Topic: Regulation
★ EU Fines Google €2.4bn ($2.7bn) Over Favoring Google Shopping in Search Results (Jun 27, 2017)
The EU has three open antitrust cases against Google, and has just announced its final decision in one of those cases, which concerns Google Shopping. Very briefly, EU law doesn’t punish dominance in a market per se, but does place limits on certain behavior by dominant companies, specifically those which give their other products and services an unfair advantage. The EU has concluded firstly that Google search is dominant in the EU, and secondly that Google abused that dominance by favoring its Google Shopping feature over other “comparison shopping services”. It has therefore set a €2.4 billion ($2.7bn) fine based on revenue from Google Shopping in 13 countries where it’s available since as long ago as 2008, with a threat to levy an additional 5% of Alphabet’s total revenue going forward if Google doesn’t comply with its directives within 90 days. Other than the fine, the directive says Google has to stop favoring Google Shopping over other comparison shopping services, presumably either by eliminating the Shopping box that appears at the top and merely allowing Google Shopping results to appear with the other blue links below, or by featuring every available comparison shopping service in that box at the top and letting users choose. Predictably, Google has said it feels the decision is wrong and may appeal.
On, then, to what this all means. Firstly, this is just the first in three separate cases, and I’ve previously written in depth about the one that concerns Android here and here. In its decision, the EU explicitly says that this case sets a precedent, which certainly suggests it’s likely to find and act similarly in the other two cases. Secondly, the fine is substantial, but ultimately not the biggest punishment for Google here. Rather, the most significant outcome is restrictions on promoting other Google services in search, which applies for today onto to Shopping but by implication would also affect other linked products that get prominent promotion in search results, whether Maps, News, or potentially other categories too. Put that together with the precedent point, and we’re very likely to see similar restrictions on bundling and promoting other services in Android and possibly other areas too. Thirdly, the decision is notable for a very European approach to defining markets, which I mentioned in one of those earlier pieces on Android: the EU tends to define markets in ways normal people probably wouldn’t, because that allows it to make findings that otherwise couldn’t be made. In this case, it’s defining Google Shopping as a comparison shopping service rather than just a more useful way to present shopping-related search results and/or ads, which is how Google sees them. Once you define Google Shopping in that way, then of course Google is unfairly promoting Google Shopping over other comparison shopping services – can you even name any others? Google’s own algorithm, which benefits only from being as good as possible, rarely ranks any others above the fourth page of organic search results, suggesting their limited relevance. But as long as the EU is determined to take that approach, I see very little Google can do to fight against this decision, because it’s based on a market definition the EU gets to decide on, and which Google is essentially powerless to change. Overall, this feels like something of a watershed moment in Google’s relationship with the EU – I think any appeal is very unlikely to succeed, and at most will push back the implementation of the decision and the forced unbending of Shopping from search. But there’s lots more to come here, and Google is going to end up operating very differently in the EU from the rest of the world as a result. See a recent case in Russia for a small sense of some of the possible implications of the Android case.
One quick note: I’ve used the term “EU” throughout for simplicity’s sake, but it’s worth noting that technically it’s a specific part of the EU organization, the European Commission, which is taking this action.
via Bloomberg (see also the EU announcement and Google’s blog post)
EU Reportedly Facing Possible Billion Euro Fine in First Chunk of EU Antitrust Case (Jun 16, 2017)
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Netflix Changes its Wording about Net Neutrality (Jun 16, 2017)
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President Trump Re-Nominates Jessica Rosenworcel as FCC Commissioner (Jun 14, 2017)
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EU Opens In-Depth Investigation into Qualcomm NXP Acquisition (Jun 9, 2017)
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Amazon, Kickstarter, Reddit and Mozilla Will Protest Net Neutrality Changes July 12 (Jun 6, 2017)
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More Fraudulent Comments Submitted to FCC on Net Neutrality (May 29, 2017)
I had an earlier comment on a report that many fraudulent comments had been submitted to the FCC over its proposed net neutrality action, though the vast majority of those were against the policy proposals. Now, it’s emerged that there have also been some number of identical comments submitted in support of the proposals, at least some of which are being submitted in the names of individuals who have publicly opposed them. Those individuals have quite reasonably asked that those fraudulent comments be removed from the site, and also that the FCC investigate the fraud (something which, as far as I am aware, the FCC isn’t planning to do with the earlier comments either). There’s also an accusation – completely unsubstantiated as far as I can tell – that Comcast is somehow behind these comments. This FCC process has been dogged from the start by “astroturfing” – the process of either faking or at least dramatically magnifying apparent public comments on a controversial topic, through a combination of legitimate streamlining methods like form letters and online submission forms and illegitimate ones like these fake comments. That, in turn, seriously muddies the water in terms of what real people actually believe about all this – the only survey I’ve seen on this was sponsored by the industry and predictably showed that people broadly oppose regulation on the Internet but without being very specific about net neutrality. As I’ve said from the start, though, this FCC doesn’t seem particularly likely to bend even in the fact of significant (real) public opposition.
via Ars Technica
Uber Under Investigation for Testing Otto Trucks in California (May 26, 2017)
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Texas Lawmakers Overrule Austin Ride Sharing Rules, Uber & Lyft to Return (May 25, 2017)
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★ EU Fines Facebook 110m Euros Over Misleading WhatsApp Deal Info (May 18, 2017)
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Sprint and Windstream Sue FCC Over Telecom Price Deregulation (May 11, 2017)
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FCC Receives Many Net Neutrality Comments, Though Some Appear Fake (May 10, 2017)
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Amazon Settles with EU Over Anticompetitive E-Book Practices (May 4, 2017)
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Samsung Gets Permission To Test Self-Driving Tech in a Hyundai in Korea (May 2, 2017)
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Apple Asks California DMV to Tweak Reporting Requirements for Autonomous Driving (Apr 28, 2017)
Apple has filed a letter with the California DMV requesting some changes to its reporting requirements for the testing of self-driving cars as well as some of the definitions it uses, in response to a request for feedback from the DMV in March. Apple formally received permission to test its cars a couple of weeks back, and is now taking a more active role in helping to shape policy around the topic, partly because at the end of the year it’ll have to report its performance to the DMV and the public. Apple’s biggest request relates to the reporting requirements for disengagements, the name given to a situation in which a driver has to take over from the autonomous system. Apple wants the definition of a disengagement to be narrowed to include only those necessary to avoid either crashes or traffic violations, and to exclude cases which are pre-determined (such as driving through a construction zone) or for which the technology explicitly isn’t designed. That would have the effect of reducing significantly the number of disengagements reported, which would further Apple’s stated goal (as outlined in the letter) of increasing public confidence in autonomous systems. It would also have the side effect of making Apple’s first year of testing look better than the first years of other companies which began testing earlier under the current definitions. The other changes Apple proposes are relatively minor and mostly appear intended to provide greater clarity and remove unintended restrictions on reasonable testing.
via CA DMV
FCC Chairman Outlines Plan to Reclassify Broadband, Remove Net Neutrality Rules (Apr 26, 2017)
This has been in the offing for weeks, with lots of reporting since Ajit Pai took over as FCC Chair about his intentions to dismantle net neutrality regulations, but today it finally become official with a speech by Pai outlining his proposed approach. For now, all that will happen is that the FCC will tomorrow publish a Notice of Proposed Rulemaking outlining plans to reclassify broadband services as Title I, and inviting public comment. The significance of that is that the 2015 reclassification of broadband as Title II was what enabled the agency to pass net neutrality rules which stood up in court, so reversing that decision would also remove the net neutrality regulations. What Pai didn’t do in his speech today was outline how net neutrality rules, which he says he broadly supports, would be enforced going forward, though reporting has suggested he favors handing enforcement to the FTC with providers drawing up voluntary codes of conduct. The providers themselves, meanwhile, have been piping up in praise of the proposal while reiterating their commitment to a version of net neutrality they can live with: not blocking or degrading competing traffic. Once again, how you feel about all this depends on what you think net neutrality should mean: if you agree with that basic definition from the providers, things should be fine, but if you think it should also mean no paid prioritization, no zero rating, and so on, then you’ll have a problem with how this plays out. Pai’s fundamental argument here is that the providers were largely self-regulating before the rules, and that they will be again. The counterargument is that the threat of rules was enough to keep the carriers in line without them, and with rules eliminated and no immediate prospect of their reintroduction, carriers would be emboldened to push the limits in a way they weren’t in 2015. Also, as I argued a few weeks back, though the proposal released tomorrow will be up for public comment, I wouldn’t expect it to change much in the face of even very strong negative feedback.
via Recode (see also Pai’s speech (PDF) on the FCC website)
Google Forced to Unbundle Services from Android and Open to Search Competitors in Russia (Apr 17, 2017)
The EU is currently taking action against Google over what it sees as anticompetitive practices including bundling of its own services and blocking competing ones from being pre-installed in Android. As such, this Russian case takes on more importance than it might otherwise have, because it presents one possible outcome of the EU case, which is forcing Google to unbundle its own services from Android and allow competing search engines like Yandex to be pre-installed. That’s certainly a possibility in the EU case too, and would mirror the action taken years ago against Microsoft over browsers in Windows. If that were to happen, I’m skeptical many people (or OEMs) would choose alternative search engines on an Android phone, but it would potentially threaten Google’s Android business model, which is entirely about the apps and services it runs on the device (and the advertising they enable). For what it’s worth, as I wrote in this piece at the time the EU action was announced, I still think it’s misguided.
via Bloomberg
NYC Taxi Regulator Mulling Forcing Uber to Add Tipping Option in its App (Apr 17, 2017)
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Apple Receives Permission to Test Autonomous Vehicles in California (Apr 14, 2017)
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Silicon Valley is (quietly) beginning to fight the Trump administration’s net neutrality plan (but probably won’t succeed) (Apr 12, 2017)
This was somewhat inevitable given the earlier fight about net neutrality, but it appears tech companies are starting to make their views known on FCC chair Ajit Pai’s plans to roll back net neutrality regulations and hand oversight to the FTC instead. So far, though, none of them are saying anything publicly, and I’m skeptical that we’ll see the same vocal fight over this as we did last time around on the part of the big companies. More to the point, I suspect even if we do it won’t make much difference. When Tom Wheeler came to the FCC many doubted that he would be tough on the ISPs he had previously represented as head of a cable lobbying group, and so he was particularly sensitive to criticisms of his policy along those lines. He also, of course, represented a Democratic administration which favored net neutrality rules. Pai, on the other hand, is a familiar figure with well-known views on net neutrality, who was in turn appointed by a president who backs his agenda. As such, even though Wheeler strengthened his stance on net neutrality as a result of public pressure, I can’t see Pai caving in the same way. We might see a slight moderation of the approach, and perhaps a slowdown in the transition to ensure the FTC is ready to pick up the gavel, but I can’t see any substantive change to the plan occurring because of opposition from big tech companies. Meanwhile, of course, this sets up yet another potential fight between the tech industry and the Trump administration, which may be another reason they choose to stay fairly quiet, given all the fronts on which they’re fighting.
via Recode