Google to stop treating EU antitrust remedy as a “promotional opportunity”

Google and the European Union have been fighting for several years over Android’s default search engine. Just like when the EU took issue with Microsoft bundling Internet Explorer with Windows, the EU Antitrust enforcers don’t want Google using its Android operating system monopoly to prop up Google Search and Google Chrome. The solution the EU came to—just like it did with Windows—is a “ballot” system that pops up during setup and asks users to pick a starting browser and search engine from a list. The only problem? Google was charging companies to appear in this list. It was basically an ad vector. In a blog post this week, Google says it will stop doing that.

The ballots that allowed users to pick a search engine and browser only have five spots, and with way more than five browsers and search engines available, deciding who gets on the list is a contentious subject. First, Google decided that preinstalled apps get sorted to the top of the list. As you can see in the screenshot, the preinstalled apps are almost always Google apps, so Google’s decision here happens to work out really well for the company.

As for the other four slots, Google originally described them in 2019 by saying, “Apps that are not already installed on the device will be included based on their popularity and shown in a random order.” Sometime after that, Google fell back on its instincts as the world’s largest advertising company and thought, “Those are actually ad slots, and we should charge for them!”

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#antitrust, #ballot, #eu, #google, #tech

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Google ditches pay-to-play Android search choice auction for free version after EU pressure

Google is ditching a massively unpopular auction format that underpins an choice screen it offers in the European Union, it said today. Eligible search providers will be able to freely participate.

The auction model was Google’s ‘remedy’ of choice — following the 2018 EU $5BN antitrust enforcement against Android — but rivals have always maintained it’s anything but fair, as we’ve reported previously (here, here, here, for eg).

The Android choice screen presents users in the region with a selection of search engines to choose as a default at the point of device set up (or factory reset). The offered choices depend on sealed bids made by search engine companies bidding to pay Google to win one of three available slots.

Google’s own search engine is a staple ‘choice’ on the screen regardless of EU market.

The pay-to-play model Google devised is not only loudly hated by smaller search engine players (including those with alternative business models, such as the Ecosia tree-planting search engine), but it been entirely ineffectual at restoring competitive balance in search marketshare so it’s not surprising Google has been forced to ditch it.

The Commission had signalled a change might be coming, with Bloomberg reporting in May remarks by the EU’s competition chief, Margrethe Vesager, that it was “actively working on making” Google’s Android choice screen for search and browser rivals work. So it evidently heard the repeated cries of ‘foul’ and ‘it’s not working, yo!’. And — finally — it acted.

However, framing its own narrative, Google writes that it’s been in “constructive discussions” with EU lawmakers for years about “how to promote even more choice on Android devices, while ensuring that we can continue to invest in, and provide, the Android platform for free for the long term”, as it puts it.

It also seems to be trying to throw some shade/blame back at the EU — writing that it only introduced what it calls a “promotional opportunity” (lol) “in consultation with the Commission”. (Ergo, ‘don’t blame us gov, blame them!’)

In another detail-light paragraph of its blog, Google says it’s now making “some final changes” — including making participation free for “eligible search providers” — after what it describes as “further feedback from the Commission”

“We will also be increasing the number of search providers shown on the screen. These changes will come into effect from September this year on Android devices,” it adds.

The planned changes raise new questions — such as what criteria it will be using to determine eligibility; and will Google’s criteria be transparent or, like the problematic auction, sealed from view? And how many search engines will be presented to users? More than the current four, that’s clear.

Where Google’s own search engine will appear in the list will also be very interesting to see, as well as the criteria for ranking all the options (marketshare? random allocation?).

Google’s blog is mealy mouthed on any/all such detail — but the Commission gave us a pretty good glimpse when we asked (see their comment below).

It still remains to seen whether any other devilish dark pattern design details will appear when we see the full implementation.

But it’s worth noting that it’s not in Google’s gift to claim these changes are “final”. EU regulators are responsible for monitoring antitrust compliance — so if fresh complaints flow they will be duty bound to listen and react.

In one response to Google’s auction U-turn, pro-privacy search player DuckDuckGo was already critical — but more on the scope than the detail.

Founder Gabriel Weinberg pointed out that not only is the switch three years too late but Google should also be applying it across all platforms (desktop and Chrome too), as well as making it seamlessly easy for Android users to switch default, rather than gating the choice screen to set-up and/or factory reset (as we’ve reported before).

Another long-time critic of the auction model, tiny not-for-profit Ecosia, was jubilant that its fight against the search behemonth has finally paid off.

Commenting in a statement, CEO Christian Kroll said: “This is a real life David versus Goliath story — and David has won. This is a momentous day, and a real moment of celebration for Ecosia. We’ve campaigned for fairness in the search engine market for several years, and with this, we have something that resembles a level playing field in the market. Search providers now have a chance to compete more fairly in the Android market, based on the appeal of their product, rather than being shut out by monopolistic behaviour.”

The Commission, meanwhile, confirmed to TechCrunch that it acted after a number of competitors raised concerns over the auction model — with a spokeswoman saying it had “discussed with Google means to improve that choice screen to address those concerns”.

“We welcome the changes introduced by Google to the choice screen. Being included on the choice screen will now be free for rival search providers,” she went on. “In addition, more search providers will be included in the choice screen. Therefore, users will have even more opportunities to choose an alternative.”

The Commission also offered a little more detail of how the choice screen will look come fall, saying that “on almost all devices, five search providers will be immediately visible”.

“They will be selected based on their market share in the user’s country and displayed in a randomised order which ensures that Google will not always be the first. Users will be able to scroll down to see up to seven more search providers, bringing the total search providers displayed in the choice screen to 12.”

“These are positive developments for the implementation of the remedy following our Android decision,” the spokeswoman added.

So it will certainly be very interesting indeed to see whether this Commission-reconfigured much bigger and more open choice screen helps move the regional need on Google’s search engine market share.

Interesting times indeed!

#android, #antitrust, #chrome-os, #competition-law, #duckduckgo, #ecosia, #eu, #europe, #european-union, #gabriel-weinberg, #google, #google-search, #margrethe-vestager, #policy, #search-engine, #search-engines

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Antitrust settlement forces Google to revamp ad platform

Antitrust settlement forces Google to revamp ad platform

Enlarge (credit: NurPhoto / Getty Images)

Google is paying a $268 million fine and, in a first, has agreed to overhaul its advertising platform to settle an antitrust probe in France.

After a two-year investigation, the French Competition Authority found that Google had used its ad-management platform for publishers to bolster its ad marketplace, where publishers sell inventory in real time. “Google took advantage of its vertical integration to skew the process,” said Isabelle de Silva, the authority’s president, at a press conference on Monday.

When publishers display ads on a site, they have two options. One is to run ads they’ve sold directly to advertisers. The other is to sell space to an exchange, where multiple advertisers bid to run their ads. In the latter case, known as programmatic advertising, publishers will often put ad space up for auction on multiple exchanges, but they’ll typically use only one ad server to coordinate the auctions and award-winning bids.

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#advertising, #antitrust, #doubleclick, #france, #google, #policy

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France fines Google $268M for adtech abuses and gets interoperability commitments

France’s competition watchdog, L’Autorité de la concurrence, has fined Google up to €220 million (~$268M) in a case related to self-preferencing within the adtech market which the watchdog found constituted an abuse by Google of a dominant position for ad servers for website publishers and mobile apps.

L’Autorité began looking into Google’s adtech business following complaints from a number of French publishers.

Today it said Google had requested a settlement — and is “not disputing the facts of the case” — with the tech giant proposing certain ‘interoperability’ commitments that the regulator has accepted, and which will form a binding part of the decision.

The watchdog called the action a world first in probing Google’s complex algorithmic ad auctions.

Commenting in a statement, L’Autorité’s president, Isabelle de Silva, said: “The decision sanctioning Google has a very special meaning because it is the first decision in the world to look into complex algorithmic processes. Auctions through which online display advertising works. The investigation, carried out particularly quickly, revealed the processes by which Google, relying on its considerable dominant position on ad servers for sites and applications, was favored over its competitors on both ad servers and SSP platforms. These very serious practices penalized competition in the emerging online advertising market, and have enabled Google not only to preserve but also to increase its dominant position. This sanction and these commitments will make it possible to restore a level playing field for all players, and the ability of publishers to make the most of their advertising space. ”

At specific issue is preferential treatment Google granted to its own proprietary technologies — offered under the Google Ad Manager brand — on both the demand and supply sides; via the operation of its DFP ad server (which allows publishers of sites and applications to sell their spaces advertising), and its sales platform SSP AdX (which organizes the auction process allowing publishers to sell their ‘impressions’ or advertising inventories to advertisers), per the watchdog.

L’Autorité found that Google’s preferential treatment of its adtech harmed competitors and publishers.

Reached for comment, a Google spokeswoman referred us to this blog post discussing the settlement where Maria Gomri, a legal director for Google France, writes that it has “agreed on a set of commitments to make it easier for publishers to make use of data and use our tools with other ad technologies” — before detailing the steps it has pledged to take.

The publishing groups that made the original complaint against Google in France were News Corp Inc., the Le Figaro group and the Rossel La Voix group, although Le Figaro withdrew its referral last November — at the same time as it signed a content-licensing deal with Google, related to Google’s News Showcase product (a vehicle Google has spun up as legislators in different markets around the world have taken steps to force it to pay for some content reuse).

France’s competition watchdog had earlier ordered Google to negotiate with publishers over remuneration for reuse of their content, following the transposing into national law of updated, pan-EU copyright rules — which extend neighbouring rights to publishers’ news snippets. So the adtech giant’s operations remain under scrutiny on that front too.

Google agrees to interoperability changes

Google has agreed to improve the interoperability of Google Ad Manager services with third-party ad server and advertising space sales platform solutions, per L’Autorité, as well as agreeing to end provisions that favor itself.

“The practices in question are particularly serious because they penalized Google’s competitors in the SSP market and the publishers of sites and mobile applications,” it writes in a press release (translated from French with Google Translate). “Among these, the press groups — including those who were [the source] of the referral to the Authority — were affected even though their economic model is also strongly weakened by the decline in sales of paper subscriptions and the decline in associated advertising revenue.”

L’Autorité confirmed it has accepted Google’s commitments — and makes them binding in its decision. The commitments will be mandatory for a three year period, per the agreement.

The commitments Google has offered appear to speak to some operational details that have emerged via a Texas antitrust lawsuit also targeting Google’s adtech.

Earlier this year, documents surfaced via that suit which appeared to show the tech giant operated a secret program that used data from past bids in its digital ad exchange to allegedly give its own ad-buying system an advantage over competitors, per the WSJ — which reported that the so-called ‘Project Bernanke’ program was not disclosed to publishers who sold ads through Google’s exchange.

In the area of data access, Google has committed to the L’Autorité to devise a solution to ensure that all buyers which use Google Ad Manager to participate in its ad exchange receive equal access to data from its auctions — “to help them efficiently buy ad space from publishers”. Including when publishers use an off-platform technique called ‘Header Bidding’ (which enables publishers to run an auction among multiple ad exchanges but which, as a result of how Google operates, has meant such buyers may be at a data disadvantage vs those participating through Google’s own platform).

Google claims it is “usually not technically possible” for it to identify participants in Header Bidding auctions, and thus that it cannot share data with those buyers. But it’s now committed to address that by working “to create a solution that ensures that all buyers that a publisher works with, including those who participate in Header Bidding, can receive equal access to data related to outcomes from the Ad Manager auction”.

It notes that “in particular” it will be “providing information around the ‘minimum bid to win’ from previous auctions”, going forward — which would address one disadvantageous blind-spot for publishers taking an off-platform route to try to earn more ad revenue.

Another commitment from Google to the French watchdog is a pledge to increase flexibility for publishers using its Ad Manager product — including by letting them set custom pricing rules for ads that are in sensitive categories and implementing product changes aimed at improving interoperability between Ad Manager and third-party ad servers.

Google also writes that it is “reaffirming” that it won’t limit Ad Manager publishers from negotiating specific terms or pricing directly with other sell-side platforms (SSPs); and says it is committing to continue to provide publishers with controls to include or exclude certain buyers at their discretion when they use its product.

The third batch of commitments focus on transparency — and the opacity of adtech has long been a core criticism of the market, including for the competitive dimension as unclear workings by dominant platforms can be used to shield abusive practices from view. (Indeed, L’Autorité already fined Google $166M back in December 2019 for having what it billed then as “opaque and difficult to understand” rules for its ad platform, Google Ads, and for applying them in “an unfair and random manner.”)

On transparency, Google has pledged not to use data from other SSPs to optimize bids in its own exchange in a way that other SSPs can’t reproduce. It also says it’s reupping a promise not to share any bid from any Ad Manager auction participants with any other auction participant prior to completion of the auction.

“Additionally, we’ll give publishers at least three months’ notice for major changes requiring significant implementation effort that publishers must adopt, unless those are related to security or privacy protections, or are required by law,” it further notes.

The commitments made to L’Autorité will apply to how Google operates its adtech in the French market — but are also set to be applied more widely.

“We will be testing and developing these changes over the coming months before rolling them out more broadly, including some globally,” Gomri added in the blog post.

L’Autorité‘s action comes after years of attention paid to the online advertising market.

Back in 2018 it published a report that delved into a number of competitive advantages leveraged by Facebook and Google, noting how the duopoly’s ad targeting offerings benefit from their leadership positions in respective markers and the resultant network effects; and also from their vertical integration model (playing in both publishing and technical intermediation); as well as from the ‘logged’ environments both have developed, requiring users to log in to access ‘free’ services — giving them access to a high volume of sociodemographic and behavioral data to power their ad targeting products, among other competitive advantages.

The UK’s Competition and Markets Authority has also conducted an online ad market study in recent years — findings from which are underpinning ‘pro-competition’ regulatory reform that’s now being targeted at tech giants with ‘strategic market status’ which will, in the future, be subject to an ex ante regime of custom requirements aimed at preemptively preventing market abuse.

The European Commission has, meanwhile, issued multiple antitrust enforcements against Google’s business in recent years — including a $1.7BN fine related to its search ad brokering business, AdSense, in 2019, and a $2.7BN penalty for its price comparison service, Google Shopping, back in 2017, to name two.

More recently, the EU regulators have been reported to be further probing Google’s adtech practices. So more interventions could be forthcoming.

However the Commission’s preferred approach of not imposing specific remedies itself — nor obtaining specific commitments, beyond a general requirement not to continue the sanctioned abuse (or any equivalent behavior) — seems to have failed to move the needle, certainly where Google’s market dominance is concerned.

Still, EU lawmakers’ experience with Google antitrust cases has certainly informed a recent pan-EU plan for a set of ex ante rules to apply to digital ‘gatekeepers’ — incoming under the Digital Markets Act, which was presented by Brussels last December.

#ad-server, #adtech, #advertising-tech, #antitrust, #competition, #digital-marketing, #europe, #european-union, #france, #google, #google-shopping, #google-ad-manager, #news-showcase, #online-advertising, #texas

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Facebook’s use of ad data triggers antitrust probes in UK and EU

Facebook is facing a fresh pair of antitrust probes in Europe.

The UK’s Competition and Markets Authority (CMA) and the EU’s Competition Commission both announced formal investigations into the social media giant’s operations today — with what’s likely to have been co-ordinated timing.

The competition regulators will scrutinize how Facebook uses data from advertising customers and users of its single sign-on tool — specifically looking at whether it uses this data as an unfair lever against competitors in markets such as classified ads.

The pair also said they will seek to work closely together as their independent investigations progress.

With the UK outside the European trading bloc (post-Brexit), the national competition watchdog has a freer rein to pursue investigations that may be similar to or overlap with antitrust probes the EU is also undertaking.

And the two Facebook investigations do appear similar on the surface — with both broadly focused on how Facebook uses advertising data. (Though outcomes could of course differ.)

The danger for Facebook, here, is that a higher dimension of scrutiny will be applied to its business as a result of dual regulatory action — with the opportunity for joint working and cross-referencing of its responses (not to mention a little investigative competition between the UK and the EU’s agencies).

The CMA said it’s looking at whether Facebook has gained an unfair advantage over competitors in providing services for online classified ads and online dating through how it gathers and uses certain data.

Specifically, the UK’s regulator said it’s concerned that Facebook might have gained an unfair advantage over competitors providing services for online classified ads and online dating.

Facebook plays in both spaces of course, via Facebook Marketplace and Facebook Dating respectively.

In a statement on its action, CMA CEO, Andrea Coscelli, said: “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”

The European Commission’s investigation will — similarly — focus on whether Facebook violated the EU’s competition rules by using advertising data gathered from advertisers in order to compete with them in markets where it is active.

Although it only cites classified ads as its example of the neighbouring market of particular concern for its probe.

The EU’s probe has another element, though, as it said it’s also looking at whether Facebook ties its online classified ads service to its social network in breach of the bloc’s competition rules.

In a separate (national) action, Germany’s competition authority opened a similar probe into Facebook tying Oculus to use of a Facebook account at the end of last year. So Facebook now has multiple antitrust probes on its plate in Europe, adding to its woes from the massive states antitrust lawsuit filed against it on home turf also back in December 2020.

“When advertising their services on Facebook, companies, which also compete directly with Facebook, may provide it commercially valuable data. Facebook might then use this data in order to compete against the companies which provided it,” the Commission noted in a press release.

“This applies in particular to online classified ads providers, the platforms on which many European consumers buy and sell products. Online classified ads providers advertise their services on Facebook’s social network. At the same time, they compete with Facebook’s own online classified ads service, ‘Facebook Marketplace’.”

The Commission added that a preliminary investigation it already undertook has raised concerns Facebook is distorting the market for online classified ads services. It will now take an in-depth look in order to make a full judgement on whether the social media behemoth is breaking EU competition rules.

Commenting in a statement, EVP Margrethe Vestager, who also heads up competition policy for the bloc, added: “Facebook is used by almost 3 billion people on a monthly basis and almost 7 million firms advertise on Facebook in total. Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups. We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data. In today’s digital economy, data should not be used in ways that distort competition.”

Reached for comment on the latest European antitrust probes, Facebook sent us this statement:

“We are always developing new and better services to meet evolving demand from people who use Facebook. Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents. We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”

Up til now, Facebook has been a bit of a blind spot for the Commission’s competition authority — with multiple investigations and enforcements chalked up by the bloc against other tech giants, such as (most notably) Google and Amazon.

But Vestager’s Facebook ‘dry patch’ has now formally come to an end.

The CMA, meanwhile, is working on wider pro-competition regulatory reforms aimed squarely at tech giants like Facebook and Google under a UK plan to clip the wings of the adtech duopoly.

 

#advertising-data, #amazon, #antitrust, #big-tech, #cma, #competition-and-markets-authority, #europe, #european-commission, #european-union, #facebook, #germany, #google, #margrethe-vestager, #policy, #social, #social-media, #social-network, #united-kingdom

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EU expected to open antitrust investigation into Facebook Marketplace

EU expected to open antitrust investigation into Facebook Marketplace

Enlarge

The European Commission is on the verge of opening a formal probe of Facebook and its free Marketplace service, according to reports from Reuters and the Financial Times.

While the scope of the investigation is still being determined, the European Commission, the bloc’s executive arm, has queried Facebook and its competitors on at least three separate occasions. Those questions aimed to determine whether, in pushing Marketplace on its users, Facebook abused its market power. Given that a formal probe seems imminent, it’s likely that EC officials believe there’s a decent chance the company did.

Facebook’s Marketplace first appeared in 2016, and at the time, it was mostly viewed as a competitor to Craigslist. Conceptually, Marketplace and Craigslist are similar in that both allow people to post free, local classified advertisements. Craigslist has been slow to update its core product—superficially, it still looks like a Web 1.0 product, and it didn’t offer an official app until 2019—but Facebook’s Marketplace was mobile-friendly out of the gate and was soon prominently featured both on Facebook’s modern website and as a tab in its near-ubiquitous app.

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#antitrust, #craigslist, #european-commission, #european-union, #facebook, #policy

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DuckDuckGo presses the case for true ‘one-click’ search competition on Android

When antitrust accusations close in on Google the tech giant loves to fire back a riposte that competition is just “one click away“. It’s a disingenuous retort from an online advertising behemoth whose power and profits stem from its expertise in capturing markets by manipulating and monopolizing Internet users’ attention.

Indeed, the entire brand is arguably a dark pattern.

Behold the child-like colors! The friendly babble of syllables! The tempting freebies! The tall talk of missions and moonshots! And tucked quietly beneath that Googley exterior: The adtech giant tracking Internet users en masse to sell their attention. The business model that makes money through mass surveillance and people profiling.

Google’s ‘other bets’ have always been PR pocket change beside its ads profit machine. The fun stuff is simply how Google primes its people data pump.

So what if Google’s infamous ‘one-click competition’ claim were to actually be made true in the arena of Android search engine choice? A market where Google’s activity is being closely monitored by EU competition regulators — after a 2018 antitrust decision.

Three years ago the tech giant hit with a $5BN penalty and an order to stop using Android (aka its freebie for mobile device makers) to lock in the dominance of its own-brand search engine (and other Google services) on mobile, where its operating system is massively dominant.

It went on to adopt a so-called ‘choice screen’ on Android in the region — which prompts device users to pick a default search engine from a selection of options (Google auctions slots to rivals).

But the choice is more of a one-shot than a dynamic, ongoing possibility to switch the default for Android users — as they are only asked to choose their default choice on set up of a new device or after a factory reset.

“That means, for all practical purposes, if you want to change your default device search engine again easily, you can’t,” writes DuckDuckGo in its latest blog post pushing for reform of Google’s self-serving Android ‘remedy’.

By DDG’s count it takes 15+ clicks (not one) to switch default search engine on an Android device at any other point (i.e. after initial set up or factory reset). And it says it knows “from experience” that this over-15-clicks method “trips up almost everyone”.

“In other words, one click competition becomes in fact ‘one factory reset away’,” it goes on. “The only reasons we can think of for setting up a preference menu this way are anti-competitive ones.”

The pro-privacy search engine has been banging the drum on this point for months (if not years) at this point. Nor is it alone in complaining about Google’s remedy. And complaints aren’t limited to how hard it is to switch search engines at any other point after set-up, either.

Notably, Google’s decision to opt for a ‘pay-to-play’ model by auctioning slots on the choice screen has been widely criticized — with multiple search rivals arguing that an auction isn’t fair and does not result in a level playing field for competition (Google’s own search engine always appears as a choice, of course, and it doesn’t have to pay anyone to appear).

Not-for-profit search engine Ecosia, for example, points out that the auction format essentially discriminates against non-profit search engines, undermining the public good they may be trying to do (in its case it uses ad revenue from search to plant trees to try to help reduce global carbon emissions — so money paid to Google to win the auction means less money it can spend planting trees).

DDG has also been a critic of the paid auction model from the start. But with its latest blog post it told TechCrunch it’s trying to make sure the ‘ease of switching’ issue doesn’t get lost in criticism of the auction.

It continues to argue that multiple components need to be reformed if the choice screen is to have the pro-competition effect EU antirust regulators are seeking.

It’s increasing clear that the current implementation isn’t working for anyone other than Google — which has been able to maintain its grip on the mobile search market, almost three years after the Commission’s antitrust intervention.

Its share of the search engine market on mobile devices has not declined since 2018. Indeed, as of February it was actually up slightly on the marketshare it had when the antitrust ruling was made, per Statista data.

That can’t be what market rebalancing success looks like.

Previously when we’ve put rivals’ criticisms to the Commission it tends to offer a few stock responses — saying it’s monitoring Google’s implementation and is committed to an effective implementation of the 2018 decision — while avoiding engaging with the substance of the criticisms or specific suggestions to fix Google’s remedy.

The Commission reiterated the same lines when we contacted it now about DuckDuckGo’s call for true ‘one-click’ competition on Android by easier default search engine switching.

But there are signs EU regulators may finally be preparing to do something.

Earlier this month Bloomberg reported on comments made by antitrust chief and Commission EVP Margrethe Vestager, who said regulators are “actively working on making” Google’s Android choice screen for search and browser rivals work.

She is also reported to have said that market share “is changing a bit but we’re working on it”.

In additional comments to us, the Commission reiterated that it’s “committed to a full and effective implementation of the decision, saying: “We are therefore monitoring closely the implementation of the choice screen mechanism.”

“We have been discussing the choice screen mechanism with Google, following relevant feedback from the market, in particular in relation to the presentation and mechanics of the choice screen and to the selection mechanism of rival search providers,” it added.

DuckDuckGo declined to go into detail on any chats it’s having with EU regulators on how to reform the choice screen — saying that it can’t comment on discussions with the Commission. But founder Gabriel Weinberg pointed out other jurisdictions are eyeing how to remedy Google’s dominance, adding that “major countries are actively considering search preference menus right now”.

The US Justice Department, meanwhile, filed its antitrust lawsuit against Google last October. And US states are also challenging the tech giant in court.

“We believe a ‘choice screen’ that only appears once at start up will not meaningfully increase market competition or give consumers the freedom and simplicity they deserve to chose Google alternatives,” Weinberg also told us. “On the other hand, a properly designed preference menu gives users true one-click access to making Google competitors the default search on their device, without having to take the absurd step of factory reseting their phone.”

In its blog post, DDG has some plain words of advice for how regulators can beat Google at its own game and prevent it gaming search competition on Android.

“The sensible approach is to give users an easy pathway to the search preference menu by letting them tap a link from a search engine app or website within the default browser (e.g., Chrome). With that simple tap, the user is whisked directly to the search preference menu,” it writes.

“Not allowing competing search engines to easily guide consumers back to the search preference menu is a pretty big dark pattern because it is requiring users to make an important choice when they often aren’t ready to do so, and then not giving them the option to easily change their mind later while using a competing search engine.”

“So, to anyone considering implementing a search preference menu, or drafting regulations covering search preference menus, please ensure that consumers can access it at any time, especially after a consumer has just chosen to use a competing search engine,” it adds. “Functionality that allows competing search engines to guide consumers directly to the preference menu is necessary for consumer empowerment and search market competition.”

#android, #antitrust, #artificial-intelligence, #competition, #duckduckgo, #eu, #europe, #european-union, #gabriel-weinberg, #google, #margrethe-vestager, #mobile-device, #policy, #search-engine, #search-engines

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Google hit with $123M antitrust fine in Italy over Android Auto

Google has been fined just over €100 million (~$123M) by Italy’s antitrust watchdog for abuse of a dominant market position.

The case relates to Android Auto, a modified version of Google’s mobile OS intended for in-car use, and specifically to how Google restricted access to the platform to an electric car charging app, called JuicePass, made by energy company Enel X Italia.

Android Auto lets motorists directly access a selection of relevant apps (like maps and music streaming services) via a dash-mounted screen. But Enel X Italia’s JuicePass app was not one of the third party apps Google granted access to.

The app is accessible via the smartphone version of the Android platform — but of course a driver shouldn’t be reaching for their phone when at the wheel. So barring access through Android Auto puts a significant blocker on relevant usage.

Google’s market restriction of JuicePass has drawn the attention — and now the ire — of Italy’s competition watchdog.

The AGCM said today that Google has violated Article 102 of the Treaty on the Functioning of the European Union — and has ordered it to make the JuicePass available via the platform.

It also says Google must to provide the same interoperability with Android Auto to other third party app developers.

The authority points out that the Google Maps app, which offers some basic services for electric vehicle charging (such as finding and getting directions to charging points), is available via Android Auto — and could, in future, incorporate directly competitive features like payments.

“According to the Authority’s findings, Google did not allow Enel X Italia to develop a version of its JuicePass app compatible with Android Auto, a specific Android feature that allows apps to be used while the user is driving in compliance with safety, as well as distraction reduction, requirements,” the AGCM writes in a press release announcing the sanction [translated to English using Google Translate]. “JuicePass enables a wide range of services for recharging electric vehicles, ranging from finding a charging station to managing the charging session and reserving a place at the station; this latter function guarantees the actual availability of the infrastructure once the user reaches it.

“By refusing Enel X Italia interoperability with Android Auto, Google has unfairly limited the possibilities for end users to avail themselves of the Enel X Italia app when driving and recharging an electric vehicle. Google has consequently favored its own Google Maps app, which runs on Android Auto and enables functional services for electric vehicle charging, currently limited to finding and getting directions to reach charging points, but which in the future could include other functionalities such as reservation and payment.”

Google denies any wrongdoing and says it disagrees with the order. But it did not confirm whether or not it intends to appeal.

The tech giant claims the restrictions it places on apps’ access to Android Auto are necessary to ensure drivers are not distracted. It also told us that it has been opening up the platform to more apps over time — with “thousands” now compatible.

It added that its intention is to keep expanding availability.

Google did not comment on why Enel X Italia’s app for recharging electric vehicles was not among the “thousands” it has already granted access to, however.

Per the AGCM, Enel X Italia’s app has been excluded from Android Auto for more than two years.

Here’s Google’s statement:

“The number one priority for Android Auto is to ensure apps can be used safely while driving. That’s why we have strict guidelines on the types of apps which are currently supported and these are based on driver-distraction tests and regulatory and industry standards. Thousands of applications are already compatible with Android Auto, and our goal is to allow even more developers to make their apps available over time. For example, we have introduced templates for navigation, charging, and parking apps, open for any developer to use. We disagree with the Authority’s decision and we will review our options.”

Google has a dominant position in the market via the Android smartphone platform, with a marketshare in Italy of around three-quarters according to the competition watchdog.

Under European Union law, a finding of market dominance in one market puts a responsibility on a company not to restrict competition in any other markets where it operates — and the EU already found Google to be a dominant company in general Internet search in every market in the European Economic Area back in 2017.

The AGCM said it’s concerned about the impact of Google’s restrictions on app access to Android Auto on the growth of the electric mobility market.

“If it were to continue, [it] could permanently jeopardise Enel X Italia’s chances of building a solid user base at a time of significant growth in sales of electric vehicles,” it wrote, adding that Google’s action in excluding the JuicePass app meant it did not appear in the list of applications used by users — thereby reducing consumer choice and creating a barrier to innovation.

The authority suggests Google’s conduct could influence the development of electric mobility during a crucial phase — as recharging infrastructures for electric cars are being built out and can help fuel growth and demand for recharging services.

“Consequently, possible negative effects could occur to the diffusion of electric vehicles, to the use of ‘clean’ energy and to the transition towards a more environmentally sustainable mobility,” it warned, linking anti-competitive behavior to negative consequences for the environment.

The AGCM added that it will monitor Google’s compliance with its order to ensure it effectively and correctly implements the obligations to provide third party app developers with access to Android Auto.

The authority’s action could be a taster of what’s coming down the pipe for gatekeeper players like Google in Europe under the incoming Digital Markets Act (DMA).

The flagship legislative proposal is intended to supplement ex post competition law enforcement with ex ante rules on how dominant platforms which intermediate others’ market access can behave — including by imposing up front requirements that they support interoperability.

The idea with the DMA is to supplement the slow and painstaking work needed to bring competition investigations to fruition with proactive measures slapped on tech giants to prevent certain types of known market abuse in the first place. Although the regulation is likely years out from being adopted and applied across the EU.

In the meanwhile competition probes of big tech continue.

Italy’s AGCM opened one into Google’s ad display business last October, for example.

Google has already faced a number of EU antitrust decision in recent years — including a $5BN penalty over how it operates Android. Although search rivals continue to complain that the remedy Google devised for that 2018 decision still does not sum to fair competition.

#android, #android-auto, #antitrust, #automotive, #competition, #electric-car, #enel, #europe, #european-union, #google, #google-maps, #italy, #operating-systems, #policy, #tc

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Why Amy Klobuchar just wrote 600 pages on antitrust

A woman gestures during a presentation.

Enlarge / Sen. Amy Klobuchar (D-Minn.) (credit: Daniel Acker/Bloomberg via Getty Images)

To promote her new book, Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age, Sen. Amy Klobuchar of Minnesota gave a series of interviews this week, one of which was with me. She told me outright that our session was not her favorite of the tour—that honor went to her comedic exchange with Stephen Colbert a few days earlier, which she recounted to me line by line.

Nonetheless, I welcomed the chance to speak with her. Klobuchar has enjoyed a heightened profile since her presidential run and quick pivot to the eventual winner, Joe Biden, so she had her choice of book subjects to focus on. Ultimately, she produced 600 pages on the relatively arcane topic of antitrust law, a telling choice. Her goal is to make the subject less arcane, in hopes that a grassroots movement will support her effort to fortify and enforce the laws more vigorously. In the book, Klobuchar attempts to inspire readers with a history of the field, which in her rendering sprang from a spirited populist movement that included her own coal-mining ancestors. That’s why her book is stuffed with vintage political cartoons, typically portraying Gilded Age barons as bloated giants, hovering over workers like top-hatted Macy’s balloons. (Obviously those were the days before billionaires had Peloton.)

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#amy-klobuchar, #antitrust, #big-tech, #facebook, #google, #policy

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Europe charges Apple with antitrust breach, citing Spotify App Store complaint

The European Commission has announced that it’s issued formal antitrust charges against Apple, saying today that its preliminary view is Apple’s app store rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers.

The Commission begun investigating competition concerns related to iOS App Store (and also Apple Pay) last summer.

“The Commission takes issue with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store,” it wrote today. “The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.”

The statement of objections focuses on two rules that Apple imposes in its agreements with music streaming app developers: Namely the mandatory requirement to use its proprietary in-app purchase system (IAP) to distribute paid digital content (with the Commission noting that it charges a 30% commission fee on all such subscriptions bought via IAP); and ‘anti-steering provisions’ which limit the ability of developers to inform users of alternative purchasing options.

“The Commission’s investigation showed that most streaming providers passed this fee [Apple’s 30% cut] on to end users by raising prices,” it wrote, adding: “While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper. The Commission is concerned that users of Apple devices pay significantly higher prices for their music subscription services or they are prevented from buying certain subscriptions directly in their apps.”

Commenting in a statement, EVP and competition chief Margrethe Vestager, added: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”

Apple sent us this statement in response:

“Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store. At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”

Spotify’s founder, Daniel Ek, has also responded to the news of the Commission’s charges against Apple with a jubilant tweet — writing: “Today is a big day. Fairness is the key to competition… we are one step closer to creating a level playing field, which is so important for the entire ecosystem of European developers.”

Vestager is due to hold a press conference shortly — so stay tuned for updates.

This story is developing… 

A number of complaints against Apple’s practices have been lodged with the EU’s competition division in recent years — including by music streaming service Spotify; video games maker Epic Games; and messaging platform Telegram, to name a few of the complainants who have gone public (and been among the most vocal).

The main objection is over the (up to 30%) cut Apple takes on sales made through third parties’ apps — which critics rail against as an ‘Apple tax’ — as well as how it can mandate that developers do not inform users how to circumvent its in-app payment infrastructure, i.e. by signing up for subscriptions via their own website instead of through the App Store. Other complaints include that Apple does not allow third party app stores on iOS.

Apple, meanwhile, has argued that its App Store does not constitute a monopoly. iOS’ global market share of mobile devices is a little over 10% vs Google’s rival Android OS — which is running on the lion’s share of the world’s mobile hardware. But monopoly status depends on how a market is defined by regulators (and if you’re looking at the market for iOS apps then Apple has no competitors).

The iPhone maker also likes to point out that the vast majority of third party apps pay it no commission (as they don’t monetize via in-app payments). While it argues that restrictions on native apps are necessary to protect iOS users from threats to their security and privacy.

Last summer the European Commission said its App Store probe was focused on Apple’s mandatory requirement that app developers use its proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.

It also said it was investigating Apple Pay: Looking at the T&Cs and other conditions Apple imposes for integrating its payment solution into others’ apps and websites on iPhones and iPads, and also on limitations it imposes on others’ access to the NFC (contactless payment) functionality on iPhones for payments in stores.

The EU’s antitrust regulator also said then that it was probing allegations of “refusals of access” to Apple Pay.

In March this year the UK also joined the Apple App Store antitrust investigation fray — announcing a formal investigation into whether it has a dominant position and if it imposes unfair or anti-competitive terms on developers using its app store.

US lawmakers have, meanwhile, also been dialling up attention on app stores, plural — and on competition in digital markets more generally — calling in both Apple and Google for questioning over how they operate their respective mobile app marketplaces in recent years.

Last month, for example, the two tech giants’ representatives were pressed on whether their app stores share data with their product development teams — with lawmakers digging into complaints against Apple especially that Cupertino frequently copies others’ apps, ‘sherlocking’ their businesses by releasing native copycats (as the practice has been nicknamed).

Back in July 2020 the House Antitrust Subcommittee took testimony from Apple CEO Tim Cook himself — and went on, in a hefty report on competition in digital markets, to accuse Apple of leveraging its control of iOS and the App Store to “create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings”.

“Apple also uses its power to exploit app developers through misappropriation of competitively sensitive information and to charge app developers supra-competitive prices within the App Store,” the report went on. “Apple has maintained its dominance due to the presence of network effects, high barriers to entry, and high switching costs in the mobile operating system market.”

The report did not single Apple out — also blasting Google-owner Alphabet, Amazon and Facebook for abusing their market power. And the Justice Department went on to file suit against Google later the same month. So, over in the U.S., the stage is being set for further actions against big tech. Although what, if any, federal charges Apple could face remains to be seen.

At the same time, a number of state-level tech regulation efforts are brewing around big tech and antitrust — including a push in Arizona to relieve developers from Apple and Google’s hefty cut of app store profits.

While an antitrust bill introduced by Republican Josh Hawley earlier this month takes aim at acquisitions, proposing an outright block on big tech’s ability to carry out mergers and acquisitions. Although that bill looks unlikely to succeed, a flurry of antitrust reform bills are set to introduced as U.S. lawmakers on both sides of the aisle grapple with how to cut big tech down to a competition-friendly size.

In Europe lawmakers are already putting down draft laws with the same overarching goal.

In the EU, the Commission recently proposed an ex ante regime to prevent big tech from abusing its market power. The Digital Markets Act is set to impose conditions on intermediating platforms who are considered ‘gatekeepers’ to others’ market access.

While over in the UK, which now sits outside the bloc, the government is also drafting new laws in response to tech giants’ market power. It has said it intends to create a ‘pro-competition’ regime that will apply to platforms with so-called  ‘strategic market status’ — but instead of a set list of requirements it wants to target specific measures per platform.

#alphabet, #android, #antitrust, #app-store, #apple, #apple-inc, #apple-pay, #competition, #digital-markets, #epic-games, #europe, #european-commission, #european-union, #google, #ios, #ios-app-store, #ipad, #iphone, #lawsuit, #margrethe-vestager, #mobile-devices, #operating-system, #policy, #spotify, #tc, #tim-cook

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EU to charge Apple with anticompetitive behavior this week

EU to charge Apple with anticompetitive behavior this week

Enlarge (credit: SOPA Images | Getty)

Margrethe Vestager, the EU’s competition chief, will later this week issue charges against Apple stating that its App Store rules break EU law, according to several people with direct knowledge of the situation.

The charges relate to a complaint brought two years ago by Spotify, the music streaming app, that Apple takes 30 percent commission to distribute apps through its iPhone App Store and forbids apps from directing users to pay for subscriptions elsewhere.

Brussels opened an official competition investigation in June, when Vestager said Apple appeared to be a so-called gatekeeper “when it comes to the distribution of apps and content to users of Apple’s popular devices.”

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#antitrust, #app-store, #apple, #eu, #ios, #iphone, #policy, #tech

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Why lawmakers are so interested in Apple’s and Google’s “rents”

Maybe this textbook is from the Ma Bell era? #ThanksStockGettyImages

Enlarge / Maybe this textbook is from the Ma Bell era? #ThanksStockGettyImages (credit: designer491 / Getty Images)

Josh Hawley had some questions about how Apple came up with the money to buy back $58 billion in stock over the past year.

“I just want to focus on one major source of that income,” the Republican senator said to Apple’s lawyer. “It’s not innovation, it’s not research and development. It’s the monopoly rents that you collect out of your app store.”

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#antitrust, #app-store, #apple, #congress, #google, #policy, #tech

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Republicans and Democrats increasingly agree: Big Tech is too powerful

Sen. Roger Wicker (R-MS) and Sen. Ted Cruz (R-TX) are shown at a 2019 hearing. Both senators harshly criticized big technology companies at the 2021 confirmation hearing for Lina Khan to serve on the Federal Trade Commission.

Enlarge / Sen. Roger Wicker (R-MS) and Sen. Ted Cruz (R-TX) are shown at a 2019 hearing. Both senators harshly criticized big technology companies at the 2021 confirmation hearing for Lina Khan to serve on the Federal Trade Commission. (credit: Drew Angerer/Getty Images)

When President Joe Biden chose Lina Khan for one of the Federal Trade Commission’s five seats, it was an ominous sign for the nation’s largest technology companies. While still a law student, Khan made her academic career penning “Amazon’s Antitrust Paradox,” a scholarly 2017 treatise arguing for a tougher approach to regulating the Seattle behemoth.

Prior to law school, Khan worked for Barry Lynn, a scholar who was fired from the centrist New America Foundation over his aggressive criticism of Google, a major New America funder. After law school, Khan worked as the legal director of Lynn’s new organization, the Open Markets Institute.

So if we can expect anyone to push the Federal Trade Commission to enforce antitrust laws more aggressively against big technology companies, it would be Khan. The choice of Khan could also signal that the Biden administration more broadly will take a confrontational posture toward Big Tech.

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#antitrust, #ftc, #lina-khan, #policy

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Lina Khan’s timely tech skepticism makes for a refreshingly friendly FTC confirmation hearing

One never knows how a confirmation hearing will go these days, especially one for a young outsider nominated to an important position despite challenging the status quo and big business. Lina Khan, just such a person up for the position of FTC Commissioner, had a surprisingly pleasant time of it during today’s Senate Commerce Committee confirmation hearing — possibly because her iconoclastic approach to antitrust makes for good politics these days.

Khan, an associate professor of law at Columbia, is best known in the tech community for her incisive essay “Amazon Antitrust’s Paradox,” which laid out the failings of regulatory doctrine that have allowed the retail giant to progressively dominate more and more markets. (She also recently contributed to a House report on tech policy.)

When it was published, in 2018, the feeling that Amazon had begun to abuse its position was, though commonplace in some circles, not really popular in the Capitol. But the growing sense that laissez-faire or insufficient regulations have created monsters in Amazon, Google, and Facebook (to start) has led to a rare bipartisan agreement that we must find some way, any way will do, of putting these upstart corporations back in their place.

This in turn led to a sense of shared purpose and camaraderie in the confirmation hearing, which was a triple header: Khan joined Bill Nelson, nominated to lead NASA, and Leslie Kiernan, who would join the Commerce Department as General Counsel, for a really nice little three-hour chat.

Khan is one of several in the Biden administration who signal a new approach to taking on Big Tech and other businesses that have gotten out of hand, and the questions posed to her by Senators from both sides of the aisle seemed genuine and got genuinely satisfactory answers from a confident Khan.

She deftly avoided a few attempts to bait her — including one involving Section 230; wrong Commission, Senator — and her answers primarily reaffirmed her professional opinion that the FTC should be better informed and more preemptive in its approach to regulating these secretive, powerful corporations.

Here are a few snippets representative of the questioning and indicative of her positions on a few major issues (answers lightly edited for clarity):

On the FTC getting involved in the fight between Google, Facebook, and news providers:

“Everything needs to be on the table. Obviously local journalism is in crisis, and i think the current COVID moment has really underscored the deep democratic emergency that is resulting when we don’t have reliable sources of local news.”

She also cited the increasing concentration of ad markets and the arbitrary nature of, for example, algorithm changes that can have wide-ranging effects on entire industries.

Lina Khan, commissioner of the Federal Trade Commission (FTC) nominee for U.S. President Joe Biden, speaks during a Senate Commerce, Science and Transportation Committee confirmation hearing in Washington, D.C.

Image Credits: Graeme Jennings/Washington Examiner/Bloomberg / Getty Images

On Clarence Thomas’s troubling suggestion that social media companies should be considered “common carriers”:

“I think it prompted a lot of interesting discussion,” she said, very diplomatically. “In the Amazon article, I identified two potential pathways forward when thinking about these dominant digital platforms. One is enforcing competition laws and ensuring that these markets are competitive.” (i.e. using antitrust rules)

“The other is, if we instead recognize that perhaps there are certain economies of scale, network externalities that will lead these markets to stay dominated by a very few number of companies, then we need to apply a different set of rules. We have a long legal tradition of thinking about what types of checks can be applied when there’s a lot of concentration and common carriage is one of those tools.”

“I should clarify that some of these firms are now integrated in so many markets that you may reach for a different set of tools depending on which specific market you’re looking at.”

 

(This was a very polite way of saying common carriage and existing antitrust rules are totally unsuitable for the job.)

On potentially reviewing past mergers the FTC approved:

“The resources of the commission have not really kept pace with the increasing size of the economy, as well as the increasing size and complexity of the deals the commission is reviewing.”

“There was an assumption that digital markets in particular are fast moving so we don’t need to be concerned about potential concentration in the markets, because any exercise of power will get disciplined by entry and new competition. Now of course we know that in the markets you actually have significant network externalities in ways that make them more sticky. In hindsight there’s a growing sense that those merger reviews were a missed opportunity.”

(Here Senator Blackburn (R-TN) in one of the few negative moments fretted about Khan’s “lack of experience in coming to that position” before asking about a spectrum plan — wrong Commission, Senator.)

On the difficulty of enforcing something like an order against Facebook:

“One of the challenges is the deep information asymmetry that exists between some of these firms and enforcers and regulators. I think it’s clear that in some instances the agencies have been a little slow to catch up to the underlying business realities and the empirical realities of how these markets work. So at the very least ensuring the agencies are doing everything they can to keep pace is gonna be important.”

“In social media we have these black box algorithms, proprietary algorithms that can sometimes make it difficult to know what’s really going on. The FTC needs to be using its information gathering capacities to mitigate some of these gaps.”

On extending protections for children and other vulnerable groups online:

Some of these dangers are heightened given some of the ways in which the pandemic has rendered families and children especially dependent on some of these [education] technologies. So I think we need to be especially vigilant here. The previous rules should be the floor, not the ceiling.


Overall there was little partisan bickering and a lot of feeling from both sides that Khan was, if not technically experienced at the job (not rare with a coveted position like FTC Commissioner), about as competent a nominee as anyone could ask for. Not only that but her highly considered and fairly assertive positions on matters of antitrust and competition could help put Amazon and Google, already in the regulatory doghouse, on the defensive for once.

#amazon, #antitrust, #facebook, #ftc, #google, #government, #lina-khan, #tc

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Republican antitrust bill would block all big tech acquisitions

There are about to be a lot of antitrust bills taking aim at big tech, and here’s one more. Senator Josh Hawley (R-MO) rolled out a new bill this week that would take some severe measures to rein in big tech’s power, blocking mergers and acquisitions outright.

The “Trust-Busting for the Twenty-First Century Act” would ban any acquisitions by companies with a market cap of more than $100 billion, including vertical mergers. The bill also proposes changes that would dramatically heighten the financial pain for companies caught engaging in anti-competitive behavior, forcing any company that loses an antirust suit to forfeit profits made through those business practices.

At its core, Hawley’s legislation would snip some of the red tape around antitrust enforcement by amending the Sherman Act, which made monopolies illegal, and the Clayton Act, which expanded the scope of illegal anti-competitive behavior. The idea is to make it easier for the FTC and other regulators to deem a company’s behavior anti-competitive — a key criticism of the outdated antitrust rules that haven’t kept pace with the realities of the tech industry.

The bill isn’t likely to get too far in a Democratic Senate, but it’s not insignificant. Sen. Amy Klobuchar (D-MN), who chairs the Senate’s antitrust subcommittee, proposed legislation earlier this year that would also create barriers for dominant companies with a habit of scooping up their competitors. Klobuchar’s own ideas for curtailing big tech’s power similarly focus on reforming the antitrust laws that have shaped U.S. business for more than a century.

Click to access The%20Trust-Busting%20for%20the%20Twenty-First%20Century%20Act.pdf

The Republican bill may have some overlap with Democratic proposals, but it still hits some familiar notes from the Trump era of hyper-partisan big tech criticism. Hawley slams “woke mega-corporations” in Silicon Valley for exercising too much power over the information and products that Americans consume. While Democrats naturally don’t share that critique, Hawley’s bill makes it clear that antitrust reform targeting big tech is one policy era where both political parties could align on the ends, even if they don’t see eye to eye on the why.

Hawley’s bill is the latest, but it won’t be the last. Rep. David Cicilline (D-RI), who spearheads tech antitrust efforts in the House, previously announce his own plans to introduce a flurry of antitrust reform bills rather than one sweeping piece of legislation. Those bills, which will be more narrowly targeted to make them difficult for tech lobbyists to defeat, are due out in May.

#amy-klobuchar, #antitrust, #big-tech, #competition-law, #federal-trade-commission, #government, #josh-hawley, #senate, #tc, #the-battle-over-big-tech, #trump, #united-states

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Apple and Google will both attend Senate hearing on app store competition

After it looked like Apple might no-show, the company has committed to sending a representative to a Senate antitrust hearing on app store competition later this month.

Last week, Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) put public pressure on the company to attend the hearing, which will be held by the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. Klobuchar chairs that subcommittee, and has turned her focus toward antitrust worries about the tech industry’s most dominant players.

The hearing, which Google will also attend, will delve into Apple and Google’s control over “the cost, distribution, and availability of mobile applications on consumers, app developers, and competition.”

App stores are one corner of tech that looks the most like a duopoly, a perception that Apple’s high profile battle with Fortnite-maker Epic is only elevating. Meanwhile, with a number of state-level tech regulation efforts brewing, Arizona is looking to relieve developers from Apple and Google’s hefty cut of app store profits.

In a letter last week, Klobuchar and Lee, the subcommittee’s ranking member, accused Apple of “abruptly” deciding that it wouldn’t send a witness to the hearing, which is set for April 21.

“Apple’s sudden change in course to refuse to provide a witness to testify before the Subcommittee on app store competition issues in April, when the company is clearly willing to discuss them in other public forums, is unacceptable,” the lawmakers wrote.

By Monday, that pressure had apparently done its work, with Apple agreeing to attend the hearing. Apple didn’t respond to a request for comment.

While the lawmakers are counting Apple’s acquiescence as a win, that doesn’t mean they’ll be sending their chief executive. Major tech CEOs have been called before Congress more often over the last few years, but those appearances might have diminishing returns.

Tech CEOs, Apple’s Tim Cook included, are thoroughly trained in the art of saying little when pressed by lawmakers. Dragging in a CEO might work as a show of force, but tech execs generally reveal little over the course of their lengthy testimonies, particularly when a hearing isn’t accompanied by a deeper investigation.

#antitrust, #apple, #google, #government, #senate, #tc, #the-battle-over-big-tech

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Equity Monday: Microsoft buys Nuance, Uber isn’t dead, and Austin has a new unicorn

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here. It is good to be back!

There was a lot to get through, so, in order that we discussed the topics on the show, here’s our rundown:

Don’t forget that Coinbase is listing this week, yeah? Chat soon!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

#africa, #alibaba, #antitrust, #darktrace, #equity-podcast, #fundings-exits, #india, #microsoft, #nuance-communications, #startups, #the-zebra, #tiger-global, #uber

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Apple, Epic Games lay out detailed arguments for upcoming legal battle

<em>Fortnite</em> seen in the App Store on an iPhone on May 10, 2018.

Enlarge / Fortnite seen in the App Store on an iPhone on May 10, 2018. (credit: Andrew Harrer | Bloomberg | Getty Images)

With Epic Games and Apple set to face off before a judge in their high-profile trial in just a few weeks, new court filings from both companies outline the evidence and arguments each intends to make in detail.

Unsurprisingly, each document paints a radically different picture of Apple’s App Store and its role in the gaming and technology industry.

The disagreement between the two companies escalated publicly when Epic attempted to implement its own in-app payments system in Fortnite, one of the most popular games on Apple’s App Store. This set into motion a series of events that led to Apple removing Fortnite from the App Store as Epic ran a social media campaign around the hashtag “#SaveFortnite,” leveraging angry gamers against the tech giant.

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#antitrust, #app-store, #apple, #apple-app-store, #epic-games, #fortnite, #ios, #tech

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FTC urges courts not to dismiss Facebook antitrust case

Facebook CEO Mark Zuckerberg.

Enlarge / Facebook CEO Mark Zuckerberg. (credit: Chip Somodevilla/Getty Images)

The Federal Trade Commission on Wednesday urged a federal judge in DC to reject Facebook’s request to dismiss the FTC’s high-stakes antitrust lawsuit. In a 56-page legal brief, the FTC reiterated its arguments that Facebook’s profits have come from years of anticompetitive conduct.

“Facebook is one of the largest and most profitable companies in the history of the world,” the FTC wrote. “Facebook reaps massive profits from its [social networking] monopoly, not by offering a superior or more innovative product because it has, for nearly a decade, taken anticompetitive actions to neutralize, hinder, or deter would-be competitors.”

The FTC’s case against Facebook focuses on two blockbuster acquisitions that Facebook made early in the last decade. In 2012, Facebook paid $1 billion for the fast-growing startup Instagram. While Instagram the company was still tiny—it had only about a dozen employees at the time of the acquisition—it had millions of users and was growing rapidly. Mark Zuckerberg realized it could grow into a serious rival for Facebook, and the FTC alleges Zuckerberg bought the company to prevent that from happening.

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#antitrust, #facebook, #ftc, #policy

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Amazon colluded with publishers to fix book prices, class-action suit alleges

Amazon colluded with publishers to fix book prices, class-action suit alleges

Enlarge (credit: Johner Images / Getty)

A small independent bookstore filed a class-action lawsuit against Amazon last week, alleging that the e-commerce giant colluded with the five major book publishers to fix wholesale prices and block other sellers “from competing on price or product availability.”

The suit seeks to compensate independent booksellers for Amazon’s and publishers’ practices and put an injunction on the alleged anticompetitive practices. The named plaintiff is Bookends and Beginnings, a physical and online bookstore located in Evanston, Illinois, just north of Chicago. Amazon, which got its start selling books during the dot-com boom, has dominated the retail book market in recent years, selling an estimated 90 percent of all e-books and over 40 percent of physical books.

The current lawsuit targets Amazon’s practices in the market for physical trade books, which is publishing industry lingo for fiction and nonfiction books that are not textbooks or other reference materials.

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#amazon, #antitrust, #book-publishers, #books, #policy, #price-fixing

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UK’s antitrust watchdog takes a closer look at Facebook-Giphy

Potential threats to the free flow of GIFs continue to trouble the UK’s competition watchdog.

Facebook’s $400M purchase of Giphy, announced last year, is now facing an in-depth probe by the CMA after the regulator found the acquisition raises competition concerns related to digital advertising. It now has until September 15 to investigate and report.

The watchdog took a first look at the deal last summer. It kept on looking into 2021. And then last week the CMA laid out its concerns — saying the (already completed) Facebook-Giphy acquisition could further reduce competition in the digital advertising market where the former is already a kingpin player (with over 50% share of the display advertising market).

The regulator said it had found evidence that, prior to the acquisition, Giphy had planned to expand its own digital advertising partnerships to other countries, including the UK.

“If Giphy and Facebook remain merged, Giphy could have less incentive to expand its digital advertising, leading to a loss of potential competition in this market,” it wrote a week ago.

The CMA also said it was worried a Facebook-owned Giphy could harm social media rivals were the tech giant were to squeeze the supply of animated pixels to others — or require rivals to sign up to worse terms (such as forcing them to hand over user data which it might then use to further fuel its ad targeting engines, gaining yet more market power).

On March 25 the companies were given five days by the regulator to address its concerns — by offering legally binding proposals intended to allay concerns.

An in-depth ‘phase 2’ investigation could have been avoided if concessions were offered which were acceptable to the regulator but that is evidently not the case as the CMA has announced the phase 2 referral today. And given the announcement has come just five working days after the last notification it appears no concessions were offered.

We’ve reached out to Facebook and the CMA for comment.

A Facebook spokesperson said: “We will continue to fully cooperate with the CMA’s investigation. This merger is good for competition and in the interests of everyone in the UK who uses Giphy and our services — from developers to service providers to content creators.”

While Facebook has already completed its acquisition of Giphy, the CMA’s investigation continues to put a freeze on its ability to integrate Giphy more deeply into its wider business empire.

Albeit, given Facebook’s dominant position in the digital advertising space, its business need to move fast via product innovation is a lot less pressing than years past — when it was building its market dominance free from regulatory intervention.

In recent years, the CMA has been paying close mind to the digital ad market. Back in 2019 it reported report substantial concerns over the power of the adtech duopoly, Google and Facebook. Although in its final report it said it would wait for the government to legislate, rather than make an intervention to address market power imbalances itself.

The UK is now in the process of setting up a pro-competition regulator with a dedicated focus on big tech — in response to concerns about the ‘winner takes all’ dynamics seen in digital markets. This incoming Digital Market Unit will oversee a “pro-competition” regime for Internet platforms that will see fresh compliance requirements in the coming years.

In the meanwhile, the CMA continues to scrutinize tech deals and strategic changes — including recently opening a probe of Google’s plan to depreciate support for third party cookies in Chrome after complaints from other industry players.

In January it also announced it was taking a look at Uber’s plan to acquire Autocab. However on Monday it cleared that deal, finding only “limited indirect” competition between the pair, and not finding evidence to indicate Autocab was likely to become a significant and more direct competitor to Uber in the future.

The regulator also considered whether Autocab and Uber could seek to put Autocab’s taxi company customers that compete against Uber at a disadvantage by reducing the quality of the booking and dispatch software sold to them, or by forcing them to pass data to Uber. But its phase 1 probe found other credible software suppliers and referral networks that the CMA said these taxi companies could switch to if Uber were to act in such a way — leading to it to clear the deal.

#advertising-tech, #antitrust, #competition-and-markets-authority, #digital-advertising, #europe, #facebook, #giphy, #privacy, #social, #united-kingdom

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Breaking up big tech would be a mistake

It seems safe to say that our honeymoon with big tech is officially over.

After years of questionable data-handling procedures, arbitrary content management policies and outright anti-competitive practices, it is only fair that we take a moment to rethink our relationship with the industry.

Sadly, most of the ideas that have gathered mainstream attention — such as the calls to break up big tech — have been knee-jerk responses that smack more of retributionist fantasies than sound economic thinking.

Instead of chasing sensationalist non-starters and zero-sum solutions, we should be focused on ensuring that big tech grows better as it grows bigger by establishing a level playing field for startups’ and competitors’ proprietary digital markets.

We can find inspiration on how to do just that by taking a look at how 20th-century lawmakers reined in the railroad monopolies, which similarly turned from darlings of industry to destructive forces of stagnation.

We’ve been here before

More than a century ago, a familiar story of a nation coming to terms with the unanticipated effects of technological disruption was unfolding across a rapidly industrializing United States.

While the first full-scale steam locomotive debuted in 1804, it took until 1868 for more powerful and cargo-friendly American-style locomotives to be introduced.

The more efficient and cargo-friendly locomotives caught on like wildfire, and soon steel and iron pierced through mountains and leaped over gushing rivers to connect Americans from coast to coast.

Soon, railroad mileage tripled and a whopping 77% of all intercity traffic and 98% of passenger business would be running on rails, ushering in an era of cost-efficient transcontinental travel that would recast the economic fortunes of the entire country.

As is often the case with disruptive technologies, early success would come with a heavy human cost.

From the very beginning, abuse and exploitation ran rampant in the railroad industry, with up to 3% of the labor force suffering injuries or dying during the course of an average year.

Railroad trust owners soon became key constituents of the widely maligned group of businessmen colloquially known as robber barons, whose corporations devoured everything in their path and made life difficult for competitors and new entrants in particular.

The railroad proprietors achieved this by maintaining carefully constructed walled gardens, allowing them to run competitors into the ground by means of extortion, exclusion and everything in between.

While these methods proved wildly successful for railroad owners, the rest of society languished under stifled competition and an utter lack of concern for consumers’ interests.

Everything old is new again

Learning from past experiences certainly doesn’t seem to be humankind’s strong suit.

In fact, most of our concerns with the tech industry are mirror images of the objections 20th-century Americans had against the railroad trusts.

Similar to the robber barons, Alphabet, Amazon, Apple, Facebook, Twitter, et al., have come to dominate the major thoroughfares of trade in a fashion that leaves little space for competitors and startups.

By instating double-digit platform fees, establishing strict limitations on payment processing protocols, and jealously hoarding proprietary data and APIs, big tech has erected artificial barriers to entry that make replicating their success all but impossible.

Over the past years, tech giants have also taken to cannibalizing third-party solutions by providing private-label versions — à la AmazonBasics — to the point where big tech’s clients are finding themselves undercut and outplayed by the platform-holders themselves.

Given the above, it is not surprising that the pace at which tech startups are created in the US has been declining for years.

In fact, VC veterans such as Albert Wenger have called attention to the “kill zone” around big tech for years, and if we are to reinvigorate the competitive fringe around our large tech conglomerates, something has to be done fast.

Why we need to stop talking about breaking up big tech

The 20th-century playbook for taming monopolistic railroad trusts offers several helpful lessons for dealing with big tech.

For first steps, Congress created the Interstate Commerce Commission (ICC) in 1887 and tasked it with administering reasonable and just rates for access to proprietary railroad networks.

Due to partisan politicking, the ICC proved relatively toothless, however. It wasn’t until Congress passed the 1906 Hepburn Act, which separated the function of transportation from the ownership of the goods being shipped, that we started seeing true progress.

By disallowing self-dealing and double-dipping in proprietary platforms, Congress succeeded in opening up access on equal terms both to existing competitors and startups alike, making a once-unnavigable thicket of exploitative practices into the metallic backbone of American prosperity that we know today.

This could never have been achieved by simply breaking the railroad trusts into smaller pieces.

In fact, when it comes to platforms and networks, bigger often is better for everyone involved thanks to network effects and several other factors that conspire against smaller platforms.

Most importantly, when access and interoperability rules are done right, bigger platforms can sustain wider and wider constellations of startups and third parties, helping us grow our economic pie instead of shrinking it.

Making digital markets work for startups

In our post-pandemic economy, our attention should be in helping tech platforms grow better as they grow bigger instead of cutting them down to size.

Ensuring that startups and competitors can access these platforms on equitable terms and at fair prices is a necessary first step.

There are numerous other tangible actions policymakers can take today. For example, rewriting the rules on data portability, pushing for wider standardization and interoperability across platforms, and reintroducing net neutrality would go a long way in addressing what ails the industry today.

With President Joe Biden’s recent nod toward “Amazon’s Antitrust Antagonist” Lina Khan as the next commissioner of the Federal Trade Commission, these changes suddenly seem more likely than ever.

In the end, all of us would stand to benefit from a robust fringe of startups and competitors that thrive on the shoulders of giants and the platforms they have made.

#antitrust, #column, #congress, #federal-trade-commission, #opinion, #policy, #private-equity, #startup-company, #technology

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Facebook asks judge to toss antitrust suits, claiming no consumer harm

Extreme close-up image of Facebook and Instagram icons on a smartphone screen.

Enlarge / Just two of the many apps Facebook owns and operates. (credit: Tom Weller | DeFodi Images | Getty Images)

Facebook is asking a federal judge to dismiss landmark antitrust suits against the company, arguing that its “innovative free products deliver value” to consumers and that there’s no evidence it behaved anticompetitively or broke the law.

The Federal Trade Commission and almost every state in the country filed a pair of lawsuits in December arguing that Facebook abused its market power when it acquired rival firms, most notably WhatsApp and Instagram, and thus prevented competitors from presenting a more privacy-conscious alternative to consumers.

“Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition,” FTC Bureau of Competition Director Ian Conner said at the time. “Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

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#antitrust, #facebook, #lawsuits, #policy

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Why Big Tech is facing regulatory threats from Australia to Arizona

Why Big Tech is facing regulatory threats from Australia to Arizona

Enlarge (credit: Jackie Niam | Getty Images)

Last week, Arizona’s House of Representatives approved legislation to prohibit platform owners like Apple and Google from locking app makers into their own payment systems. The bill passed only narrowly, and it must be approved by the Arizona Senate and Gov. Doug Ducey before it can become law. But regardless of the bill’s ultimate fate, the vote is the latest sign of a dramatic shift in public attitudes toward Silicon Valley’s most powerful companies.

For the first two decades of the Internet era, there was a broad consensus that politicians shouldn’t tie Silicon Valley companies down with burdensome rules and regulations. Companies like Apple, Amazon, Google, and Uber were widely admired. In 2007, presidential candidates from both parties made pilgrimages to associate themselves with Google. In 2015, Jeb Bush, Ted Cruz, and other Republican hopefuls tripped over each other to position themselves as the most Uber-friendly candidate.

Tech companies’ prestige bolstered their political power. Those who proposed regulations to rein in tech companies—or in some cases just wanted to subject them to the same rules as other companies—were often dismissed as out-of-touch reactionaries and enemies of progress.

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#antitrust, #arizona, #australia, #big-tech, #policy, #uncategorized

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Lawmakers want to empower publishers to collectively negotiate with Facebook

On the heels of a heated standoff between platforms and publishers in Australia, U.S. lawmakers reintroduced a piece of legislation that would allow the news industry to collectively negotiate content deals with tech companies.

The Journalism Competition and Preservation Act is sponsored in the Senate by Amy Klobuchar (D-MN) and John Kennedy (R-LA) and in the House by David Cicilline (D-RI), Ken Buck (R-NY) and Mark DeSaulnier (D-CA.). The legislation was first introduced in 2019, but the bipartisan cluster of lawmakers hope to breathe new life into it during the Biden era.

The bill would create an exemption from existing antitrust laws that would allow news organizations to collectively negotiate favorable terms with tech companies like Facebook and Google. That special treatment would open a 48-month window for publishers, in theory boosting their leverage to better the industry as a whole.

The U.S. isn’t the only country grappling with tech platforms’ publishing dominance. Last month, Facebook dramatically pulled links to news content in Australia as it pushed back against new regulations that could force tech platforms to pay for more content. Specifically, Facebook objected to a final arbitration clause that would set the price for news automatically if tech platforms and news publishers couldn’t agree on terms.

“We must enable news organizations to negotiate on a level playing field with the big tech companies if we want to preserve a strong and independent press,” Sen. Klobuchar said of the bill, which she argues would give publishers a “fighting chance” in dealing with tech platforms.

“A strong, diverse, free press is critical for any successful democracy,” Rep. Cicilline said. “Access to trustworthy local journalism helps inform the public, hold powerful people accountable, and root out corruption.”

Both Cicilline and Klobuchar sit in powerful positions, chairing the House and Senate’s respective antitrust subcommittees. In the coming months, those committees will play a major role in shaping legislative proposals that could rein in big tech’s many excesses. Balancing the power of colossal tech platforms against the priorities of a shrinking news industry is just one piece of that puzzle.

#antitrust, #congress, #facebook, #government, #media, #news-media, #publishers, #tc

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White House reportedly plans to name Amazon foe Lina Khan to FTC

A young woman poses for a photo in a spartan apartment.

Enlarge / Lina Khan, as photographed for a 2017 profile in The Washington Post. (credit: An Rong Xu | The Washington Post | Getty Images)

US President Joe Biden is reportedly planning to nominate antitrust scholar Lina Khan to the Federal Trade Commission, a move that would indicate his administration is open to aggressive antitrust regulation not only generally but specifically against Amazon and other Big Tech firms.

The Washington rumor mill has been floating Khan’s name as a possible candidate for the commission ever since Biden won the election, and Politico reported today that the White House is indeed planning to tap her for the role, which requires Senate confirmation. At present, Khan is an associate law professor at Columbia Law School.

Khan vaulted directly to antitrust superstardom in 2017 while she was still a law student, when she published her blockbuster paper “Amazon’s Antitrust Paradox” in the Yale Law Journal.

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#antitrust, #federal-trade-commission, #ftc, #lina-khan, #policy

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White House signals coming antitrust push with Tim Wu appointment

The White House South Lawn, which is unfortunately not the view most folks working for a presidential administration have.

Enlarge / The White House South Lawn, which is unfortunately not the view most folks working for a presidential administration have. (credit: Joe Daniel Price | Getty Images)

Longtime tech critic Tim Wu is joining the Biden administration as an adviser on technology and competition, a signal that the White House is likely to push for policies that rein in Big Tech.

Wu will be serving on the National Economic Council as special assistant to the president for technology and competition policy, the White House said this morning. Wu confirmed the news in a tweet.

Wu is best known in tech circles as the man who coined the term “net neutrality” in the early 2000s. He has held several positions at the federal level before, including advisory roles with both the Federal Trade Commission and the National Economic Council. He has also been a full professor at Columbia University law school since 2006, where he teaches First Amendment and antitrust law.

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#antitrust, #biden-administration, #policy, #tim-wu, #white-house

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Apple’s App Store is now also under antitrust scrutiny in the UK

Apple is facing another antitrust investigation in Europe into how it operates the iOS App Store.

The UK’s Competition and Markets Authority (CMA) announced today that it’s opened an investigation following a number of complaints from developers alleging unfair terms and as a result of its own work in the digital sector.

“The CMA’s investigation will consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK — and, if so, whether Apple imposes unfair or anti-competitive terms on developers using the App Store, ultimately resulting in users having less choice or paying higher prices for apps and add-ons,” it wrote in a press release.

“This is only the beginning of the investigation and no decision has yet been made on whether Apple is breaking the law,” it added.

In a statement, Andrea Coscelli, chief executive of the CMA, added: “Millions of us use apps every day to check the weather, play a game or order a takeaway. So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice — potentially causing customers to lose out when buying and using apps – warrant careful scrutiny.”

An Apple spokesperson sent this statement in response to the CMA action:

We created the App Store to be a safe and trusted place for customers to download the apps they love and a great business opportunity for developers everywhere. In the UK alone, the iOS app economy supports hundreds of thousands of jobs, and any developer with a great idea is able to reach Apple customers around the world.

We believe in thriving and competitive markets where any great idea can flourish. The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent. We look forward to working with the UK Competition and Markets Authority to explain how our guidelines for privacy, security and content have made the App Store a trusted marketplace for both consumers and developers.

The European Union already has an open antitrust investigation into a number of elements of Apple’s business — after announcing a probe of the App Store and Apple’s payment offering, Apple Pay, last summer.

US lawmakers have also been questioning Apple as part of a major antitrust probe into big tech. And a bill has just advanced in Arizona that aims to force both Apple and Google to allow third party payment options in their smartphone stores.

The EU’s Apple investigation, meanwhile, remains ongoing.

The video games publisher Epic Games — which has been engaged in a vicious public battle with Apple over what it decries as Cupertino’s unfair ‘tax’ on developers — recently sought to join the EU’s case by filing a complaint with the European Commission last month.

Epic also previously filed the same complaint in the UK — so is one of the developers the CMA cites.

With the UK now outside the bloc (post-Brexit), the CMA looks set to take on a more prominent role as a regional regulator. It’s now free to investigate the same issues as the Commission (whereas under EU rules national regulators are supposed to avoid duplicating effort).

If it can move faster than the bloc’s competition commission it may have the opportunity to mould the standards that apply to tech giants. Although the CMA said today that it “continues to coordinate closely” with the Commission and other agencies to tackle what it described as “global concerns”.

Last fall the UK announced a plan to establish a pro-competition regulation regime aimed at tackling the market power of big tech — following a major market study of online platforms and digital advertising carried out by the CMA. The regulator published its advice to the government on shaping that regime in December.

“As the CMA works with the Government on these proposals – which will complement its current enforcement powers – the CMA will continue to use its existing powers to their fullest extent in order to protect competition in these areas,” it said today.

“Our ongoing examination into digital markets has already uncovered some worrying trends. We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked. That’s why we’re pressing on with setting up the new Digital Markets Unit and launching new investigations wherever we have grounds to do so,” Coscelli added.

In other recent actions scrutinizing tech giants, the CMA has opened an investigation into Google’s plan to phase out third party tracking cookies and launched an inquiry into Uber’s planned acquisition of UK SaaS maker Autocab.

 

#antitrust, #app-store, #apple, #cma, #competition, #platform-regulation, #tc, #uk

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Fortnite fight expands as Epic claims Apple broke EU competition law

<em>Fortnite</em> on an iPhone... back when that was a thing.

Enlarge / Fortnite on an iPhone… back when that was a thing. (credit: Savusia Konstantin | Getty Images)

Epic Games, maker of Fortnite, is loading up a new map in its ongoing fight against Apple as it files an antitrust complaint against the mobile phone maker in the European Union.

Epic alleges in its complaint that Apple uses its sole control over iOS apps to block competitors and benefit itself at developers’ expense in violation of European competition law, the company said today.

“What’s at stake here is the very future of mobile platforms,” Epic CEO Tim Sweeney said in a written statement. “We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field. It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”

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#antitrust, #apple, #complaints, #epic, #epic-games, #eu, #european-union, #policy

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Epic Games takes its Apple App Store fight to Europe

Epic Games has taken its fight against Apple’s App Store rules to the European Union where it’s lodged a complaint with the bloc’s antitrust regulators.

In a blog post today the maker of the popular online game Fortnite said it’s extending its battle for what it dubbed “fairer digital platform practices for developers and consumers” to Europe, noting the bloc is already looking into competition concerns attached to the Apple App Store (and its payment service, Apple Pay).

The EU opened a formal probe into certain Apple practices last year.

Regional lawmakers have also recently set out a plan to expand platform regulation to put specific strictures on ‘gatekeeper’ platforms with the aim of ensuring fairness and accountability vis-a-vis third parties. And the issue of platform power is certainly one that’s now under close scrutiny by regulators and lawmakers around the world.

“The complaint, filed with the European Commission’s Directorate-General for Competition, alleges that through a series of carefully designed anti-competitive restrictions, Apple has not just harmed but completely eliminated competition in app distribution and payment processes,” Epic writes, adding: “Apple uses its control of the iOS ecosystem to benefit itself while blocking competitors and its conduct is an abuse of a dominant position and in breach of EU competition law.”

It’s not seeking damages against Apple but wants EU competition authorities to impose remedies against what it describes as the iPhone maker’s “monopoly channels”.

“What’s at stake here is the very future of mobile platforms,” said Epic Games founder and CEO, Tim Sweeney, in a statement. “Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace. We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field. It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”

Epic launched a US lawsuit against Apple last August after Apple banned Fortnite from the App Store.

The tech giant made the move after Epic tried to bypass its in-app purchase framework (and circumvent the cut Apple takes) by adding its own payment mechanism to Fortnite to let users purchase in-game currency directly — in direct contravention of Apple’s rules.

As well as banning Fortnight, Apple said it would go further and revoke Epic’s developer account and access to developer tools for its Unreal Engine — a move that would have affected third party app makers that rely on Epic’s engine. However it was barred from going that far.

A US judge quickly denied Epic’s motion to force Apple to unblock the game but Cupertino was ordered not to block Epic’s ability to provide and distribute its Unreal Engine on iOS — limiting Apple’s ability to take a scorched earth approach to try to shut Epic’s battle down.

Since then Epic has filed legal complaints against Apple in Australia and the UK. It’s now also petitioning EU regulators.

The EU’s antitrust division, meanwhile, opened a formal investigation of Apple last summer — more than a year after the Europe-based music streaming service Spotify had made a similar complaint over ‘restrictive’ App Store rules and the 30% cut Cupertino takes on iOS in-app payments.

The Commission said at the time that an unnamed e-book/audiobook distributor had also complained about the impact of App Store rules on competition.

It confirmed today that it has received a complaint by Epic Games against Apple. We will assess it based on our standard procedures,” a Commission spokesperson told us. 

Epic’s argument is that Apple is denying Fortnight users on iOS a choice between Apple payment and Epic direct payment — claiming savings would be passed to direct purchasers (although Epic of course stands to gain money if it can open up a channel that bypasses Apple’s cut on in-app payments).

Epic has also tried to push Apple to let it operate an Epic Games Store on iOS — a move Apple refused, citing the “exacting standards for security, privacy, and content” which it argues are predicated on the App Store rules (although Apple’s claims of curation equaling ‘quality’ don’t always live up to the reality of what it allows to operate on its App Store).

Back in 2019, Apple also launched its own gaming distribution service, Apple Arcade — a pure-play content play that offers access to new and exclusive games playable across Apple’s device ecosystem.

That move was perhaps the straw the broke the camel’s back vis-a-vis Epic Games deciding to go all in on an antitrust brawl with Apple. (Its blog post references Apple Arcade, and notes that Apple has barred competitors, including itself, from doing the same).

It’s worth noting that Epic has also squared up to Google, which similarly takes a cut of in-app payments of Android apps distributed via its Play Store — and which also removed Fortnight from the Play Store last year.

However Google’s Android platform allows sideloading of third party apps and alternative app stores, arguably making it harder to make an antitrust case stick vs the tighter restrictions applied by Apple.

At the same time, though, Android dominates smartphone marketshare — while Apple’s cut of the global market is less than a fifth.

#antitrust, #app-store, #apple, #apps, #epic-games, #eu, #europe, #lawsuit

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Nvidia wants to buy CPU designer Arm—Qualcomm is not happy about it

Some current Arm licensees view the proposed acquisition as highly toxic.

Enlarge / Some current Arm licensees view the proposed acquisition as highly toxic. (credit: Aurich Lawson / Nvidia)

In September 2020, Nvidia announced its intention to buy Arm, the license holder for the CPU technology that powers the vast majority of mobile and high-powered embedded systems around the world.

Nvidia’s proposed deal would acquire Arm from Japanese conglomerate SoftBank for $40 billion—a number which is difficult to put into perspective. Forty billion dollars would represent one of the largest tech acquisitions of all time, but 40 Instagrams or so doesn’t seem like that much to pay for control of the architecture supporting every well-known smartphone in the world, plus a staggering array of embedded controllers, network routers, automobiles, and other devices.

Today’s Arm doesn’t sell hardware

Arm’s business model is fairly unusual in the hardware space, particularly from a consumer or small business perspective. Arm’s customers—including hardware giants such as Apple, Qualcomm, and Samsung—aren’t buying CPUs the way you’d buy an Intel Xeon or AMD Ryzen. Instead, they’re purchasing the license to design and/or manufacture CPUs based on Arm’s intellectual property. This typically means selecting one or more reference core designs, putting several of them in one system on chip (SoC), and tying them all together with the necessary cache and other peripherals.

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#acquisition, #antitrust, #arm, #cpu, #gpu, #merger, #mobile-cpu, #nvidia, #processors, #qualcomm, #regulation, #tech

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China court to proceed with ByteDance case against Tencent over alleged monopoly

ByteDance is bringing its battle with archrival Tencent to the court at a time when the Chinese government moves to curve the power of the country’s internet behemoths.

The Beijing Intellectual Property Court has permitted a ByteDance lawsuit brought against Tencent to proceed, a ByteDance spokesperson confirmed with TechCrunch. Upstart new media company ByteDance alleged that Tencent’s restrictions on Douyin, the Chinese version of TikTok, are in violation of China’s anti-monopoly draft rules. Douyin is headquartered in Beijing while Tencent’s base is in Shenzhen.

For three years, Tencent has blocked Douyin from its flagship networking apps WeChat and QQ, which bans users from viewing or sharing content from the short video app. Tencent’s behavior “no doubt” constitutes “monopolistic behavior achieved by abusing market domination to exclude and limit competition,” which the proposed anti-monopoly law prohibits, Douyin, said.

“We believe that competition is better for consumers and promotes innovation. We have filed this lawsuit to protect our rights and those of our users.”

Tencent said in response the accusation is false and malicious defamation. It further asserted that Douyin, which is used by 600 million users every day, uses illegal and anti-competitive methods to access WeChat’s user data, and it’s planning to sue ByteDance for harming its platform ecosystem and user rights.

ByteDance and Tencent each covet the other’s turf. ByteDance debuted a chat app to take on Tencent’s dominance in social networking, while Tencent countered Douyin’s popularity by introducing a slew of short video apps. Neither has managed to threaten the other’s dominance in their respective field.

Early signs show that the Chinese government is increasingly willing to rein in monopolistic behavior on the Chinese internet following two decades of relatively lax regulations.

In November, the country’s top market regulator unveiled the draft version of its first anti-monopoly law, opening a floodgate to lawsuits and investigations. In December, regulators launched an antitrust probe into Alibaba for forcing vendors to sell exclusively on its platform. Just this month, a court in Beijing imposed a 3 million yuan ($464,000) fine on fashion e-commerce site Vipshop over anti-competitive behavior. It won’t be surprising to see more Chinese internet giants getting hit by anti-trust actions in the upcoming months.

#antimonopoly, #antitrust, #asia, #bytedance, #china, #douyin, #government, #monopoly, #tencent, #tiktok

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