued at around $45 billion.

    This comes on the heels of reports that the FCC had proposed a “hearing designation order” for the merger review – a move that signaled the deal was fast approaching dead.

    “In effect, that would put the $45.2 billion merger in the hands of an administrative law judge, and would be seen as a strong sign the FCC doesn’t believe the deal is in the public interest,” wrote the Wall Street Journal.

    The FCC isn’t the only regulatory agency with doubts about the merger. Antitrust officials at the Department of Justice were reportedly ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers.

    Comcast met with reps from both the DoJ and the FCC to try to iron out a deal – compromises to make the merger happen – but it appears those talks went nowhere.

    But as Bloomberg points out, the FCC pill was much tougher to swallow than the one from the Justice Department, however bitter it may have been:

    While the DOJ has to present a case in court to block the deal, an FCC hearing referral could prove to be the bigger obstacle to Comcast’s bid to expand its cable and Internet footprint. The last time the FCC staff proposed sending a merger to a hearing was over AT&T Inc.’s bid to buy T-Mobile USA Inc. in 2011, prompting the companies to drop the deal. The Justice Department had already brought a lawsuit seeking to block the merger.

    Comcast’s line for over a year has been that the acquisition is “pro-consumer, pro-competitive, strongly in the public interest, and approvable.” We’ll see if Comcast is soon signing a different tune. A final decision on whether to abandon the deal could come as early as Friday.

    Image via Steven Depolo, Flickr Creative Commons

  • Elizabeth Warren, Al Franken Among Six Senators Urging a Swift Death for the Comcast/Time Warner Merger

    Elizabeth Warren, Al Franken Among Six Senators Urging a Swift Death for the Comcast/Time Warner Merger

    In a letter addressed to Federal Communications Commission Chairman Tom Wheeler and Attorney General Eric Holder, six Senators are urging the blockage of Comcast’s proposed merger with Time Warner Cable. The letter comes just one day before representatives from Comcast and Time Warner Cable are set to meet with DoJ antitrust officials in the hopes of saving a deal that appears to be on shaky ground.

    “Should the transaction survive the FCC’s and DOJ’s reviews, we believe that Comcast-TWC’s unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans – inhibiting US consumers’ ability to fully benefit from modern technologies and American businesses’ capacity to innovate and compete on a global scale,” write Senators Al Franken, Bernie Sanders, Edward Markey, Ron Wyden, Elizabeth Warren, and Richard Blumenthal.

    “Since the proposal was announced last year, we have heard from consumers across the nation, as well as from advocacy groups, trade associations, and companies of all sizes, all of whom fear that the deal would harm competition across several different markets and would not serve the public interest,” says the letter.

    “We’ve also heard from constituents in our home states who are rightfully frustrated about their increasingly high cable and Internet bills and are concerned that the proposed acquisition will only drive those prices higher. Unfortunately, with only a handful of cable and Internet providers dominating the market, consumers are often left with little choice but to pay the price a given provider demands and have little say over what content is made available to them.”

    If the merger were to go through, the Comcast-TWC behemoth would control 57% of the US broadband market and 30% of the cable market.

    But it’s far from a sure thing. In fact, recent reports have indicated that the Department of Justice is poised to recommend blocking the deal. Upon hearing that news, Comcast and Time Warner Cable rushed into action and are set to meet face-to-face with regulators for the first time since they proposed the deal. It is expected that Comcast will attempt to make concessions to satisfy regulators, some of whom are as wary as the Senators.

    Comcast’s official line has always been that the deal is not anti-competitive.

    “Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable,” says the company.

    “We urge you to defend American competition and innovation and ensure the Americans have affordable access to high-quality telecommunications services. We hope you’ll take a stand for US consumers and businesses and reject Comcast’s proposed acquisition of TWC,” say the Senators.

    Image via Wikimedia Commons, h/t Ars Technica

  • Comcast, TWC Will Meet with Regulators to Try to Save Deal

    Comcast, TWC Will Meet with Regulators to Try to Save Deal

    With their proposed merger on shaky ground, representatives from Comcast and Time Warner Cable are planning to meet with Justice Department officials in the hopes of negotiating a pathway for the deal to proceed.

    This will be the first such meeting between the cable companies and regulators since the merger was announced.

    The Wall Street Journal Reports that Comcast will likely offer concessions to assuage wary antitrust officials at the DoJ. From the WSJ:

    The Wednesday meeting with antitrust officials could be the first of many, but it isn’t clear whether the companies can offer concessions that will satisfy regulators.

    Looming over any discussion about merger remedies will be the concessions Comcast made in 2011 to win approval to acquire control of NBCUniversal. People familiar with the current review process say the Justice Department and the FCC have been examining whether Comcast has fully complied with those earlier commitments.

    Last week, Bloomberg reported that antitrust officials at the Department of Justice were ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers. The Federal Communications Commission is also looking into the merger, and has plenty of concerns of its own, according to reports.

    Comcast’s official line is that the deal is not anti-competitive.

    “Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable,” says the company.

    Image via Steven Depolo, Flickr Creative Commons

  • Regulators Ready to Kill Comcast / TWC Merger: Report

    Regulators Ready to Kill Comcast / TWC Merger: Report

    One of the regulatory agencies looking over the proposed Comcast / Time Warner Cable merger may be about to give it the thumbs down, citing concerns over potential harm to customers.

    Bloomberg cites the ubiquitous “people familiar with the matter” in saying that antitrust lawyers at the Department of Justice are poised to recommend against the merger.

    From Bloomberg:

    Attorneys who are investigating Comcast’s $45.2 billion proposal to create a nationwide cable giant are leaning against the merger out of concerns that consumers would be harmed and could submit their review as soon as next week, said the people.

    The antitrust lawyers will present their findings to Renata Hesse, a deputy assistant attorney general for antitrust, who will decide, along with the division’s top officials, whether to file a federal lawsuit to block the deal, they said.

    The Justice Department lawyers have been contacting outside parties in the last few weeks to shore up evidence to support a potential case against the merger, one of the people said.

    The other agency reviewing the deal, the Federal Communications Commission, is not sold either, according to reports. The deal, which looked like a sure thing a year ago, is in serious danger of falling apart. Some have already proclaimed it dead.

    Bloomberg has news on that front, too, saying “officials at the antitrust division and the Federal Communications Commission, which is also reviewing the deal, aren’t negotiating with Comcast about conditions to the merger that would resolve concerns.”

    Comcast’s official line on the merger is that it is pro-consumer and pro-competition.

    Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable. It will deliver better services and technology to Time Warner Cable’s subscribers and result in no reduction of choice for consumers. Following the acquisition and possible divestiture of some subscribers, Comcast subscribers will represent essentially the same share of nationwide MVPD subscribers as Comcast’s shares following the Adelphia and AT&T Broadband transactions in a much more competitive and dynamic marketplace. This transaction will create a world-class technology and media company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.

    Last month, the fourth-largest cable provider agreed to acquire the sixth-largest as Charter Commutations offered $10,4 billion for Bright House Networks. If the Comcast / Time Warner Cable deal were to go through, the #1 and #2 providers in the US would combine to form a behemoth. The two remain the most despised companies in America.

    Image via Steven Depolo, Flickr Creative Commons

  • Should Google Be Slapped With Antitrust Action?

    After a five-year long investigation, the European Commissioned announced it has sent a Statement of Objections to Google alleging it has abused its dominant position in the markets for general internet search services by favoring its own comparison shopping product in general search pages.

    The commission says this infringes on EU antitrust rules because “it stifles competition and harms consumers”. The commission notes that sending a Statement of Objections does not prejudge the outcome of the investigation.

    Do you believe Google’s practices harm consumers or stifle competition? Let us know in the comments.

    But that’s only part of the news as the commission has also launched a formal investigation into Google’s Android business. We’ll get to that later. First things first.

    Search

    EU Commissioner in charge of competition policy Margrethe Vestager said: “The Commission’s objective is to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation”.

    “In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules. Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”

    Let the convincing commence. Google has already posted an article to its official blog called “The Search for Harm“.

    In that, Amit Singhal, Senior Vice President, Google Search writes, “In the summer of 2010, Google announced plans to acquire the flight search provider, ITA. As we said at the time, while many people buy their airline tickets online, finding the right flight at the best price can be a real hassle. Today Google Flight Search has made that much easier. Search for ‘Flight CDG to SFO’ and you get the different options right there on the results page. It’s a great example of Google’s increasing ability to answer queries directly, saving people a lot of time and effort — because as Larry Page said over a decade ago ‘the perfect search engine should understand exactly what you mean and give you back exactly what you want’.”

    “At the time of the ITA acquisition, several online travel companies–Expedia, Kayak, and Travelocity–unsuccessfully lobbied regulators in the US and the European Union to block the deal, arguing that our ability to show flight options directly would siphon off their traffic and harm competition online. Four years later it’s clear their allegations of harm turned out to be untrue. As the Washington Post recently pointed out (in an article headed ‘Google Flight Search, four years in: not the competition-killer critics feared’) Expedia, Orbitz, Priceline and Travelocity account for 95% of the US online travel market today.”

    Noting a “similar situation in Europe,” he shares this graph looking at travel sites in Germany:

    Later in the posts, he shows similar graphs for shopping sites in Germany, France, and the UK, each of which show Google Shopping being trounced by other sites like Amazon, eBay, and others.

    According to Singhal, people have more choice than ever before. For search, they have Bing, Yahoo, Quora, DuckDuckGo, and “a new wave of search assistants” including Apple’s Siri and Microsoft’s Cortana. For specialized search, he names Amazon, Idealo, Le Guide, Expedia and eBay. For social sites, which he says people are increasingly using to find recommendations, he names Facebook, Pinterest, and Twitter for finding things like where to eat, which ovies to watch, or how to decorate their homes. For news, he says people often go directly to their favorite sites.

    “Of course mobile is changing things as well,” he writes. “Today 7 out of every 8 minutes on mobile devices is spent within apps — in other words consumers are going to whichever websites or apps serve them best. And they face no friction or costs in switching between them. Yelp, for example, has told investors they get over 40% of their traffic direct from their mobile app. So while in many ways it’s flattering to be described as a gatekeeper, the facts don’t actually bear that out. ”

    He continues, “Which brings me to the competition. Companies like Axel Springer, Expedia, TripAdvisor, and Yelp (all vociferous complainants in this process) have alleged that Google’s practice of including our specialized results (Flight Search, Maps, Local results, etc.) in search has significantly harmed their businesses. But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.”

    “Yelp calls itself the ‘de facto local search engine’ and has seen revenue growth of over 350% in the last four years. TripAdvisor claims to be the Web’s largest travel brand and has nearly doubled its revenues in the last four years. Expedia has grown its revenues by more than 67% over the same period.”

    He even quotes something Expedia allegedly told investors, noting that it’s “remarkable” given their complaints: “We’re seeing increased traffic coming through Google Hotel Finder. It is ­clearly getting more exposure. And in general … the product continues to improve. And Google has invested in it, we’ll continue to invest in it … From our standpoint, we’re happy to play in any market that Google puts out there and over a long period of time, we have proven an ability to get our fair share in the Google marketplaces.”

    Yeah, that one’s a bit of a head scratcher.

    Axel Springer, Singhal notes, “continues to invest in search, including the French search engine Qwant, because as the company told investors, ‘there is a lot of innovation on the search market‘.”

    He concludes the whole post by saying, “Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player. Yet that is exactly what’s happening in our world. Zalando, the German shopping site, went public in 2014 in one of Europe’s biggest-ever tech IPOs. Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding. We’re seeing innovation in voice search and the rise of search assistants — with even more to come. It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead.”

    The Commission, which says it’s concerned users don’t necessarily see the most relevant results in response to queries “to the detriment of consumers and rival comparison shopping services” and that it’s “stifling innovation,” has put out a fact sheet about its Statement of Objections to Google. It goes on to name the following points as its preliminary conclusions (emphasis from the Commission):

    Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.

    Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.

    Froogle, Google’s first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.

    As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.

    Google’s conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google’s product.

    The Commission says to “remedy the conduct,” Google should “treat its own comparison shopping service and those of rivals in the same way.” It adds, “This would not interfere with either the algorithms Google applies or how it designs its search results pages. It would, however, mean that when Google shows comparison shopping services in response to a user’s query, the most relevant service or services would be selected to appear in Google’s search results pages.”

    The Statement of Objections gives Google a chance to make its case and seek an oral hearing to present its comments. The Commission says it will carefully consider Google’s comments before taking a decision. It also points out that the Statement of Objections only relates to the first of four concerns the Commission has outlined in the past, and that it continues to investigate Google’s conduct with regards to the others.

    The FairSearch Coalition, a group of complaining Google competitors, said, “The Commission’s actions are significant steps toward ending Google’s anti-competitive practices, which have harmed innovation and consumer choice. More than 30 companies and consumer organizations filed complaints concerning Google’s abuse of its dominance in search. Google’s abuses have devastated rivals, from mapping to video search to product price comparison. While the Commission’s action concerning the search practices of Google is very significant, it has previously identified other problematic areas that are not covered, and we look forward to those being addressed in due course.”

    Android

    As mentioned, the commission has opened a new investigation into Android, even as reports are circulating that Apple sold more of its smart watches on the first day of sales than manufacturers sold Android smart watches throughout all of last year.

    “Since 2005, Google has led development of the Android mobile operating system,” the Commission says. “Android is an open-source system, meaning that it can be freely used and developed by anyone. The majority of smartphone and tablet manufacturers use the Android operating system in combination with a range of Google’s proprietary applications and services. These manufacturers enter into agreements with Google to obtain the right to install Google’s applications on their Android devices. The Commission’s in-depth investigation will focus on whether Google has breached EU antitrust rules by hindering the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products.”

    “Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company,” said Vestager

    The investigation will focus on three main allegations (again, emphasis is the Commission’s):

    1. whether Google has illegally hindered the development and market access of rival mobile applications or services by requiring or incentivising smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services;

    2. whether Google has prevented smartphone and tablet manufacturers who wish to install Google’s applications and services on some of their Android devices from developing and marketing modified and potentially competing versions of Android (so-called “Android forks”) on other devices, thereby illegally hindering the development and market access of rival mobile operating systems and mobile applications or services;

    3. whether Google has illegally hindered the development and market access of rival applications and services by tying or bundling certain Google applications and services distributed on Android devices with other Google applications, services and/or application programming interfaces of Google.

    FairSearch weighed in on that too: “The Commission’s determination to investigate this is important because Google Android has used its dominance to move from an open system to a closed one, so it can exclude competitors to the benefit of its own businesses.”

    Google has already responded to the Android allegations as well with a post called “Android has helped create more choice and innovation on mobile than ever before“.

    This time it’s Hiroshi Lockheimer, VP of Engineering, Android making the argument: “The pace of mobile innovation has never been greater. Smartphones are being adopted globally at an increasingly fast pace, with over hundreds of millions shipped each quarter, and the average smartphone price fell 23% between 2012 and 2014. It’s now possible to purchase a powerful smartphone, without subsidies or contracts, for under $100. And the app ecosystem has exploded, giving consumers more choice than ever before. Android has been a key player in spurring this competition and choice, lowering prices and increasing choice for everyone (there are over 18,000 different devices available today).”

    He continues, “It’s an open-source operating system that can be used free-of-charge by anyone—that’s right, literally anyone. And it’s not just phones. Today people are building almost anything with Android—including tablets, watches, TVs, cars, and more. Some Android devices use Google services, and others do not. Our Google Play store contains over one million apps and we paid out over $7 billion in revenue over the past year to developers and content publishers. Apps that compete directly with Google such as Facebook, Amazon, Microsoft Office, and Expedia are easily available to Android users. Indeed many of these apps come pre-loaded onto Android devices in addition to Google apps. The recent Samsung S6 is a great example of this, including pre-installed apps from Facebook, Microsoft, and Google. Developers have a choice of platforms and over 80% of developers are building apps for several different mobile operating systems.”

    “The European Commission has asked questions about our partner agreements. It’s important to remember that these are voluntary—again, you can use Android without Google—but provide real benefits to Android users, developers and the broader ecosystem.”

    He concludes by making the point that Android’s success isn’t just about benefiting Google, but that it has helped manufacturers compete with one another with their own offerings while helping developers increase their audiences.

    Should Google be penalized either for search or for Android practices? Neither? Both? Tell us what you think.

    Images via Google

  • Google Is Reportedly About To Be Hit With Antitrust Charges In Europe

    Earlier this month, we heard that the European Commission was about to “move against” Google, “setting the stage for charges” against the search giant after a five-year-long investigation and several attempts by Google to settle. Now, the WSJ is reporting again that Europe’s antitrust regulator has indeed decided to file formal charges.

    This will be the EU’s largest antitrust case since the famous one against Microsoft.

    According to the report, new antitrust chief Margrethe Vestager made the decision on Tuesday after consulting with European Commission President Jean-Claude Juncker. She is expected to inform the other EU commissioners at a Wednesday meeting. Google could reportedly face fines in excess of $6 billion (10% of its annual revenues based on last year).

    Even with formal charges, settlement discussions can reportedly still take place, and but if unproductive, Google may face major penalties.

    If the case goes to court, the whole thing could play out for a much longer period of time.

    Earlier this month, reports came out that the commission has been asking companies who have filed complaints against the search giant for permission to publish info they submitted as confidential. These include those in the shopping, local, and travel industries.

    Obviously we’ll learn more as the Commission makes a formal announcement.

    Image via Google