Broadcom takeover of VMware could be derailed by EU antitrust probe

Broadcom’s $69 billion acquisition of cloud software company VMware is set for a lengthy antitrust investigation in Brussels over regulatory concerns that the deal will harm competition across the global technology industry.

Broadcom is already in preliminary discussions with EU officials who will be looking into worries that the merger may lead to abusive behavior, including potential future price rises by the US chipmaker, three people with direct knowledge of the transaction said.

Many large acquisitions receive similar interrogation, known in EU circles as a “phase 1” investigation, which typically takes a few months to complete.

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#antitrust, #broadcom, #competition, #eu, #mergers, #policy, #tech, #vmware

Big Tech pulls out all the stops to halt “self-preferencing” antitrust bill

Big Tech pulls out all the stops to halt “self-preferencing” antitrust bill

Enlarge (credit: FT | Reuters | Unsplash)

Amazon and Alphabet are spearheading what is shaping up to be the most intense political campaign by corporate America in recent history as part of a last-ditch attempt to stop Congress from passing laws to curb their market power.

The companies are targeting a “self-preferencing” bill which would prevent large online platforms from using their dominance in one field to give other products an unfair advantage — for example, Alphabet using its Google search engine to promote its travel or shopping products.

If the bill goes through, it is likely to lend momentum to a wave of legislation aimed at strengthening America’s competition rules, in what could be the biggest update of the country’s antitrust rules in a generation.

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#amazon, #antitrust, #apple, #google, #meta, #policy, #tech

Microsoft’s tactics to win cloud battle lead to new antitrust scrutiny

Microsoft’s tactics to win cloud battle lead to new antitrust scrutiny

Enlarge (credit: Aurich Lawson | Getty Images)

Microsoft has escaped the recent backlash against the power and wealth of the biggest US tech companies.

Despite a stock market value that has soared to more than $2 trillion on its dominance of various parts of the business software market, it has avoided a repeat of the complaints that made it the most prominent target of antitrust action in the US and Europe at the end of the 1990s.

That is, until now.

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#antitrust, #aws, #azure, #biz-it, #cloud-computing, #microsoft-az, #policy

The Senate bill that has Big Tech scared

The Senate bill that has Big Tech scared

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If you want to know how worried an industry is about a piece of pending legislation, a decent metric is how apocalyptic its predictions are about what the bill would do. By that standard, Big Tech is deeply troubled by the American Innovation and Choice Online Act.

The infelicitously named bill is designed to prevent dominant online platforms—like Apple and Facebook and, especially, Google and Amazon—from giving themselves an advantage over other businesses that must go through them to reach customers. As one of two antitrust bills voted out of committee by a strong bipartisan vote (the other would regulate app stores), it may be this Congress’ best, even only, shot to stop the biggest tech companies from abusing their gatekeeper status.

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#antitrust, #apple, #big-tech, #google, #microsoft, #policy

Report: US Senators urge FTC to scrutinize Microsoft/Activision merger

Report: US Senators urge FTC to scrutinize Microsoft/Activision merger

Enlarge (credit: Aurich Lawson)

Four U.S. Senators have sent a letter to Federal Trade Commission Chairwoman Lina Khan expressing concern about Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard, according to a Wall Street Journal report.

In the letter, Senators Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Cory Booker (D-NJ), and Sheldon Whitehouse (D-RI) express worry that the merger could hurt efforts to hold Activision management accountable for widespread allegations of abuse, sexual harassment, and discrimination at Activision Blizzard. The letter also takes specific issue with reports that Activision CEO Bobby Kotick will be allowed to stay until the merger is finalized, and that the embattled executive might have negotiated a “graceful exit” as part of the merger talks.

“This lack of accountability, despite shareholders, employees, and the public calling for Kotick to be held responsible for the culture he created, would be an unacceptable result of the proposed Microsoft acquisition,” the letter reads in part, according to the report. The Senators also expressed general concern about “consolidation in the tech industry and its impact on workers.”

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#activision, #antitrust, #ftc, #gaming-culture, #government, #merger, #microsoft, #regulatory, #senators

Antitrust bill in Senate would help rein in Big Tech platforms, DOJ says

Antitrust bill in Senate would help rein in Big Tech platforms, DOJ says

Enlarge (credit: James Leynse/Corbis)

The Department of Justice is throwing its weight behind an antitrust bill working its way through the Senate, with the department saying that it needs new tools to help police markets dominated by platforms such as Amazon, Meta (formerly Facebook), Apple, and Google.

“The Department views the rise of dominant platforms as presenting a threat to open markets and competition, with risks for consumers, businesses, innovation, resiliency, global competitiveness, and our democracy,” Peter Hyun, acting assistant attorney general, wrote in a letter to the Senate. “Discriminatory conduct by dominant platforms can sap the rewards from other innovators and entrepreneurs, reducing the incentives for entrepreneurship and innovation.” The letter was first obtained by The Wall Street Journal.

The American Innovation and Choice Online Act, cosponsored by Sen. Amy Klobuchar (D-Minn.) and Sen. Chuck Grassley (R-Iowa), would limit Big Tech firms’ ability to “unfairly preference” their own products and services. For example, under the proposed bill, Amazon couldn’t boost search rankings of its private-label products, and Apple and Google couldn’t do the same for their apps in their app stores.

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#amazon, #antitrust, #apple, #department-of-justice, #facebook, #google, #platforms, #policy

Antitrust bill would bar mergers over $5B, allow regulators to unwind others

Antitrust bill would bar mergers over $5B, allow regulators to unwind others

(credit: Dave Rutt)

Two Democratic lawmakers introduced a new bill on Wednesday that would institute a host of new regulations to scrutinize mergers, including a prohibition of those valued at more than $5 billion.

The Prohibiting Anticompetitive Mergers Act, sponsored by Sen. Elizabeth Warren (D-Mass.) and Rep. Mondaire Jones (D-N.Y.), would also prevent mergers and acquisitions that would increase market share among sellers and buyers beyond certain thresholds and would give regulators additional tools to unwind mergers.

While the $5 billion threshold, indexed to inflation, may capture headlines, this bill is perhaps most notable because it attempts to limit companies’ dominance in the labor market, too.

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#antitrust, #labor-market, #mergers, #monopoly-regulations, #monopsony, #policy

EU and UK open antitrust probe into Google and Meta over online ads

KRAKOW, POLAND - 2018/08/20: Social media apps with European Union flag are seen in this photo illustration.
The European Commission is planning issue a regulation that allows to fine social media platforms and websites if they don't delete extremist post within one hour. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)

Enlarge / KRAKOW, POLAND – 2018/08/20: Social media apps with European Union flag are seen in this photo illustration.
The European Commission is planning issue a regulation that allows to fine social media platforms and websites if they don’t delete extremist post within one hour. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)

Regulators in Europe and the UK have opened an antitrust probe into a deal between Google and Meta on online advertising, in the latest effort to tackle the market power of the world’s biggest technology companies.

The move follows US antitrust investigators who are also probing an agreement informally known as “Jedi Blue.” The search engine giant and Facebook’s parent company have been accused of working together to carve up advertising profits, acting together to buttress their businesses.

The EU and UK probes represent the latest assault on Big Tech from global regulators that are also preparing to unleash new rules designed to challenge the primacy of groups such as Google, Meta and Amazon. In response, US tech groups have launched lobbying efforts in Washington and Brussels in an effort to protect their interests.

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#advertising, #alphabet, #antitrust, #eu, #facebook, #google, #meta, #podcasts, #uk

Amazon lied about using seller data, lawmakers say, urging DOJ investigation

Amazon lied about using seller data, lawmakers say, urging DOJ investigation

(credit: Getty Images)

Amazon lied to Congress about its use of third-party seller data, the House Judiciary Committee said today. In a letter to the Department of Justice, the committee chairs asked prosecutors to investigate the company for criminal obstruction of Congress.

“Amazon lied through a senior executive’s sworn testimony that Amazon did not use any of the troves of data it had collected on its third-party sellers to compete with them,” the letter says (emphasis in the original).

The committee said that not only was Amazon’s sworn testimony knowingly false but that repeated attempts to get Amazon to correct the record or to provide evidence to substantiate its claims were either rebuffed or ignored.

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#amazon, #antitrust, #department-of-justice, #house-judiciary-committee, #policy

Nvidia abandons $66 billion Arm purchase

Nvidia abandons $66 billion Arm purchase

Enlarge (credit: Arm)

SoftBank’s $66 billion sale of UK-based chip business Arm to Nvidia collapsed on Monday after regulators in the US, UK, and EU raised serious concerns about its effects on competition in the global semiconductor industry, according to three people with direct knowledge of the transaction.

The deal, the largest ever in the chip sector, would have given California-based Nvidia control of a company that makes technology at the heart of most of the world’s mobile devices. A handful of Big Tech companies that rely on Arm’s chip designs, including Qualcomm and Microsoft, had objected to the purchase.

SoftBank will receive a break-up fee of up to $1.25 billion and is seeking to unload Arm through an initial public offering before the end of the year, said one of the people.

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#antitrust, #arm, #competition, #nvidia, #policy, #tech

Dozens of states side with Epic in Apple App Store appeal

Dozens of states side with Epic in Apple App Store appeal

Enlarge (credit: Andrew Harrer | Bloomberg | Getty Images)

States are siding with Epic Games as the developer appeals a lower court ruling in its antitrust lawsuit against Apple over app store fees and payment processing.

The attorneys general for 34 states and the District of Columbia have filed an amicus brief on behalf of Epic. Utah led the brief, claiming that “Apple’s conduct has harmed and is harming mobile app developers and millions of citizens.”

Epic sued Apple in 2020, alleging anticompetitive behavior. Apple pulled Fortnite from the App Store after Epic covertly updated the game to include an “Epic Direct Payment” option, a move that ran afoul of the App Store’s developer agreement. 

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#antitrust, #app-stores, #epic-v-apple, #fortnite, #policy

European court overturns 12-year-old €1.06 billion fine against Intel

European court overturns 12-year-old €1.06 billion fine against Intel

Enlarge (credit: ony Avelar/Bloomberg)

Sometimes the wheels of justice turn very slowly. A €1.06 billion ($1.2 billion) fine levied against Intel back in 2009 by the European Commission has been wiped out. In a press release announcing the ruling (PDF) handed down on Wednesday morning, the General Court of the European Union said the financial assumption underlying the fine was based on faulty economic analysis. 

“The (European) Commission’s analysis is incomplete and does not make it possible to establish to the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects,” the court noted.

The “rebates at issue” were part of a program run by Intel between 2002 and 2007. The chipmaker offered rebates to OEMs that used Intel CPUs in at least 80 percent of their desktops. In one instance, Intel was found to have paid a manufacturer to delay shipment of AMD desktops, in turn hampering the ability of enterprise customers to buy AMD boxes. Another OEM turned down an offer of a million free CPUs from AMD so it could continue receiving rebates from Intel.

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#amd, #antitrust, #eu, #fines, #intel, #policy, #x86

Nvidia ready to abandon Arm acquisition, report says

Nvidia ready to abandon Arm acquisition, report says

Enlarge (credit: Pavlo Gonchar/SOPA Images/LightRocket)

Nvidia may be walking away from its acquisition of Arm Ltd., the British chip designer, according to a report from Bloomberg.

The blockbuster deal faced global scrutiny, and Nvidia apparently feels that it hasn’t made sufficient progress in convincing regulators that the acquisition won’t harm competition or national security. “Nvidia has told partners that it doesn’t expect the transaction to close, according to one person who asked not to be identified because the discussions are private,” Bloomberg reported.

In a further sign that the deal is likely to be abandoned, SoftBank is also working to take Arm public, according to the report.

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#antitrust, #arm, #nvidia, #policy, #semiconductors, #takeover

Antitrust bill that bars Big Tech self-preferencing advances in Senate

The dome of the United State Capitol Building against a deep blue sky in Washington, DC.

Enlarge / The dome of the United States Capitol Building in Washington, DC. (credit: Getty Images | Phil Roeder)

The Senate Judiciary Committee voted 16-6 today to advance an antitrust bill that would prevent Big Tech firms from giving their own services preferential treatment.

The bill attempts to limit the ability of dominant firms to “unfairly preference” their own products or services in a way that would harm competition. For example, Apple and Google could not rank their own apps higher than competitors’ on app stores or in searches. With five Republican senators voting alongside Democrats, the bill has a reasonable chance of passing once it hits the Senate floor. A similar bill has been introduced in the House.

“We haven’t meaningfully updated our antitrust laws since the birth of the Internet,” said Senate co-sponsor Amy Klobuchar (D-Minn.) in a committee hearing today. “We have to look at this differently than just startup companies in a garage. That’s not what they are anymore.”

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#antitrust, #app-stores, #big-tech, #policy, #regulation, #search-rankings

Google in last-ditch lobbying attempt to influence incoming EU tech rules

Google in last-ditch lobbying attempt to influence incoming EU tech rules

Enlarge (credit: Jorisvo | Getty Images)

Google is making a last-ditch effort to change the EU’s incoming laws on Big Tech with a flurry of advertising, emails, and targeted social media posts aimed at politicians and officials in Brussels.

As EU policymakers put the finishing touches to the Digital Markets Act (DMA), executives at Google’s headquarters in Silicon Valley are stepping up their efforts to water down parts of the legislation that they fear may have a severe impact on their business.

“Top executives in California have known about the DMA all along, but they are only waking up now,” said one Google insider.

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#antitrust, #eu, #google, #policy, #regulation, #search

Amazon fined €1.1 billion by Italy for antitrust abuse

Amazon fined €1.1 billion by Italy for antitrust abuse

Enlarge (credit: NurPhoto | Amazon)

Amazon said it would appeal a €1.1 billion fine from Italy after antitrust investigators found the online shopping giant had given unfair preference to sellers who also ship their goods through Amazon’s logistics service.

Amazon had previously tried to halt the case in Italy on the grounds that it is facing a parallel investigation in Brussels covering the same ground. Its attempt was dismissed in November by the European General Court in Luxembourg.

On Thursday, Italy’s competition regulator said Amazon had been more lenient in applying performance criteria, which can lead in extreme cases to merchants being suspended, if sellers were also paying for Amazon to ship their parcels.

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#amazon, #antitrust, #eu, #european-commission, #italy, #monopoly, #policy

Meta’s failed Giphy deal could end Big Tech’s spending spree

Meta’s failed Giphy deal could end Big Tech’s spending spree

Enlarge (credit: Daniel Grizelj | Getty Images)

Instagram? Sure! WhatsApp? Go nuts. But don’t mess with GIFs. That’s the strange position taken by Britain’s competition watchdog in choosing to block Meta’s takeover of GIF repository Giphy. Meta, the UK’s Competition and Markets Authority (CMA) ruled, must now sell all the GIFs—just 19 months after it reportedly paid $400 million for them. It’s a bold move—and a global first.

Never before has a tech giant been ordered to press undo on a completed deal rather than pay a fine or make promises about how the newly merged businesses would operate. Meta, the parent company of Facebook, isn’t pleased. A spokesperson says the company disagrees with the decision and that it is considering all options, including an appeal. Usually a cautious bunch, lawyers agree that the CMA’s decision is a significant moment in the global regulatory wrangling of Big Tech, as it means deals that slipped through in the past may now have a new bar to clear. “There’s been a realization that quite small deals over the years have not been scrutinized very extensively,” says Richard Pepper, a partner at the law firm Macfarlanes.

That realization means regulators everywhere will now be on high alert for what the legal world calls “killer acquisitions”—where an established company buys an innovative startup in an attempt to squash the competition it could pose in the future. The CMA’s decision is also significant because Facebook’s Instagram takeover was waved through by its predecessor, the Office of Fair Trading, back in 2012, in what was the most high-profile probe into the deal outside the US. “The same worldwide enforcers that allowed Facebook to suck up Instagram and WhatsApp are now very wary of even small purchases by the major platforms,” says Eleanor Tyler, a legal analyst at Bloomberg Law, a legal research company. “What this shows is a change in attitude, and that’s critical.”

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#antitrust, #big-tech, #competition-uk-cma, #facebook, #giphy, #meta, #policy

FTC sues Nvidia to preserve Arm’s status as “Switzerland” of semiconductors

FTC sues Nvidia to preserve Arm’s status as “Switzerland” of semiconductors

Enlarge (credit: Arm)

The Federal Trade Commission has sued to block Nvidia’s acquisition of Arm, the semiconductor design firm, saying that the blockbuster deal would unfairly stifle competition.

“The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies,” Holly Vedova, director of the FTC’s competition bureau, said in a statement. “Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.”

Nvidia first announced its intention to acquire Arm in September 2020. At the time, the deal was worth $40 billion, but since then, Arm’s stock price has soared, and the cost of the cash and stock transaction has risen to $75 billion. The FTC lawsuit threatens to scuttle the deal entirely.

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#antitrust, #arm, #ftc, #nvidia, #policy, #semiconductors

Judge dismisses Steam antitrust case for lack of factual support

The Steam corporate logo repeats over a red background.

(credit: Aurich Lawson)

A federal judge has accepted Valve’s motion to dismiss an anti-trust lawsuit against company Steam’s store and platform, saying that plaintiff Wolfire Games failed to establish the basic facts necessary to sustain the case going forward.

Wolfire’s lawsuit in part rested on the argument that Valve was illegally tying its Steam game store (which sells the games) to the separate Steam platform (which provides game library management, social networking, achievement tracking, Steam Workshop mods, etc.). Wolfire argued that Valve was using its dominant market position in digital PC game sales (accepted in the lawsuit as 75 percent of the market for full PC game sales) to illegally prop up the platform in a way that was not conducive to competition.

In a ruling issued late last week, though, Western District of Washington Judge John Coughenour said that no illegal tying could take place because the Steam store and platform “are a single product within the integrated game platform and transaction market.” That’s because the revenues from sales of games on the Steam store go directly toward supporting the “free” services available on the platform. And in the rare cases that games sold elsewhere make use of the Steam platform, Valve lets developers create free keys to enable that integration, obviating any potential harm.

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#antitrust, #gaming-culture, #lawsuit, #monopoly, #steam, #valve, #wolfire

Nvidia acquisition of Arm now under scrutiny by FTC

Nvidia acquisition of Arm now under scrutiny by FTC

Enlarge (credit: Getty Images)

The US has raised potential objections to Nvidia’s controversial acquisition of the UK chip design company Arm from SoftBank, adding a fresh hurdle to a deal that has already stirred up serious opposition on the other side of the Atlantic.

News that American regulators shared European concerns came a day after the UK launched an in-depth investigation into the transaction on competition and national security grounds. The European Commission began its own extended review late last month.

Despite the mounting signs that regulators may try to block the deal, Nvidia said on Wednesday that it still believed “in the merits and benefits of the acquisition to Arm, its licensees and the industry.”

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#antitrust, #arm, #competition, #nvidia, #policy, #tech, #us

UK announces national security probe of Nvidia’s $54 billion Arm deal

UK announces national security probe of Nvidia’s $54 billion Arm deal

Enlarge (credit: VGG | Getty Images)

The British government has launched an in-depth investigation into Nvidia’s takeover of the UK-based technology company Arm on national security grounds, throwing another hurdle in the path of the $54 billion deal.

Digital and culture secretary Nadine Dorries has ordered a phase 2 investigation into the transaction on public interest grounds, meaning it will now be subject to a full-blown probe into antitrust and security issues. The UK competition watchdog uncovered “serious competition concerns” with the deal in July.

In a letter to the parties published on Tuesday, the government said: “The secretary of state believes that the ubiquity of Arm technology makes the accessibility and reliability of Arm IP necessary for national security.”

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#antitrust, #arm, #competition, #cpu, #nvidia, #policy, #tech, #uk

Big tech companies snap up smaller rivals at record pace

An FTC study showed how big Silicon Valley companies bought startups to eliminate future competitors.

Enlarge / An FTC study showed how big Silicon Valley companies bought startups to eliminate future competitors. (credit: Aurich Lawson | Getty Images)

The world’s largest technology companies have snapped up smaller rivals at a record pace this year in a buying spree that comes as US politicians and regulators prepare to crack down on “under the radar” deals.

Data from Refinitiv analyzed by the Financial Times show that tech companies have spent at least $264 billion buying up potential rivals worth less than $1 billion since the start of 2021—double the previous record registered in 2000 during the dotcom boom.

The glut of acquisitions comes amid much tougher scrutiny from the White House, regulators and members of Congress, who have accused large technology companies—particularly Apple, Facebook, Google, Amazon, and Microsoft—of stifling competition and harming consumers.

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#amazon, #antitrust, #apple, #facebook, #ftc, #google, #microsoft, #policy, #us

Google is getting caught in the antitrust net

Google is getting caught in the antitrust net

Enlarge (credit: NurPhoto | Getty)

Being a global company has its perks. There’s a lot of money to be made overseas. But the biggest US tech companies are finding out that there’s also a downside: Every country where you make money is a country that could try to regulate you.

It’s hard to keep track of all the tech-related antitrust action happening around the world, in part because it doesn’t always seem to be worth paying close attention to. In Europe, which has long been home to the world’s most aggressive regulators, Google alone was hit with a $2.7 billion fine in 2017, a $5 billion fine in 2018, and a $1.7 billion fine in 2019. These sums would be devastating for most companies, but they are little more than rounding errors for a corporation that reported $61.9 billion in revenue last quarter.

Increasingly, however, foreign countries are going beyond slap-on-the-wrist fines. Instead, they’re forcing tech companies to change how they do business. In February, Australia passed a law giving news publishers the right to negotiate payments from dominant internet platforms—effectively, Facebook and Google. In August, South Korea became the first country to pass a law forcing Apple and Google to open their mobile app stores to alternate payment systems, threatening their grip on the 30 percent commission they charge developers. And in a case with potentially huge ramifications, Google will soon have to respond to the Turkish competition authority’s demand to stop favoring its own properties in local search results.

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#antitrust, #apple, #eu, #google, #policy, #regulation, #tech, #turkey

South Korean antitrust regulator fines Google $177M for abusing market dominance

The Korea Fair Trade Commission (KFTC) said on Tuesday it fined Google $177 million for abusing its market dominance in the Android operating system (OS) market.

The U.S. tech company has restricted market competition by prohibiting local smartphone makers like Samsung Electronics and LG Electronics from customizing their Android OS, through Google’s anti-fragmentation agreements (AFA), according to the antitrust regulator statement.

Under the AFA, smartphone developers are not allowed to install or develop “Android forks”, modified versions of Android.

The KFTC banned Google LLC, Google Asia Pacific and Google Korea from imposing local smartphone developers to sign the AFA and make changes on details about the existing version. The new measure in South Korea will be applied to not only mobiles devices but also other Android-powered smart devices including watches and TVs.

Android has spurred innovation among Korean mobile operator owners and software developers and that has led to a better user experience for Korean consumers, Google said in its statement. “The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision,” a spokesperson at Google said.

The commission has been investigating Google over the anti-competition practice in OS market since July 2016, a spokesperson at KFTC said.

Google’s global mobile OS market share excluding China has been increased to 97.7% in 2019 from 38% in 2010, as per KFTC’s announcement.

Google’s AFA has also limited to launch tech companies’ new devices like smart watches and TVs using the operating system (OS) including Samsung’s smart watch in 2013, LG Electronics’ LTE smart speaker in 2018 as well as Amazon’s smart TV in 2018.

South Korea’s watchdog is probing into three other cases including the Play Store app market, billing system and the advertisement market.

Meanwhile, South Korea’s “anti-Google law”, takes effect on 14 September, based on Korea Communications Commission’s press release.

In late August, South Korea passed a bill to curb global tech companies including Google and Apple from imposing their own proprietary in-app payment service and commissions on app developers.

#antitrust, #apps, #asia, #gadgets, #google, #government, #hardware, #mobile, #south-korea, #tc

A majority of tech workers support antitrust legislation enforcement

With the arrival of U.S. Federal Trade Commission Chair Lina Khan, breaking up Big Tech has reemerged as a major policy discussion in Washington. The issue seems to be bipartisan, with Republicans and Democrats alike in favor of stemming monopolistic behavior in the tech industry. Of course, the situation on the ground is more nuanced.

One month after the House Judiciary Committee voted to advance five bipartisan bills that would force Amazon, Apple, Microsoft, Facebook and Google to split up or walk away from core businesses, Republican committee members introduced new legislation to give Americans legal recourse against online censorship by Big Tech companies. The more conservative-driven policy measures also propose greater transparency into content moderation practices by Big Tech.

This sparring between lawmakers on how to regulate Big Tech is not expected to end anytime soon. But as the U.S. ushers in a new era of digital transformation accelerated by the pandemic, Congress stands firmly united in the belief that Big Tech’s power must be checked to preserve the free market.

As it stands now, small competitors and consumers alike have little choice but to be tethered to Big Tech to participate in today’s modern economic engine. And coming out of the pandemic, the five biggest tech giants are growing at breathtaking speed unseen before in the history of capitalism.

Big Tech companies have come out strongly against regulation that would break up their business operations, suggesting reform would result in the loss of research and development, impractical market fragmentation and higher service costs to consumers.

A survey commissioned by a tech industry trade group funded by Big Tech companies such as Apple, Facebook and Amazon suggests that Americans view tech regulation as a low priority for Congress. Among those listed as top priority for Americans were the economy, public health, climate change and infrastructure. The survey also revealed that Americans are more likely to oppose regulation if it were to affect offerings like free shipping on Amazon Prime products.

Perhaps this poll and the bipartisan sentiment among elected leaders signals that after COVID-19, society has become aware of its dependency on tech giants, for better or worse. For the last 18 months, American workers have adapted to remote work. They utilize programs run by Big Tech companies to communicate with other employees, to run companies, and to buy groceries and essentials. It is unlikely this dynamic will change, as many companies have announced their transition to a fully remote or hybrid work model.

This topic has raised interest among professionals, more specifically those who work in the tech industry, startups and small businesses. We at Fishbowl thought we’d ask professionals — many of whom work in the tech industry — about breaking up tech giants. Fishbowl is a social network for professionals, so conducting surveys on this and other workplace topics is a natural fit.

The survey ran from July 26-30, 2021, to determine how employees in the field feel about antitrust laws. The survey asked professionals: Do you believe antitrust legislation should be used to break up Big Tech companies like Amazon and Google?

There were 11,579 verified professionals on the Fishbowl app who participated in the survey, and they were given the option to answer either yes or no. The survey was broken down into state and professional industries such as law, consulting, finance, tech, marketing, accounting, human resources, teachers and others.

Here’s what the survey revealed:

Image Credits: Fishbowl

Out of 11,579 professionals, the majority — 6,920 (59.76%) — responded yes to the survey question.

Based on responses, we found that law professionals were the highest group responding in the affirmative to the survey, with 66.67%. Consulting professionals followed with 61.97%, while finance (60.64%) marginally beat out tech (60.03%). Conversely, teachers had the lowest percentage with 53.49%. Human resources (55.65%), accounting (58.51%) and other professional industries (58.83%) trailed behind.

The survey’s data was collected from professionals in 25 U.S. states. The highest percentage responding “yes” was Colorado with 76.83%. In second place was Washington with 73.17%, and Michigan rounded out the top three with 69.70%. Missouri (51.35%) had the lowest percentage of employees responding “yes” to splitting up Big Tech. Following closely behind were Indiana (52.59%) and Massachusetts (52.83%). Overall, the majority of the states involved in the survey agreed that they believed antitrust legislation should indeed break up Big Tech companies.

Tech had the fourth-highest percentage of professionals agreeing that Big Tech companies should be broken up. Some benefits from breaking up Big Tech companies are more opportunities for small businesses — for a tech professional or entrepreneur, this could open up opportunities to launch new products, programs and services. It could also add more jobs for highly skilled professionals. Second, it can reduce data privacy and national security concerns. But some cons of breaking up Big Tech companies include the loss of research and development — large companies provide major funding for artificial intelligence, autonomous vehicles, wearables, robots and more. Ultimately, breaking up Big Tech companies can also increase service costs for professionals and the overall public.

As policymakers continue to negotiate on how to break up Big Tech, the White House is also making moves. President Joe Biden recently named Khan, a professor at Columbia Law School, as chair of the FTC. A staunch critic of Big Tech, Khan’s main priority is to protect the public from corporate abuse and ensure merger guidelines reflect economic realities and empirical learning and enforcement. Simply put, she reviews mergers with skepticism.

And in July, Biden announced his intention to nominate Jonathan Kanter for chief of the Justice Department’s Antitrust Division. Kanter is an antitrust lawyer with over 20 years of experience who has been a leading advocate and expert in the effort to promote strong and meaningful antitrust enforcement and competition policy.

With these additional members, it is expected that there will be an aggressive approach to enforcing antitrust laws across industries, leaving it to Congress to ensure that moving forward things are different.

#amazon, #antitrust, #apple, #big-tech, #column, #congress, #facebook, #google, #government, #joe-biden, #lina-khan, #microsoft, #policy, #tc, #white-house

Move fast and break Facebook: A bull case for antitrust enforcement

This is the second post in a series on the Facebook monopoly. The first post explored how the U.S. Federal Trade Commission should define the Facebook monopoly. I am inspired by Cloudflare’s recent post explaining the impact of Amazon’s monopoly in its industry.

Perhaps it was a competitive tactic, but I genuinely believe it more a patriotic duty: guideposts for legislators and regulators on a complex issue. My generation has watched with a combination of sadness and trepidation as legislators who barely use email question the leading technologists of our time about products that have long pervaded our lives in ways we don’t yet understand.

I, personally, and my company both stand to gain little from this — but as a participant in the latest generation of social media upstarts, and as an American concerned for the future of our democracy, I feel a duty to try.

Mark Zuckerberg has reached his Key Largo moment.

In May 1972, executives of the era’s preeminent technology company — AT&T — met at a secret retreat in Key Largo, Florida. Their company was in crisis.

At the time, Ma Bell’s breathtaking monopoly consisted of a holy trinity: Western Electric (the vast majority of phones and cables used for American telephony), the lucrative long distance service (for both personal and business use) and local telephone service, which the company subsidized in exchange for its monopoly.

Over the next decade, all three government branches — legislators, regulators and the courts — parried with AT&T’s lawyers as the press piled on, battering the company’s reputation in the process. By 1982, a consent decree forced AT&T’s dismantling. The biggest company on earth withered to 30% of its book value and seven independent “Baby Bell” regional operating companies. AT&T’s brand would live on, but the business as the world knew it was dead.

Mark Zuckerberg is, undoubtedly, the greatest technologist of our time. For over 17 years, he has outgunned, outsmarted and outperformed like no software entrepreneur before him. Earlier this month, the U.S. Federal Trade Commission refiled its sweeping antitrust case against Facebook.

Its own holy trinity of Facebook Blue, Instagram and WhatsApp is under attack. All three government branches — legislators, regulators and the courts — are gaining steam in their fight, and the press is piling on, battering the company’s reputation in the process. Facebook, the AT&T of our time, is at the brink. For so long, Zuckerberg has told us all to move fast and break things. It’s time for him to break Facebook.

If Facebook does exist to “make the world more open and connected, and not just to build a company,” as Zuckerberg wrote in the 2012 IPO prospectus, he will spin off Instagram and WhatsApp now so that they have a fighting chance. It would be the ultimate Zuckerbergian chess move. Zuckerberg would lose voting control and thus power over all three entities, but in his action he would successfully scatter the opposition. The rationale is simple:

  1. The United States government will break up Facebook. It is not a matter of if; it is a matter of when.
  2. Facebook is already losing. Facebook Blue, Instagram and WhatsApp all face existential threats. Pressure from the government will stifle Facebook’s efforts to right the ship.
  3. Facebook will generate more value for shareholders as three separate companies.

I write this as an admirer; I genuinely believe much of the criticism Zuckerberg has received is unfair. Facebook faces Sisyphean tasks. The FTC will not let Zuckerberg sneeze without an investigation, and the company has failed to innovate.

Given no chance to acquire new technology and talent, how can Facebook survive over the long term? In 2006, Terry Semel of Yahoo offered $1 billion to buy Facebook. Zuckerberg reportedly remarked, “I just don’t know if I want to work for Terry Semel.” Even if the FTC were to allow it, this generation of founders will not sell to Facebook. Unfair or not, Mark Zuckerberg has become Terry Semel.

The government will break up Facebook

It is not a matter of if; it is a matter of when.

In a speech on the floor of Congress in 1890, Senator John Sherman, the founding father of the modern American antitrust movement, famously said, “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.”

This is the sentiment driving the building resistance to Facebook’s monopoly, and it shows no sign of abating. Zuckerberg has proudly called Facebook the fifth estate. In the U.S., we only have four estates.

All three branches of the federal government are heating up their pursuit. In the Senate, an unusual bipartisan coalition is emerging, with Senators Amy Klobuchar (D-MN), Mark Warner (D-VA), Elizabeth Warren (D-MA) and Josh Hawley (R-MO) each waging a war from multiple fronts.

In the House, Speaker Nancy Pelosi (D-CA) has called Facebook “part of the problem.” Lina Khan’s FTC is likewise only getting started, with unequivocal support from the White House that feels burned by Facebook’s disingenuous lobbying. The Department of Justice will join, too, aided by state attorneys general. And the courts will continue to turn the wheels of justice, slowly but surely.

In the wake of Facebook co-founder Chris Hughes’ scathing 2019 New York Times op-ed, Zuckerberg said that Facebook’s immense size allows it to spend more on trust and safety than Twitter makes in revenue.

“If what you care about is democracy and elections, then you want a company like us to be able to invest billions of dollars per year like we are in building up really advanced tools to fight election interference,” Zuckerberg said.

This could be true, but it does not prove that the concentration of such power in one man’s hands is consistent with U.S. public policy. And the centralized operations could be rebuilt easily in standalone entities.

Time and time again, whether on Holocaust denial, election propaganda or vaccine misinformation, Zuckerberg has struggled to make quick judgments when presented with the information his trust and safety team uncovers. And even before a decision is made, the structure of the team disincentivizes it from even measuring anything that could harm Facebook’s brand. This is inherently inconsistent with U.S. democracy. The New York Times’ army of reporters will not stop uncovering scandal after scandal, contradicting Zuckerberg’s narrative. The writing is on the wall.

Facebook is losing

Facebook Blue, Instagram and WhatsApp all face existential threats. Pressure from the government will stifle Facebook’s efforts to right the ship.

For so long, Facebook has dominated the social media industry. But if you ask Chinese technology executives about Facebook today, they quote Tencent founder Pony Ma: “When a giant falls, his corpse will still be warm for a while.”

Facebook’s recent demise begins with its brand. The endless, cascading scandals of the last decade have irreparably harmed its image. Younger users refuse to adopt the flagship Facebook Blue. The company’s internal polling on two key metrics — good for the world (GFW) and cares about users (CAU) — shows Facebook’s reputation is in tatters. Talent is fleeing, too; Instacart alone recently poached 55 Facebook executives.

In 2012 and 2014, Instagram and WhatsApp were real dangers. Facebook extinguished both through acquisition. Yet today they represent the company’s two most promising, underutilized assets. They are the underinvested telephone networks of our time.

Weeks ago, Instagram head Adam Mosseri announced that the company no longer considers itself a photo-sharing app. Instead, its focus is entertainment. In other words, as the media widely reported, Instagram is changing to compete with TikTok.

TikTok’s strength represents an existential threat. U.S. children 4 to 15 already spend over 80 minutes a day on ByteDance’s TikTok, and it’s just getting started. The demographics are quickly expanding way beyond teenagers, as social products always have. For Instagram, it could be too little too late — as a part of Facebook, Instagram cannot acquire the technology and retain the talent it needs to compete with TikTok.

Imagine Instagram acquisitions of Squarespace to bolster its e-commerce offerings, or Etsy to create a meaningful marketplace. As a part of Facebook, Instagram is strategically adrift.

Likewise, a standalone WhatsApp could easily be a $100 billion market cap company. WhatsApp has a proud legacy of robust security offerings, but its brand has been tarnished by associations with Facebook. Discord’s rise represents a substantial threat, and WhatsApp has failed to innovate to account for this generation’s desire for community-driven messaging. Snapchat, too, is in many ways a potential WhatsApp killer; its young users use photography and video as a messaging medium. Facebook’s top augmented reality talents are leaving for Snapchat.

With 2 billion monthly active users, WhatApp could be a privacy-focused alternative to Facebook Blue, and it would logically introduce expanded profiles, photo-sharing capabilities and other features that would strengthen its offerings. Inside Facebook, WhatsApp has suffered from underinvestment as a potential threat to Facebook Blue and Messenger. Shareholders have suffered for it.

Beyond Instagram and WhatsApp, Facebook Blue itself is struggling. Q2’s earnings may have skyrocketed, but the increase in revenue hid a troubling sign: Ads increased by 47%, but inventory increased by just 6%. This means Facebook is struggling to find new places to run its ads. Why? The core social graph of Facebook is too old.

I fondly remember the day Facebook came to my high school; I have thousands of friends on the platform. I do not use Facebook anymore — not for political reasons, but because my friends have left. A decade ago, hundreds of people wished me happy birthday every year. This year it was 24, half of whom are over the age of 50. And I’m 32 years old. Teen girls run the social world, and many of them don’t even have Facebook on their phones.

Zuckerberg’s newfound push into the metaverse has been well covered, but the question remains: Why wouldn’t a Facebook serious about the metaverse acquire Roblox? Of course, the FTC would currently never allow it.

Facebook’s current clunky attempt at a hardware solution, with an emphasis on the workplace, shows little sign of promise. The launch was hardly propitious, as CNN reported, “While Bosworth, the Facebook executive, was in the middle of describing how he sees Workrooms as a more interactive way to gather virtually with coworkers than video chat, his avatar froze midsentence, the pixels of its digital skin turning from flesh-toned to gray. He had been disconnected.”

This is not the indomitable Facebook of yore. This is graying Facebook, freezing midsentence.

Facebook will generate more value for shareholders as three separate companies

Zuckerberg’s control of 58% of Facebook’s voting shares has forestalled a typical Wall Street reckoning: Investors are tiring of Zuckerberg’s unilateral power. Many justifiably believe the company is more valuable as the sum of its parts. The success of AT&T’s breakup is a case in point.

Five years after AT&T’s 1984 breakup, AT&T and the Baby Bells’ value had doubled compared to AT&T’s pre-breakup market capitalization. Pressure from Japanese entrants battered Western Electric’s market share, but greater competition in telephony spurred investment and innovation among the Baby Bells.

AT&T turned its focus to competing with IBM and preparing for the coming information age. A smaller AT&T became more nimble, ready to focus on the future rather than dwell on the past.

Standalone Facebook Blue, Instagram and WhatsApp could drastically change their futures by attracting talent and acquiring new technologies.

The U.K.’s recent opposition to Facebook’s $400 million GIPHY acquisition proves Facebook will struggle mightily to acquire even small bolt-ons.

Zuckerberg has always been one step ahead. And when he wasn’t, he was famously unprecious: “Copying is faster than innovating.” If he really believes in Facebook’s mission and recognizes that the situation cannot possibly get any better from here, he will copy AT&T’s solution before it is forced upon him.

Regulators are tying Zuckerberg’s hands behind his back as the company weathers body blows and uppercuts from Beijing to Silicon Valley. As Zuckerberg’s idol Augustus Caesar might have once said, carpe diem. It’s time to break Facebook.

#antitrust, #column, #congress, #facebook, #government, #instagram, #lina-khan, #mark-zuckerberg, #messenger, #opinion, #policy, #social, #social-media, #tc, #united-states, #whatsapp

EU set to launch formal probe into Nvidia’s $54 billion takeover of Arm

EU set to launch formal probe into Nvidia’s $54 billion takeover of Arm

Enlarge (credit: Arm)

Brussels is set to launch a formal competition probe early next month into Nvidia’s planned $54 billion takeover of British chip designer Arm, after months of informal discussions between regulators and the US chip company.

The investigation is likely to begin after Nvidia officially notifies the European Commission of its plan to acquire Arm, with the US chipmaker planning to make its submission in the week starting September 6, according to two people with direct knowledge of the process. They added that the date might yet change, however.

Brussels’ investigation would come after the UK’s Competition and Markets Authority said its initial assessment of the deal suggested there were “serious competition concerns” and that a set of remedies suggested by Nvidia would not be sufficient to address them.

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#antitrust, #arm, #eu, #nvidia, #policy

FTC: Facebook was bad at business, so it “illegally bought or buried” competition

Extreme close-up photograph of smartphone.

Enlarge / Facebook, Instagram, and WhatsApp are the three largest parts of Facebook’s sprawling empire… for now. (credit: Rafael Henrique | SOPA Images | LightRocket | Getty Images)

The Federal Trade Commission has refiled its lawsuit against Facebook and has included additional data that it hopes will bolster its case.

The refiling is a response to the FTC’s initial case, which was thrown out in June by US District Judge James Boasberg, who did not think the agency provided sufficient data or a sharp enough definition of Facebook’s market in its first filing. Judge Boasberg also dismissed a similar lawsuit against Facebook brought by 40 states on similar grounds.

“No other personal social networking provider in the United States remotely approaches Facebook’s scale,” the FTC said in its lawsuit.

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#anticompetitive-behavior, #antitrust, #facebook, #ftc, #policy, #social-media

After helping decimate department stores, Amazon plans to open its own

Amazon has experimented with physical retail for years, including this pop-up store inside a Whole Foods in Chicago, Illinois.

Enlarge / Amazon has experimented with physical retail for years, including this pop-up store inside a Whole Foods in Chicago, Illinois. (credit: Daniel Acker/Bloomberg)

Amazon is looking for its next conquest. After years of growth, most recently fueled in no small part by the COVID-19 pandemic that also has decimated physical retailers across the country, the company is reportedly planning to open its own department stores.

The move would represent a subtle shift in strategy for the e-commerce giant. Though it has experimented with its own brick-and-mortar locations, Amazon’s few-dozen currently branded stores tend to be small affairs that offer a selection of goods. Its largest customer-facing real estate, Whole Foods, came through an acquisition. If Amazon follows through on its department store plans, as reported by The Wall Street Journal, it would represent the company’s biggest ground-up push into physical retail, a flagging but still massive sector of the economy.

Don’t expect Amazon to follow in the footsteps of JC Penney or Macy’s, however. Rather, Amazon appears to be following a playbook similar to the one embraced by grocers Aldi and Trader Joe’s. Where most existing department stores are on the order of 100,000 square feet, Amazon’s stores will be about a third the size, with the first set to appear in California and Ohio. And like Aldi and Trader Joe’s, expect Amazon’s department stores to heavily feature Amazon’s private-label goods.

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#amazon, #antitrust, #brick-and-mortar, #e-commerce, #policy, #retail

Facebook may be forced to sell Giphy one year after buying it

The CMA said Facebook could deny other platforms access to GIFs because of the tie-up.

Enlarge / The CMA said Facebook could deny other platforms access to GIFs because of the tie-up. (credit: Anadolu Agency | Getty Images)

The UK competition regulator has called for Facebook to sell online image platform Giphy, which it bought for $400 million last year, after provisionally finding competition concerns following an in-depth investigation.

The move is a rare example of an overseas regulator trying to unwind a Big Tech deal, as antitrust scrutiny of Silicon Valley’s acquisitions has intensified around the world.

The Competition and Markets Authority on Thursday said it believed Facebook’s tie-up with Giphy would harm competition between social media platforms and remove a potential competitor in the display advertising market.

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#antitrust, #facebook, #giphy, #policy, #social-media

Biden picks Google foe to lead DOJ antitrust as it mulls plan to break up Big Tech

The White House seen in the early evening.

Enlarge (credit: Getty Images | Erik Pronske Photography)

President Joe Biden today said he will nominate Jonathan Kanter to be the assistant attorney general in charge of the Department of Justice’s antitrust division. Kanter is an attorney known for his criticism of Google and will take over the antitrust division as it considers a Biden plan to reverse harmful mergers and break up monopolies.

Kanter “is a distinguished antitrust lawyer with over 20 years of experience” and has been “a leading advocate and expert in the effort to promote strong and meaningful antitrust enforcement and competition policy,” the White House announcement said.

US Sen. Amy Klobuchar (D-Minn.) applauded the nomination in a statement. “For years, Jonathan Kanter has been a leader in the effort to increase antitrust enforcement against monopolies by federal, state, and international competition authorities. His deep legal experience and history of advocating for aggressive action make him an excellent choice to lead the Department of Justice’s Antitrust Division,” Klobuchar said.

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#antitrust, #biden, #google, #jonathan-kanter, #policy

Facebook tries to beat FTC lawsuit by pushing Chair Lina Khan off the case

Lina Khan speaking and gesturing with her hands at a Senate committee hearing.

Enlarge / Lina Khan speaks to the Senate Commerce Committee on April 21, 2021, when her nomination to the FTC was being considered. (credit: Getty Images | Bloomberg)

In an attempt to avoid government scrutiny, Facebook today petitioned the Federal Trade Commission to have Chair Lina Khan removed from the antitrust case against the social media giant.

Facebook’s petition comes shortly before the FTC must decide whether to continue its lawsuit against Facebook, which seeks to break up the company. The agency would have to submit an amended complaint because a judge dismissed the agency’s first attempt, which was filed by the FTC during the last weeks of the Trump administration.

Today’s Facebook petition was sent to the FTC and Khan, asking them “to recuse Chair Khan from participating in any decisions concerning whether and how to continue the FTC’s antitrust case against the company.” Facebook’s petition comes two weeks after Amazon filed one asking Khan to remove herself “from any antitrust investigation, adjudication, litigation, or other proceeding in which Amazon is a subject, target, or defendant.”

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

Facebook is shook, asks for removal of FTC Chair Khan from antitrust cases against it

Facebook has joined Amazon in a show of alarm at the sudden rise of antitrust hawk Lina Khan to the position of FTC Chair by asking that she be recused from all decisions relating to the company. The argument, more or less identical to Amazon’s, is that before her appointment, Khan was too outspoken about her professional opinion that companies like these are in violation of antitrust rules.

In a letter filed with the FTC and obtained by the WSJ, which the agency could not provide and declined to comment on, Facebook explained that Khan’s last few years of academic publications and articles in other media amount to cause for recusal from decisions about the company. (I have asked Facebook for a copy of the petition and will update this post if I receive it.)

“Chair Khan has consistently made public statements not only accusing Facebook of conduct that merits disapproval but specifically expressing her belief that the conduct meets the elements of an antitrust offense. When a new commissioner has already drawn factual and legal conclusions and deemed the target a lawbreaker, due process requires that individual to recuse herself,” reads the petition.

Neither the FTC nor Khan in any other capacity have responded to the recusal requests from Facebook and Amazon. She did note in her nomination proceeding that recusal requests like these do happen, and are resolved on a case-by-case basis (unlike automatic recusals for things like financial or personal interest). Perhaps even now she is meeting with the ethics experts at the agency.

Khan has, however, certainly made her policy positions known in numerous articles and papers, many of which have argued that antitrust regulators have been highly conservative in their interpretation and deployment of their legal powers, and equally permissive in their oversight of the current crop of enormous tech companies. Things like acquiring competitors, artificially lowering prices to pressure a market, or misrepresenting the collection and use of customer data have gone either unchallenged or minimally punished.

In particular she acted as counsel for the House’s Investigation of Competition in Digital Markets, an antitrust report issued last fall. Amazon and Facebook lean on cases from 1966 and 1970 where an FTC Commissioner was recused for “prejudgment” of a case during a Congressional investigation in which he participated. It’s a promising hook to hang a case on to be sure, but the circumstances are by no means equivalent. I’m not a lawyer, but it seems to me that no case or even specific allegations have been prejudged, only the general idea that Facebook, Apple, Google, and Amazon all either have monopolies or otherwise possess market power. (They didn’t care much when the report was issued.)

The main finding of the House report, in fact, was arguably that there could be no legal case because existing laws and regulations are insufficient. Certainly Khan has shouted this from the rooftops for some years now — but the conclusion is a legislative matter, not an FTC one. It would be mighty difficult for Khan to have prejudged an antitrust case predicated on laws that haven’t yet been written.

Khan’s FTC has suffered an early setback on her watch though not of her making in the dismissal of some complaints in the agency’s current antitrust case against Facebook. It was for lack of evidence that the company exerts monopoly control over social media that the judge told the FTC to come back and try again. Perhaps Khan intends to remedy that with a supplemented filing, or perhaps she will take the loss and muster her forces for another go in a year or two — but either way it is probably best to resolve the question of her alleged “prejudgment” before that decision is announced. (The FTC declined to speculate as to whether the recusal request would affect the current proceedings.)

But the agency also has explicit backing from the White House in the form of President Biden’s request that it prioritize “dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” So Khan probably isn’t feeling the sting of the aforementioned legal challenge.

The petitions filed by Amazon and Facebook have near-zero risk for the companies and an outside chance at provoking a recusal, so it makes sense strategically to file them. They also provide breadcrumbs later for their inevitable objections to the FTC’s (under Khan, equally inevitable) allegations of monopolistic practices. The legal repercussions are hard to predict but it is usually better to have a complaint on the table already rather than bring it out late in the process.

Given Chair Khan’s position that the FTC itself needs to be overhauled and empowered in order to bring actions like this against companies like Facebook, it seems clear that all these are merely the opening gambits in a long, long game.

#antitrust, #facebook, #ftc, #lina-khan, #monopoly, #tc

Google fined $592M in France for breaching antitrust order to negotiate copyright fees for news snippets

France has hit Google with a fine of half a billion euros after finding major breaches in how it negotiated with publishers to remunerate them for reuse of their content — as is required under a pan-EU reform of digital copyright law which extended neighbouring rights to news snippets.

The size of the fine is notable as it’s over half of the entire $1BN news licensing pot that Google announced last October — when it said it would be paying news publishers “to create and curate high-quality content” to appear on its platforms.

At the time, the move that looked intended to shrink Google’s exposure to legal mandates to pay publishers for content reuse by pushing them to accept commercial terms which give it broad rights to ‘showcase’ their content.

France’s watchdog has now called out — and sanctioned — the practice.

The half a billion euro penalty is also notable for being considerably more than Google had already agreed to pay French publishers, according to Reuters — which reported, back in February, that the tech giant had inked a deal with a group of 121 publishers to pay them just $76M over three years.

France’s competition authority said today that it’s applying the sanction of €500 million ($592M) against the tech giant for failing to comply with a number of injunctions related to its earlier, April 2020 decision — when the watchdog ordered Google to negotiate in good faith with publishers to remunerate them for displaying their protected content.

Initially, Google sought to evade the neighbouring news right by stopping displaying snippets of content alongside links it showed in Google News in France. But the watchdog found that was likely to be an abuse of its dominant position — and ordered Google to stop circumventing the law and negotiate with publishers to pay for the reuse in good faith.

The Autorité de la Concurrence is not happy with how Google has gone about this, though.

A number of publishers complained to it that the negotiations were not carried out in good faith and that Google did not provide them with key information necessary to inform payments.

The Syndicate of magazine press publishers (SEPM), the Alliance de Presse d’Information Générale (APIG) and Agence France Presse (AFP) made complaints in August/September 2020 — kicking off the investigation by the watchdog and today’s announcement of a major penalty.

Further fines — of up to €900,000 per day — could be headed Google’s way if it continues to breach the watchdog’s injunctions and fails to supply publishers with all the required information within a new two-month deadline.

In a press release detailing its investigation, the Autorité said Google sought to unilaterally impose its global news licensing product, aka ‘Showcase’, under a partnership the tech giant calls Publisher Curated News — in negotiations with publishers — pushing for the legal neighbouring right to be incorporated as “an ancillary component with no separate financial valuation”.

Publishers requests to break out copyright remuneration negotiations were denied, per the watchdog’s investigation.

It also found Google “unjustifiably” reduced the scope of negotiations with regard to the scope of income derived from the display of protected news content — with Google telling publishers that only advertising income from Google Search pages posting news content should be taken into account in determining the level of remuneration due.

The authority found this exclusion of income from other Google services and all indirect income related to this content to be in breach of the copyright law and its earlier compliance order.

Google also “deliberately circumscribed” the scope of the law on neighboring rights by excluding titles that do not have a Political and General Information certificate — which the watchdog couched as a “bad faith” interpretation of the code on intellectual property.

It also found the tech giant sought to exclude press agencies from renumeration related to their content when used by third party publishers — highlighting that as another breach of its April 2020 decision, by further noting: “The French legislator has been very explicit on the need to include press agencies.”

In another finding, it said Google had only provided publishers with “partial” and “insufficient” information for a “transparency assessment of renumeration due”; and further accused the tech giant of delaying until just a few days before the injunction deadline to provide it — so of being “late” too.

The authority’s investigation highlights compliance problems with another injunction — related to an obligation of neutrality in how protected content is presented on Google’s platforms — with the watchdog writing on that: “The strategy put in place by Google has thus strongly encouraged publishers to accept the contractual conditions of the Showcase service and to renounce negotiations relating specifically to the current uses of protected content, which was the subject of the Injunctions, under penalty of seeing their exposure and their remuneration degraded compared to their competitors who would have accepted the proposed terms. Google cannot therefore claim to have taken the necessary measures to prevent its negotiations from affecting the presentation of protected content in its services.”

Another injunction sought to prevent Google from seeking to leverage its dominance by offsetting remunerations paid to publishers for the neighbouring rights.

On this the watchdog also took issue with its approach — noting that its Showcase product requires publishers to make not just snippets of their content available for display on Google’s platforms but “large extracts” and even whole articles.

It also found that Google linked participation in the Showcase program to subscription to another service called Subscribe with Google (SwG) — enabling it to link negotiation on neighboring rights with the subscription of new services that could financially benefit its business.

Under a subhead which denounces what it found as “extremely serious practices”, the authority goes on to accuse Google of “a deliberate, elaborate and systematic strategy of non-compliance” — and of continuing an already years-long “opposition strategy” to the principle of neighbouring rights; and then, after they’d been baked into EU and French law, seeking to “minimize the concrete scope of those rights as much as possible”.

Google has, the authority asserts, sought to use a global strategy to close down publishers’ ability to negotiate for remuneration for their content reuse at a national level — using its Showcase product as a cloak for “avoiding or limiting as much as possible” payments to publishers; and, simultaneously, seeking to use negotiations on neighboring rights as an opportunity to obtain access to new content by press publishers that could allow it to collect additional income, such as from subscriptions to press titles.

“The sanction of 500 million euros takes into account the exceptional seriousness of the breaches observed and that the behavior of Google has further delayed the proper application of the law on neighboring rights, which aimed to better take into account the value of content from publishers and news agencies included on the platforms. The Authority will be extremely vigilant about the correct application of its decision, as non-execution can now lead to periodic penalty payments,” added the watchdog’s president, Isabelle de Silva, in a statement (which we’ve translated from French).

The half a billion euro fine and the warning to Google that its practices will attract daily fines if it persists in ignoring the injunctions put the tech giant on notice that the detail of commercial deals won’t be allowed to fly under the radar in France.

Any more attempts to shape a self-serving version of ‘compliance’ are likely to attract further sanction from the watchdog — which also recently applied a number of interoperability requirements on Google’s ad business (and slapped it with a $268M fine), also acting on complaints from publishers.

While anything Google agrees to in France on the neighbouring rights issue is likely to set the bar for what it can achieve with commercial deals elsewhere — at least in other EU markets, where the copyright extension also applies (once it’s been transposed into a Member State’s national law).

In a statement responding to the authority’s sanction, Google expressed disappointment with the outcome of the investigation — claiming to have acted in good faith throughout negotiations with publishers:

“We are very disappointed with this decision — we have acted in good faith throughout the entire process. The fine ignores our efforts to reach an agreement, and the reality of how news works on our platforms. To date, Google is the only company to have announced agreements on neighbouring rights. We are also about to finalize an agreement with AFP that includes a global licensing agreement, as well as the remuneration of their neighbouring rights for their press publications.”

The tech giant went on to suggest that the authority’s decision is “primarily” related to negotiations in France which took place between May and September 2020, further claiming it has continued to engage with publishers and press agencies since then to find “solutions”.

By way of example it pointed to a January 2021 framework agreement inked with the Alliance de la Presse d’Information Générale — which it claims covers every IPG title (Information de Presse Générale) in a “transparent and non-discriminatory way”. It also pointed to agreements it has inked with other publications in the market, including Le Monde, Courrier International, L’Obs, Le Figaro, Libération, and L’Express.

Google also reiterated its confident it can sign a global licensing agreement with Agence France Presse — which it said it also wants to include remuneration of neighbouring rights for press publications from the agency.

“Our objective remains the same: We want to turn the page with a definitive agreement,” it added, saying it would take the French Competition Authority’s “feedback into consideration and adapt our offers” and that: “We are already engaging with press publishers and agencies beyond IPG, by covering publications that are recognised by the CPPAP as ‘online press services’, and we reiterate our offer to have an independent third party in a position to evaluate our offers and allow us to base our discussions on facts.”

Other major fines for Google in France in recent years include the aforementioned $268M for adtech abuses last month; $120 for dropping tracking cookies without consent back in December; $166M in December 2019 for opaque and inconsistent ad rules; and $57M for privacy violations in January 2019.

Beyond the EU, Australia recently passed a law which requires tech giants, Google and Facebook, to enter mandatory arbitration with publishers for reuse of their content if they fail to agree commercial terms on their own.

Its law has attracted considerable attention worldwide as legislators grapple with how to rein in powerful tech platforms and ensure the sustainability of traditional news businesses whose revenues have been hit by the Internet-driven shift to digital publishing.

The UK’s Competition and Markets Authority has, for example, described Australia’s backstop of mandatory arbitration if commercial negotiations fail as a “sensible” approach — at at time when the government is working on shaping an ex ante regulation regime to enable competition authorities to pro-actively tackle abuses by platforms with strategic market power.

Ahead of Australia’s law being passed, Google had warned that it might have to close its services in the country if legislators went ahead and also suggested the quality could degrade or that it may have to start to charge for products. In the event, it did not shut up shop down under.

The tech giant was also an active lobbyist against the EU’s plan to extend digital copyright to cover snippets of news content — and, as recently as 2019, it was vowing never to pay for news.

A few years later it announced the $1BN pot to pay publishers to licence content. But Google’s eventual bill for its ad business piggybacking upon others’ journalism may be rather larger than that.

#antitrust, #australia, #competition-law, #copyright-law, #europe, #european-union, #france, #google, #google-news, #le-monde, #media, #showcase

“Bad mergers” and noncompete clauses targeted in Biden executive order

President Joe Biden speaking into a microphone and gesturing with his hands.

Enlarge (credit: Getty Images | Bloomberg)

President Joe Biden announced his anticipated executive order today, and it’s a sweeping document that seeks to counter rising corporate consolidation and foster greater competition in everything from labor markets to mergers, banking, healthcare, device repairs, transportation, broadband, and more.

“For decades, corporate consolidation has been accelerating,” the White House said in a statement. “In over 75 percent of US industries, a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture and more.” (We published a separate article today that dives into the broadband portions of the executive order.)

With the order, Biden appears to be positioning himself as an antitrust champion, name-checking famed trust-buster Teddy Roosevelt. That’s no surprise—his appointment of Lena Khan as chair of the Federal Trade Commission telegraphed that he would be taking an aggressive approach to consolidation and anticompetitive practices.

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#antitrust, #biden, #competition, #ftc, #labor-market, #mergers, #platforms, #policy

GOP’s Big Tech plan ignores consumers, targets “censorship” of Republicans instead

The Republican Party elephant symbol seen in a conference hall.

Enlarge / The Republican Party elephant symbol at the Conservative Political Action Conference in National Harbor, Maryland, on Friday, Feb. 28, 2020. (credit: Getty Images | Bloomberg)

Congressional Republicans released an antitrust plan for Big Tech yesterday with an announcement that made it clear their focus is not on boosting competition or reducing harms to online consumers but on alleged “censorship” of conservatives.

“Big Tech is out to get conservatives” is the first sentence in the “House Judiciary Republican Agenda for Taking on Big Tech.” The “conservative response” to tech-industry problems “will speed up and strengthen antitrust enforcement, hold Big Tech accountable for its censorship, and increase transparency around Big Tech’s decisions,” the opening paragraph continues. The word “competition” never appears in the two-page plan. A separate plan previously released by House GOP Leader Kevin McCarthy (R-Calif.) does mention competition, but McCarthy’s plan also focuses mostly on supposed bias against conservatives.

The House Judiciary Republicans’ plan was released as former President Donald Trump sued Twitter, Facebook, and Google subsidiary YouTube for banning him, claiming that all three companies are guilty of “impermissible censorship” that violates “the First Amendment right to free speech.” Trump’s lawsuit has been widely mocked by legal experts and is almost certain to be defeated because the First Amendment does not require private companies to host speech and because Section 230 of the Communications Decency Act gives online platforms immunity from lawsuits over how they moderate user-submitted content.

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#antitrust, #big-tech, #conservatives, #policy, #republicans

Google “bought off Samsung” to limit app store competition, 36 states allege

Google “bought off Samsung” to limit app store competition, 36 states allege

Enlarge (credit: Andri Koolme / Flickr)

Yesterday, dozens of state attorneys general sued Google on antitrust grounds, alleging that the company worked to “preemptively quash” competing app stores (most notably the Samsung Galaxy Store) and maintain its monopoly on Android app distribution.

The lawsuit alleges that Google engaged in a range of anticompetitive practices, including offering large app developers profit-sharing agreements in exchange for exclusivity, creating unnecessary hurdles for sideloading, and attempting “to buy off Samsung to limit competition from the Samsung Galaxy app store.”

Google says the lawsuit is “meritless.” “It’s strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others,” Wilson White, Google’s senior director of public policy, wrote in a blog post. 

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#android, #antitrust, #google, #google-play-store, #lawsuit, #policy, #samsung

Amazon doesn’t like FTC chair Lina Khan’s views, wants her off investigations

Lina M. Khan testifies during a Senate Commerce, Science, and Transportation Committee nomination hearing on Capitol Hill on April 21, 2021, in Washington, DC.

Enlarge / Lina M. Khan testifies during a Senate Commerce, Science, and Transportation Committee nomination hearing on Capitol Hill on April 21, 2021, in Washington, DC. (credit: Graeme Jennings-Pool/Getty Images)

Amazon filed a 25-page petition today with the FTC asking that Chairwoman Lina Khan recuse herself from antitrust investigations into the company.

Khan, a frequent critic of Amazon and other Big Tech firms, was appointed FTC chair less than two weeks ago. Though there has been plenty of speculation about her first moves, her short tenure to date means she hasn’t had much opportunity to file lawsuits or announce investigations. Amazon’s petition shows that its legal team hasn’t sat idle since her nomination as commissioner and subsequent appointment as chair.

“Although Amazon profoundly disagrees with Chair Khan’s conclusions about the company,” the company wrote in the petition, “it does not dispute her right to have spoken provocatively and at great length about it in her prior roles. But given her long track record of detailed pronouncements about Amazon, and her repeated proclamations that Amazon has violated the antitrust laws, a reasonable observer would conclude that she no longer can consider the company’s antitrust defenses with an open mind.”

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

Amazon betrays its fear with petition to sideline FTC Chair and antitrust hawk Lina Khan

Amazon has petitioned that the newly minted Chair of the FTC and implacable critic of the company, Lina Khan, be recused from decisions relating to the company. The company argues that she has been too outspoken about the failure to regulate Amazon to handle matters impartially.

It will be for the FTC to decide, and its oversight committee to supervise, whether Khan will recuse herself; an agency spokesperson declined to comment on the matter.

Amazon’s argument (which you can read below) is that Khan has simply gone too far in her criticism of Amazon prior to her confirmation at the FTC, creating an effective “prejudgment” that precludes her ability to consider cases relating to the company objectively.

Although Amazon profoundly disagrees with Chair Khan’s conclusions about the company, it does not dispute her right to have spoken provocatively and at great length about it in her prior roles. But given her long track record of detailed pronouncements about Amazon, and her repeated proclamations that Amazon has violated the antitrust laws, a reasonable observer would conclude that she no longer can consider the company’s antitrust defenses with an open mind.

But it’s equally plain to “a reasonable observer” that Amazon, one of the largest and most powerful companies in the world, is a natural target for analysis by an expert whose professional opinion is that antitrust regulation is inadequate and dated.

And it was arguably this very idea that set her on the path to her nomination and sudden ascendance to Chair. Her “Amazon’s Antitrust Paradox” paper was not the manifestation of a vendetta against the online services giant — it was an indictment of the aging antitrust doctrine that permitted what she argued amounted to legalized monopolistic behavior.

Amazon may have been the one in the crosshairs, but it was only a stand-in for an entire school of regulatory thought that, Khan has persuasively argued in numerous papers and articles, mindlessly pursued a narrow definition of consumer harms and benefits. There are other ways that a company might act against consumer interests, such as crushing competition in a market by subsidizing costs through dominance of another market — something Amazon has made core to its entire business model.

Furthermore, the position of Chair at the FTC is one of leadership and priority setting, not utter impartiality. The impartiality comes in the form of legal arguments that show a company has, for example, broken the law. Long-held opinions count for nothing with a judge, including Khan’s own public and professionally expressed opinions; should she lead the agency in an effort against Amazon, she will have to support her interpretation of the law with facts and systematic argument.

While one can only speculate at the administration’s true reasoning for its rapid elevation of Khan, it’s hard to imagine that it’s anything but a whole-hearted endorsement of the philosophy and change she advocates.

Khan’s expertise and perspective on antitrust have made Amazon a natural antagonist, not because Khan is a monomaniacal crusader, but because Amazon could very well represent one of the largest regulatory failures in history. To point that out is not grounds for recusal — it may however be grounds for making history.

You can read the full Amazon petition below:

#amazon, #antitrust, #ftc, #government, #lina-khan

Google and Microsoft agree to start suing each other again

Google and Microsoft agree to start suing each other again

Enlarge (credit: Halil Sagirkaya / Anadolu Agency)

After years of relative calm, Google and Microsoft are tossing out their ceasefire, a move that—perhaps ironically—could bring each company additional antitrust scrutiny.

The non-aggression pact, signed five years ago, let the two companies set aside their numerous lawsuits. It also created a process by which they could resolve conflicts behind closed doors, requiring Microsoft and Google to follow that process before asking regulators to step in. During this time, the two companies have tussled over a number of issues, including whether search engines should pay news publishers. But Microsoft reached the end of its rope when it felt that Google wasn’t playing fair in ad tech.

Both companies attempted to solve the impasse through a series of escalating negotiations as laid out in the agreement. The matter ultimately reached the corner office, with CEOs Satya Nadella and Sundar Pichai holding a series of talks that didn’t reach a solution. That lack of a resolution is what apparently led to the agreement’s unraveling, according to a new Bloomberg report.

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#advertising, #antitrust, #google, #lawsuits, #microsoft, #policy, #search-engines

FTC’s antitrust case against Facebook falters but doesn’t quite fall in federal court

An antitrust suit against Facebook by the FTC and several states had the wind taken out of its sails today by a federal judge, who ruled that the plaintiffs don’t provide enough evidence that the company exerts monopoly control over social media. The court was more receptive, however, to revisiting the acquisitions of Instagram and WhatsApp, and the case was left open for regulators to take another shot at it.

The court decision was in response to a Facebook motion to dismiss the suit. Judge James Boesberg of the D.C. circuit explained that the provided evidence of monopoly and antitrust violations was “too speculative and conclusory to go forward.” In a more ordinary industry, it might have sufficed, he admits, but “this case involves no ordinary or intuitive market.”

It was incumbent on the plaintiffs to back up their allegation of Facebook controlling 60 percent of the market with clear and voluminous data and a convincing delineation of what exactly that market comprises — and it failed to do so, wrote Boesberg. Therefore he dismissed the complaints in accordance with Facebook’s legal argument. (I’ve asked the FTC and Facebook for comment and will update this post if I hear back.)

On the other hand, Boesberg is sensible that lack of evidence in the record does not mean that the evidence does not exist. So he his giving the FTC and states 30 days to amend their filing, after which the complaints will be reevaluated.

He also found that Facebook’s logic for dismissing the suit’s allegations regarding its controversial acquisitions of Instagram and WhatsApp was lacking.

Facebook argued that even supposing that these acquisitions were somehow problematic, the FTC is not authorized to prosecute such “long-past conduct” and is limited to more recent or imminent problems. Boesberg was not convinced, finding precedent that essentially says such mergers are legally considered current as long as they exist, and the government can revisit them any time it thinks it has cause. (That’s not the case for the state lawsuits, however, which he dismissed outright for coming too long after the fact.)

That may very well be the plan of the FTC’s new Chair, Lina Khan, who has taken a hawkish regulatory position regarding antitrust in general and past acquisitions specifically. At her confirmation hearing she commented that the approvals of the mergers may have been made without complete information and as such represented a “missed opportunity” to understand and build rules around.

We’ll likely know more following the upcoming FTC meeting on Thursday. The 30 day punt in fact may be a great opportunity for Khan to put her ideas into practice, as the judge practically literally invites them to rewrite the complaint with more information. Whether she and the FTC have enough material to put together a compelling case remains to be seen, but one thing is for certain: Facebook should put the champagne back in the fridge, for now at least. Khan may not stop at a slap on the wrist.

#antitrust, #facebook, #ftc, #ftc-vs-facebook, #government, #lawsuit, #social

House committee approves bill that could break up Amazon, Apple, and Google

Monopoly board game.

Enlarge (credit: Getty Images | MichaelJay)

The House Judiciary Committee approved antitrust legislation that could prohibit platform operators like Amazon, Apple, Google, and Facebook from favoring their own products and services, and the legislation could even break up industry giants by forcing them to eliminate or sell certain divisions. Companies could also face fines of 15 percent of their annual revenue.

Bills introduced by Democrats were approved in a hearing that began Wednesday morning, recessed at 5 am EDT Thursday, reconvened late Thursday morning, and finished around 3 pm. The final and most controversial bill approved was the Ending Platform Monopolies Act, which “eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition,” a press release from Antitrust Subcommittee Chairman David Cicilline (D-R.I.) on June 11 said.

The 21-20 vote went mostly along party lines, but Republicans Ken Buck (R-Colo.) and Matt Gaetz (R-Fla.) supported the bill. Democrats who opposed it were Zoe Lofgren (D-Calif.); Eric Swalwell (D-Calif.); Lou Correa (D-Calif.); and Greg Stanton (D-Ariz.).

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#amazon, #antitrust, #apple, #facebook, #google, #policy

EU antitrust regulators launch probe into Google’s FLoC plan

Close-up shot of the Chrome web browser's logo on an Android screen.

Enlarge (credit: Getty Images | NurPhoto )

The European Commission today said it has begun investigating Google for “possible anticompetitive conduct” in the market for online advertising technology.

The EC announcement said the formal antitrust investigation will “assess whether Google has violated EU competition rules by favoring its own online display advertising technology services in the so-called ‘ad tech’ supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers.” The EC said it will “examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use.”

Chrome and Android figure into the investigation. The EC said it will investigate “Google’s announced plans to prohibit the placement of third-party ‘cookies’ on Chrome and replace them with the ‘Privacy Sandbox’ set of tools, including the effects on online display advertising and online display advertising intermediation markets.” Google’s Privacy Sandbox is also called FLoC, for Federated Learning of Cohorts.

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#android, #antitrust, #chrome, #european-commission, #google, #policy

EU is now investigating Google’s adtech over antitrust concerns

EU antitrust authorities are finally taking a broad and deep look into Google’s adtech stack and role in the online ad market — confirming today that they’ve opened a formal investigation.

Google has already been subject to three major EU antitrust enforcements over the past five years — against Google Shopping (2017), Android (2018) and AdSense (2019). But the European Commission has, until now, avoided officially wading into the broader issue of its role in the adtech supply chain. (The AdSense investigation focused on Google’s search ad brokering business, though Google claims the latest probe represents that next stage of that 2019 enquiry, rather than stemming from a new complaint).

The Commission said that the new Google antitrust investigation will assess whether it has violated EU competition rules by “favouring its own online display advertising technology services in the so called ‘ad tech’ supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers”.

Display advertising spending in the EU in 2019 was estimated to be approximately €20BN, per the Commission.

“The formal investigation will notably examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use,” it added in a press release.

Earlier this month, France’s competition watchdog fined Google $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.

In that instance Google sought a settlement — proposing a number of binding interoperability agreements which the watchdog accepted. So it remains to be seen whether the tech giant may seek to push for a similar outcome at the EU level.

There is one cautionary signal in that respect in the Commission’s press release which makes a point of flagging up EU data protection rules — and highlighting the need to take into account the protection of “user privacy”.

That’s an interesting side-note for the EU’s antitrust division to include, given some of the criticism that France’s Google adtech settlement has attracted — for risking cementing abusive user exploitation (in the form of adtech privacy violations) into the sought for online advertising market rebalancing.

Or as Cory Doctorow neatly explains it in this Twitter thread: “The last thing we want is competition in practices that harm the public.”

Aka, unless competition authorities wise up to the data abuses being perpetuated by dominant tech platforms — such as through enlightened competition authorities engaging in close joint-working with privacy regulators (in the EU this is, at least, possible since there’s regulation in both areas) — there’s a very real risk that antitrust enforcement against Big (ad)Tech could simply supercharge the user-hostile privacy abuses that surveillance giants have only been able to get away with because of their market muscle.

So, tl;dr, ill-thought through antitrust enforcement actually risks further eroding web users’ rights… and that would indeed be a terrible outcome. (Unless you’re Google; then it would represent successfully playing one regulator off against another at the expense of users.)

The need for competition and privacy regulators to work together to purge Big Tech market abuses has become an active debate in Europe — where a few pioneering regulators (like German’s FCO) are ahead of the pack.

The UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO) also recently put out a joint statement — laying out their conviction that antitrust and data protection regulators must work together to foster a thriving digital economy that’s healthy across all dimensions — i.e. for competitors, yes, but also for consumers.

A recent CMA proposed settlement related to Google’s planned replacement for tracking cookies — aka ‘Privacy Sandbox’, which has also been the target of antitrust complaints by publishers — was notable in baking in privacy commitments and data protection oversight by the ICO in addition to the CMA carrying out its competition enforcement role.

It’s fair to say that the European Commission has lagged behind such pioneers in appreciating the need for synergistic regulatory joint-working, with the EU’s antitrust chief roundly ignoring — for example — calls to block Google’s acquisition of Fitbit over the data advantage it would entrench, in favor of accepting a few ‘concessions’ to waive the deal through.

So it’s interesting to see the EU’s antitrust division here and now — at the very least — virtue signalling an awareness of the problem of regional regulators approaching competition and privacy as if they exist in firewalled silos.

Whether this augurs the kind of enlightened regulatory joint working — to achieve holistically healthy and dynamic digital markets — which will certainly be essential if the EU is to effectively grapple with surveillance capitalism very much remains to be seen. But we can at least say that the inclusion of the below statement in an EU antitrust division press release represents a change of tone (and that, in itself, looks like a step forward…):

“Competition law and data protection laws must work hand in hand to ensure that display advertising markets operate on a level playing field in which all market participants protect user privacy in the same manner.”

Returning to the specifics of the EU’s Google adtech probe, the Commission says it will be particularly examining:

  • The obligation to use Google’s services Display & Video 360 (‘DV360′) and/or Google Ads to purchase online display advertisements on YouTube.
  • The obligation to use Google Ad Manager to serve online display advertisements on YouTube, and potential restrictions placed by Google on the way in which services competing with Google Ad Manager are able to serve online display advertisements on YouTube.
  • The apparent favouring of Google’s ad exchange “AdX” by DV360 and/or Google Ads and the potential favouring of DV360 and/or Google Ads by AdX.
  • The restrictions placed by Google on the ability of third parties, such as advertisers, publishers or competing online display advertising intermediaries, to access data about user identity or user behaviour which is available to Google’s own advertising intermediation services, including the Doubleclick ID.
  • Google’s announced plans to prohibit the placement of third party ‘cookies’ on Chrome and replace them with the “Privacy Sandbox” set of tools, including the effects on online display advertising and online display advertising intermediation markets.
  • Google’s announced plans to stop making the advertising identifier available to third parties on Android smart mobile devices when a user opts out of personalised advertising, and the effects on online display advertising and online display advertising intermediation markets.

Commenting on the investigation in a statement, Commission EVP and competition chief, Margrethe Vestager, added:

“Online advertising services are at the heart of how Google and publishers monetise their online services. Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary. So Google is present at almost all levels of the supply chain for online display advertising. We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack. A level playing field is of the essence for everyone in the supply chain. Fair competition is important — both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content. We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition.”

Contacted for comment on the Commission investigation, a Google spokesperson sent us this statement:

“Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day. They choose them because they’re competitive and effective. We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers.”

Google also claimed that publishers keep around 70% of the revenue when using its products — saying in some instances it can be more.

It also suggested that publishers and advertisers often use multiple technologies simultaneously, further claiming that it builds its own technologies to be interoperable with more than 700 rival platforms for advertisers and 80 rival platforms for publishers.

#adtech, #android, #antitrust, #competition-and-markets-authority, #cory-doctorow, #doubleclick, #europe, #european-commission, #european-union, #fitbit, #france, #google, #information-commissioners-office, #margrethe-vestager, #marketing, #mobile-devices, #online-advertising, #privacy-sandbox, #targeted-advertising, #tc, #united-kingdom