Uber Files Appeal in London Hours Before Deadline (Oct 13, 2017)
Uber has formally lodged an appeal against its ban in London, on the day the deadline to do so would have passed, allowing its service and drivers to continue operating until the matter is resolved. As I suspected, though this kicks off a formal legal process, it seems the situation is most likely to reach a resolution through negotiation between Uber and Transport for London, the body that regulates cabs and ride sharing services in the city. My guess is that Dara Khosrowshahi’s recent visit will have shed light on specific changes Uber needs to make to pass regulatory muster going forward, and that it’s actively working on a plan to ensure it can continue to operate there.
With all the renewed talk of a Sprint-T-Mobile merger in recent months, one big assumption has been that the Trump administration would view it much more favorably than the Obama administration did, and that it wouldn’t therefore be shot down this time as it was last time. However, Bloomberg reports today that the staff lawyers at the Department of Justice are mostly the same as under the previous administration, even if the leadership and presidency has changed in the interim, and that the lawyers themselves are likely to reach much the same conclusion today as then. In other words, if the deal is to be approved by the DoJ, it will likely happen over the objections and recommendations of the staff rather than with their support. That’s certainly not a deal-killer – SoftBank Chairman Masa Son has cozied up to the Trump administration on issues like job creation, and would presumably curry some favor on that basis. But this does make it more challenging for the deal to go through than many might have assumed. Last time around, the deal was called off before it even formally went through regulatory approval on the basis that it wouldn’t succeed, so I would guess that Son and others would be feeling out the regulatory authorities quietly behind the scenes again this time around to ensure smoother passage.
The California DMV has approved rules to go into effect next year which will allow companies testing autonomous vehicles on its roads to do so without human drivers or traditional human driving hardware in cars. That’s a change to the existing rules, which had explicitly prohibited such testing and required human drivers. This appears to be at least in part a response to the increasing popularity of Arizona as a testing location for driverless cars due to its looser regulations, something which has presumably irked companies based in California which would rather test their technology closer to home. All of this could eventually be superseded by federal regulation being contemplated, which would override all state-level rules on this topic, but that’s still some way off and it makes sense for states with an existing commitment to allowing such testing to move forward in the meantime. As before, companies will have to register and report details of both their testing and any disengagements (human interventions) and accidents involving their cars.
via The Verge
This is just a quick follow-up on yesterday’s item on Google’s second proposed remedy to the finding that its Shopping search feature violates the EU’s competition laws. Google has now begun rolling out the changes that were reported but not officially confirmed by the company, and the EU’s stance is still that it will have to wait and see how the changes pan out before it rules on whether the fix is acceptable. The separation and opening up of bidding to other companies certainly leaves the door open to similar remedies in the other cases pending at the European Commission as well as other areas it may choose to investigate, including Maps, News, and so on, which would create much more far-reaching effects for Google than this change alone. It’s going to be a tough few years for Google in Europe.
After its initial proposal to address the European Commission’s concerns over its Shopping search feature apparently failed to pass muster, it appears Google is now offering to separate its Shopping search business from its core search business in the EU, and force it to bid for ten slots above the regular search results alongside other comparison shopping services. The reporting here from Bloomberg makes it sound like Google might still get more formal approval of its proposal, despite the EU Competition Commissioner’s remarks to Bloomberg last week which suggested that it would have to play things by ear. This solution will certainly seem less fishy than the first proposal, which I said had significant issues, but it’s still not clear whether it will meet the approval of either the EU or Google’s competitors. Certainly, Google is now going to have to bid for slots it previously received for free, which will dramatically change the economics of the Shopping search in the EU. But as long as Google has exclusive rights to its past data about the results from those links in the past, it will continue to have something of an unfair advantage over competitors in knowing what to bid for them in future.
The US Food and Drug Administration has pushed forward with plans to test a fast-track process for approving technological approaches to healthcare problems, and has selected nine companies to be part of its pilot program, including Apple, Fitbit, Samsung, and Alphabet’s Verily life sciences unit. Apple has long said that the need to get FDA approval for health-related products would likely dissuade it from entering that market directly, though it’s managed to serve that market indirectly through partners taking advantage of its ResearchKit and other programs. Both Apple and Fitbit have been pursuing health-related applications for their devices, and Samsung launched a virtual doctor service as part of its Galaxy S8 launch earlier this year, so this is clearly a hot area for these consumer tech companies. The FDA deals mostly with products with diagnostic or treatment applications, which is why so much health and wellness tech tends to stop short of those categories and merely provide data and alerts. But the potential for doing more is already clear, and with faster FDA approval we could well see these companies go deeper into this field. It’s still early in this process, and there might still be other downsides including the potential for leaks while approval is being sought, which is likely to give Apple in particular pause, but this is a positive step for both the industry and for end users.
★ Uber Loses License to Operate in London Over Bad Behavior (Sep 22, 2017)
Transport for London, the entity that oversees public transportation and taxi services in the UK capital, has refused to renew Uber’s license to operate a private ride for hire service in the city, citing several examples of bad behavior. It’s perhaps the most tangible sign yet that Uber’s toxic culture, disregard for regulation, and general willingness to do what it takes to win in the market have come home to roost. The timing is unfortunate given the ouster of Travis Kalanick and the recent appointment of Dara Khosrowshahi as CEO, but clearly stems from behavior that took place long before those recent changes. Uber has said it plans to appeal and Khosrowshahi has said both in communications to employees and in public on Twitter that the decision is in part Uber’s own fault, which is heartening. It’s important to note that this decision isn’t about ride sharing services in general but specifically about Uber’s bad acts, so Uber needs to address those specific concerns even as it makes its usual arguments about the benefits to society a service like Uber provides. This is an unusual situation for Uber to be in – being banned in a city where it’s well established and generally well regarded, without a broader ban on ride sharing services. If I were Dara Khosrowshahi, I’d be on the next plane to London to talk to TfL, understand exactly what the issues are, fix what still needs fixing, and promise to do much better in future. Losing its presence in a city like London could be enormously damaging to its business in the UK and Europe more broadly because so many people travel through London.
This seems like a totally bizarre stance from the EU’s Competition Commissioner in response to Google’s proposed remedy to its alleged abuse of its dominant market position. Google is reported to have offered an auction to fill the Shopping slot it previously occupied exclusively, and Margrethe Vestager says her office won’t approve the remedy as such, but will wait to see whether it works in the market. That’s enormously unfair as an approach because it means Google could act in good faith, believing it’s proposed an adequate remedy, only to find out much later than it hasn’t and is subject to back-dated fines. Given that the European Commission found that Google violated its rules, it should surely also be the arbiter of whether the proposed remedy fixed things or not. And allowing the comparison shopping services that prompted the investigation in the first place to be the judges instead seems particularly unreasonable given that they have a vested interest in continuing to extract concessions from Google. I said when the proposed remedy was reported last week that I thought it unlikely to be sufficient, but to leave Google in legal limbo on this point just isn’t reasonable. It gives the impression that the EU has an axe to grind with Google and wants it to suffer rather than simply providing the legal clarity it should be entitled to.
CNBC reports that T-Mobile and Sprint are in active discussions about a stock-for-stock merger, with Deutsche Telekom likely to end up the majority owner and SoftBank a significant minority shareholder. This has always seemed the likeliest merger to come out of the recent resumption of deal talks after the end the 600MHz spectrum auction and its associated quiet period came to an end, but it’s felt like the sticking point was T-Mobile’s unwillingness to be bought out by Sprint/SoftBank. A stock-for-stock deal with Deutsche Telekom and T-Mobile ultimately calling most of the shots is likely a lot more palatable, especially for TMO CEO John Legere, who’s arguably been enormously successful running the company over the last few years and would understandably be reluctant to cede control to the Sprint side. It sounds like the two sides are still some way from a deal, and of course even if it’s finalized it will take months to go through regulatory approvals, a period that would likely see Sprint lower its investment and manage for cash flow and profitability, something that’s likely to lessen competition in the US market even before a deal closes. Following such a deal, the combined entity would at least theoretically be in a much more competitive position given its combined scale, though many of the synergies would take some time to flow through.
A few weeks back, when Google filed its proposed response to the European Commission’s investigation into its Shopping feature, I suggested that there were only a few ways in which it might comply with the Commission’s requirements: “kill its Shopping product entirely in the EU; relegate it to either the organic or paid slots on a page rather than giving it the current prominent placement it enjoys; or create a broader “comparison shopping” section above the regular search results featuring both its own and competing services.” In the end, it sounds like what Google has proposed is a combination of those things – allowing other comparison shopping sites to bid to appear in the Shopping section where its own results currently appear exclusively, while placing an artificial cap on its own maximum bids to avoid dominating the results after the change.
The latter highlights the unlikelihood that the solution will be palatable to Google’s competitors or the EU – either it forces itself to sit out entirely from the bidding process, or it will regularly beat out competitors. Google knows better than anyone else what placement in that slot is currently worth, because it’s the only company that’s ever occupied it, and it therefore enjoys an unfair advantage. It could therefore set arbitrary caps in line with what it thinks those slots are worth, allowing competing companies to take the slots it doesn’t want to and reserving the best for itself. Either this has to be an open marketplace, in which case Google’s massive scale will likely allow it to beat out competitors for every slot it actually wants (as the WSJ points out it already does in many cases), or Google has to be excluded. This is where I go back to the solutions I proposed – either open up the Shopping slot in a similar fashion to Microsoft’s Windows browser choice options, or do away with the feature entirely. This proposed solution seems unlikely to pass muster with the EC.