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Google on verge of antitrust deal with European regulators

Jeff John Roberts — Tue, 24 Jul 2012 19:36:59 +0000

A long-running dance between the European Commission and Google over antitrust allegations is finally coming to an end amid reports that the two sides have reached an “understanding.”

According to a report by the Financial Times (registration required), Google offered to “make significant changes to its business practices” in order to avoid large fines and drawn out legal proceedings like what behalf Microsoft in the 1990s. The two sides are expected to announce a formal deal in the next few days.

A deal — if it actually does arrive — would finally put a stop to an ongoing drip-drip of rumors and leaks. As GigaOm’s Bobbie Johnson recounted in early July, Google offered up a “settlement letter” right before the expiration of a deadline imposed this spring by the European Commission.

The news comes after a lengthy investigation in which the European Commission had raised questions about four aspects of Google’s business: 1) whether Google favored its own products in search results at the expense of competitors; 2) whether it reproduced content from other websites without permission; 3) whether it used its market share to tell advertisers not to use other search ad services; 4) whether it locked advertisers into its services in a way that didn’t let them move their ad campaigns to rivals.

The stakes are especially high because Google controls up to 90 percent of the European search market compared to around 60 percent in the US.

The FT reported that a breakthrough came after Google agreed that the EC’s proposed remedies would apply not just to computer-based searches but to mobile searches as well. The paper added, however, that regulators would likely continue a separate investigation into whether Google was committing anti-competitive behavior with its Android mobile phones and tabloid operating systems.

Neither side has provided details about how exactly the deal will address the four concerns but an EC spokesman told the New York Times, “The commission considers Google’s proposals as a good basis for further talks and has now reached a good level of understanding.”

In an emailed statement to GigaOM, Google merely said ”We continue to work cooperatively with the European Commission.”

The antitrust investigation came after Microsoft and other companies pressed regulators to address what they claimed was Google’s unfair dominance in the market. Google also faces ongoing antitrust investigations in other countries including Korea, India and Britain. Meanwhile, it is also facing lawsuits over its AdWords policies everywhere from France to the United States.

European Commission competition chief Joaquin Almunia has held himself out as a pragmatist who would reach settlements in the technology sector where companies and products often evolve faster than regulators can react to them.

A decision to settle with Google may also be borne of another factor: fines may not work. Despite seemingly massive fines on Microsoft, there is evidence that the fines had little impact on the company’s financial performance.

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What controversy? Verizon, Time Warner begin cross-selling services

Kevin Fitchard — Thu, 12 Apr 2012 20:04:35 +0000

Verizon’s joint marketing pact with the cable providers may be facing some serious scrutiny, but Verizon and its partners don’t seem to have noticed. On Thursday, Time Warner Cable blithely announced they would launch bundled mobile and cable services together in five markets.

The move is the first Verizon Wireless has made with Time Warner to sell each other’s respective wireless and wire line wares, but Verizon and Comcast have already forged ahead on the west coast, working together in Portland, Ore.; Seattle and Spokane, Wash.; and San Francisco. In the Bay Area, Verizon and Comcast struck right in the heart of AT&T’s U-Verse territory, demonstrating just how powerful their tag team arrangement can be.

Time Warner and Verizon Wireless are kicking off their partnership in Cincinnati, Columbus and Toledo, Ohio; Kansas City, Kan.; and Raleigh, N.C., but plan to expand to other Time Warner markets in coming months. As in the Comcast arrangement, customers will be able to purchase a bundle of Time Warner cable TV, broadband and home phone and Verizon mobile services. They’re also sweetening the deal with a $200 prepaid debit card.

The Federal Communications Commission hasn’t yet approved the $3.6 billion spectrum sale the Verizon-cable partnerships hinge on, and the Justice Department is reportedly examining the implications of the pact on mobile and broadband completion. Congress has also gotten involved, calling Comcast and Verizon executives to task on what amounts to a cease-fire in the residential broadband market.

Verizon and the cable operators argue that their cross-selling venture and the spectrum sale are entirely unrelated, which explains why they’re moving forward with their marketing pact while the fate of their financial transaction is still in limbo. Though the FCC has authority on the license transfer, the Justice Department most likely will have to make the call on whether the partnerships amounts to collusion – and that will require an antitrust lawsuit. That leaves Verizon and the cable operators to press ahead until someone tells them they can’t.

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German regulators want details on Apple’s use of Carrier IQ

Darrell Etherington — Fri, 02 Dec 2011 14:26:14 +0000

Apple was probably hoping that its statement on Thursday about Carrier IQ, the software found to be installed on many devices that reports and records user activity, would be enough to reassure people any potential danger had passed. Some regulators, however, think Apple needs to do more reassuring.

The Bavarian State Authority for Data Protection, a German data regulator, sent a letter to Apple on Friday requesting that the iPhone maker provide more details about the software and its use, according to a Bloomberg interview with the regulator organization’s chief, Thomas Kranig.

Apple said in its statement on the matter that its use of Carrier IQ was limited to diagnostic information and was opt-in only. If you’ve recently set up an iOS 5 device, you may remember the request made during the setup process to allow your device to send diagnostic and usage information to Apple. You can check if you’re sending data by navigating to General > About > Diagnostics & Usage in your iOS device’s Settings app and either opt in or opt out. On this screen, Apple says it uses the information to “improve its products and services.” Apple further stated that Carrier IQ has been removed for most devices in iOS 5 and will be taken out completely in future updates.

Kranig says that “if Apple decided to cease the use [of Carrier IQ], all the better,” but the organization is still seeking more information. Senator Al Franken (D-Minn.) also called (PDF) for Carrier IQ to release details to the public about why exactly its software tracks and records the information that it does. Franken previously pursued Apple and Google for more information about how customers’ personal location information was being gathered and used on iOS and Android devices.

This Carrier IQ situation could result in another round of scrutiny by regulators in the U.S. and abroad, and I doubt that Apple has seen the worst of it yet.

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Google, this is why you’re under investigation

Bobbie Johnson — Mon, 18 Jul 2011 15:24:12 +0000

It’s hardly a secret that most big businesses hate regulators. They’re often seen as cartoonish villains, meddling in the affairs of others to satisfy their own (bureaucratic) agendas rather than serve the interests of ordinary people.

Sometimes that’s accurate — though not always. Take, for example, the decision last year by European officials to launch an antitrust investigation into Google. It was met with howls of derision by those who felt that it was sour grapes from competitors (including Microsoft) or simply a misguided attack on a hugely successful foreign company. Those concerns were exacerbated even further last month when the U.S. Federal Trade Commission decided to start its own inquiry, with a confidence no doubt spurred on by Europe’s actions.

It’s easy to dismiss the claims against Google as carping by rivals. But for anyone who thinks the EU investigation isn’t warranted, here are a couple of data points worth thinking about.

First, figures from Hitwise suggest Google now accounts for 92 percent of all search traffic in the U.K. That’s an all-time high for the company, signifying complete domination of the market. The figure is actually higher in some other European countries, and significantly more than its North American market share. Google dominates the European market to a degree that is far greater than its successes at home.

Elsewhere, it emerged over the weekend that the Belgian newspapers locked in a dispute with Google were back in conflict again. A consortium known as Copiepresse famously filed a lawsuit against the company in 2006, claiming Google News should not excerpt their articles without permission or payment. The news group won the case, eventually, but it was pretty acrimonious. Now, however, it appears Google is playing hard ball again, saying in order to comply with the court’s wishes it has to remove Copiepresse entirely from its index.

So that’s erasing Copiepresse not just from News, but also from the main Google search engine, too.

Google spokesman William Echikson said the court decision applied to web search as well as Google News and the company faced fines of 25,000 euros ($35,359) per infringement if it allowed the newspapers’ websites to keep appearing.

“We regret having to do so,” he said. “We would be happy to re-include Copiepresse if they would indicate their desire to appear in Google Search and waive the potential penalties.”

Copiepresse argues it’s a willful misreading of the court’s decision and it’s being punished by Google for standing up to it. Whatever the case, it’s yet another mess caused by Google’s power.

Of course, it’s worth pointing out that it’s entirely possible to become totally dominant in a market through simply being better than anyone else. But it’s also worth saying that being investigated by a regulator doesn’t mean the same as being found guilty by them. When it comes to government regulators getting involved in technology businesses, though, the question is not whether it’s possible to control a market — it is whether it’s healthy. And that is less obvious, and therefore why an investigation on both sides of the Atlantic may be necessary.

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Out Come Those Who Oppose Comcast/NBC

Chris Albrecht — Thu, 03 Dec 2009 18:56:41 +0000

In the land of mega-meals and mega-churches, it’s only natural that we’d have a mega-media-JV like the one announced today between Comcast and NBC. But a deal this big will naturally bring along with it some regulatory scrutiny.

The CEO of the new venture, Jeff Zucker, sent out a memo to NBC staffers today reinforcing what experts have said, that the regulatory approvals “will take 9 to 12 months.”

No sooner had Zucker written those words than the wheels of government were set in motion as House Energy & Commerce Committee Chairman Henry Waxman (D-Calif.) called for hearings on the NBC-Comcast deal “at the earliest practicable date.” Waxman said in a statement:

This proposal raises questions regarding diversity, competition, and the future of the production and distribution of video content across broadcasting, cable, online, and mobile platforms. It is imperative that the FCC, the Justice Department, and the FTC rigorously assess whether this transaction is in the public interest.

He’s not the only one questioning this union. The Free Press and Consumer Federation of America released a statement today arguing that Comcast/NBC “would seriously harm the public interest,” saying it would hurt competition in traditional video markets and the emerging online video market as well as triggering more media consolidation. Read their full report (PDF).

Public-interest advocacy group Public Knowledge also released a statement saying:

The combination of the country’s largest cable company, a TV network and a movie studio could present grave dangers to a free and open Internet. The sheer size of the transaction makes a Net Neutrality rule that much more necessary, as more content comes under the control of another giant media company. Regulators will have to make certain that Comcast does not give advantage to NBC programs and films over others.

Now we just have to wait and see if the Obama administration will be a mega-headache for this mega-deal.

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