Tag: antitrust

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A 20-Year-Old Memento

While rummaging around for one of our daughter’s old drawings, my wife pulled out my press pass issued by the U.S. Court of Appeals for the District of Columbia Circuit 20 years ago. At the time, Microsoft sought to overturn, or at least diminish, its adverse antitrust ruling and recommended remedy that would break the company into separate applications and operating systems companies. The U.S. Justice Department and 20 states attorneys general filed the initial case in May 1998. One state dropped out almost immediately. If I rightly recall, only 18 states remained by mid-2001.

I was a staff writer for CNET News.com and remember the court case well. My reporting got lots of attention, particularly analyses of the case and where it would lead—such as prediction that the appeals court would remove the trial judge; it did and upheld eight antitrust offenses. I am unable to find the news piece online because CNET removed the byline from all my stories—presumably purged in a content management system upgrade five years (or so) ago. Even more disturbing: The stories I have found universally have the wrong datelines. For example, my report “New judge assigned in Microsoft trial” has a publication date of July 20, 2002 but should be Aug. 24, 2001. Ugh.

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Fly the Unfriendly Skies

Spanning most of my career, whether working as analyst or journalist, I have repeatedly railed against how U.S. law treats businesses—essentially as people. Reason: Moral dichotomy, where the ethical priorities of publicly-traded companies vastly differ from—and often contradict with—values of the people founding, running, or working for them. Keyword is value, where one usage refers to beliefs and another to money; meaning stock price and proceeds returned to shareholders.

My first, best articulation of this concept came during an April 2006 radio interview—I believe for NPR marketplace—when discussing major U.S. search providers Google, Microsoft, and Yahoo censoring results in China, at the government’s insistence. Behind the action there loomed censorship’s morality, such as restricting search terms like “democracy”. I expressed that there is no moral high ground in business. The high ground is quagmire, because all public companies share a single, moral objective: Make profits for stockholders. Plain, pure, and simple. Sadly, that moral agenda explains why United Airline’s PR week from Hell is Heaven for shareholders. Overbooking means the carrier fills seats; operations are lean and mean (quite literally, the latter). 

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Google, pull the Plug on Europe

Yesterday, Europe’s Competition Commission expanded its legal assault against Alphabet and major subsidiary Google. Four monopolies are under fire: AdSense, Android, search, and shopping services. Trustbusters allege that Google uses anticompetitive tactics to protect its market dominance, which share ranges from 80 percent to 90 percent in each category. Behind the charges is a hoity-toity attitude typical of overly-protectionist EU regulators. What if the information giant gave them what they want?

Imagine this: Google shuts down operations across the entire Euro zone—in a Brexit-like departure, but suddenly with no preparations. Switch it off. Search and other services could remain available in Britain and to all other non-EU countries. The company surely has the means, starting with IP blocking and expanding to other measures. The risk: Confirming just how dominant is Google, because of the incredible negative consequences. But the chaos also would lead to an outcry to restore services, while illuminating how important Big G is to citizens and how greatly businesses benefit, or profit, from the monopolies. 

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Google Runs Aground European Union Antitrust Objections

Alphabet Admirals Sergey Brin and Larry Page had better tell Captain Sundar Pichai to close the watertight doors—lest the search and advertising ship sink in the North Sea, where depths reach 700 meters (2,300). Brrrr. Are the lawyers handing out life preservers? Will paralegals man the water pumps?

Today’s expansion of the European Union Competition Commission’s investigation into Google business practices makes a really bad situation much, much, much worse. Problems are these: Adding advertising to anticompetitive charges; expanding investigation to four monopolies (AdSense, Android, search, shopping services); citing exclusive contracts as violation of the law; and narrowing the applicable market for search shopping competition, thus blowing apart one of Google’s major counter legal arguments. Kaboom! 

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European Trustbusters fight the Android Army’s Advances

Once again, as it has done in the past, Google makes the classic monopolist defense for its competitive—or anticompetitive, depending on perspective—behavior with respect to Android. Yesterday, the European Union’s Competition Commission formerly charged Alphabet and its major subsidiary, which has 12 weeks to provide satisfactory legal response before the Commission issues corrective sanctions.

Simply stated, the EC finds that the company abused its dominant position, in part by contracts compelling Android licensees to preload Google apps and related services, including search. Microsoft ran into similar bundling headaches starting in the late 1990s with respect to Windows. Responding, Kent Walker, Google general counsel, claims that licensees and consumers can choose to install third-party apps. Microsoft made like-claims during its antitrust defense here and in Europe; they fell flat. 

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The Android Army Rises

January 2010. Briefly, my attention turns away from rumors about an Apple tablet (true) and (then) Microsoft CEO Steve Ballmer’s Consumer Electronics Show keynote. On this fifth day of the new decade, Google debuts a new smartphone. I see the launch as a watershed event—and order Nexus One for myself. Made by HTC, but codesigned by Google and carrying its brand, the self-described, so-called “superphone” is the stone that later sets off an Android avalanche sweeping across the planet.

Things that matter about the N1:

  • Google sells it direct, unlocked, with no contract required
  • Voice interaction is as important as, if not more than, touch
  • Operating system and core features tightly tie to Google search
  • Hardware is a baseline reference design for manufacturing partners
  • Platform provides software developers the foundation for making Android apps
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What’s Behind Android Antitrust?

I can’t confirm Bloomberg’s report that the the U.S. Federal Trade Commission and Justice Department allegedly are beginning a joint investigation into Google’s Android licensing agreements. But I can explain what it means. Striping to the bones, from an antitrust perspective, there are two pivot points: Monopoly position and exclusive contracts. Then there is the broader regulatory agenda: Correcting (or preventing future) consumer harm.

Globally, Android is unquestionably a monopoly in the market for smartphone operating systems. However, its dominance in the United States is comparably muted by competition from iPhone. Based on smartphone subscribers, Android’s share was 51.4 percent for the three months ending July 31, 2015, according to comScore. iOS ranked second with 44.2 percent. By cell phone manufacturer, Apple leads the market, with the same share, followed by Samsung (27.3 percent). Android is leading but declining—down 0.8 points, while iOS is up 1.1 points, from April to July. 

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Google’s European Problem

Three weeks ago, Google filed its expected rebuttal to the European Competition Commission’s statement of objections released in April 2015. The EC alleges unfair competition in online shopping services.

My missive focuses less on the “what it is” and more on the “what does it mean”. Google blogged about the filing, but I haven’t yet seen the document. I choose not to source the blog, which is more about public relations. You can read the post by Kent Walker, general counsel, for yourself or the recap somewhere else. A Google blog recapping the filing is secondary to the legal document. 

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‘Really, Rupert?’ is the Right Question

Today, Rachel Whetstone, Google’s senior vice president of communications and policy, asks what has been on my mind since a stunning scoop set the Wall Street Journal against the Federal Trade Commission and the search and information giant. As I explained in an analysis of the news reporting, the story is flush with insinuation and veiled accusation, bereft of context.

Among my more serious concerns: Journal-parent News Corp’s ongoing tug-a-war with Google’s business model and its impact on paid content. Both entities likely would benefit by any means that trustbusters could crimp Google. The scoop’s timing and tone look like they intend to influence European Union public policy. Rachel’s response is brilliant, because it gets to the point: Conflict of interest taints the Journal’s credibility and impartiality. She rightly observes: “We understand you have a new found love of the regulatory process, especially in Europe”. 

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Google, FTC, and Advocacy Journalism That Stinks Like Landfill

Mac apologist Daniel Eran Dilger posted one of his lopsided-advocacy stories around 8:30 p.m. PDT last night; I saw the ridiculous headline, “Google News buries news of Google’s FTC investigation under Daniel Lyons fluff”, about two hours later, when scanning my RSS feeds. The story within is even worse. Don’t bother rewarding the author with pageviews. Notice I don’t link to the story. (Since we have two Daniels here and out of friendliness I use first names, I choose for this story to refer to Mr. Dilger as DED.)

Here’s the quick recap: DED refers to a Daniel Lyons opinion that ran in an ongoing Washington Post series. I happened to see it last night: “Five myths about Google“. I could have picked better myths, but these aren’t bad. The Post story is dateline March 20, 2015. The previous night, the Wall Street Journal blew out a big scoop regarding the Federal Trade Commission antitrust investigation into Google that closed in January 2013, finding no case. The Journal asserts cause championed by staff but ignored by Commissioners.  Blech! The WSJ report is suspicious as all bloody hell, as I explain in March 19 analysis: “What is Behind the Journal’s Big Google-FTC Scoop?” 

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What is Behind the Journal’s Big Google-FTC Scoop?

Technology industry news scoops rarely offer as much intrigue as Wall Street Journal story “Inside the U.S. Antitrust Probe of Google“. According to reporters Brent Kendall, Brody Mullins, and Rolfe Winkler, the newspaper obtained a years-old Federal Trade Commission staff document, “after the agency inadvertently disclosed it as part of a Freedom of Information Act request”.

Seriously? Is that accidentally, or accidentally on purpose? Applying the question every journalist should ask about anything—Who benefits?—raises reasonable suspicion the release was deliberate. I say that because FTC staff recommended filing antitrust charges against Google, while Commissioners cleared the search and information in a unanimous vote, according to the Journal. The answer to the “Who benefits?” question likely lies in circumstances obvious and not: Intrigue in and around the agency, including staff dissatisfied with the outcome; timing with respect to Google; and competitor lobbying, manipulation, or interference.