ICOMP announces Mediaset as new member

May 10th, 2013 by ICOMP Secretariat

The Initiative for a Competitive Online Marketplace (ICOMP) is delighted to announce Mediaset, the largest commercial broadcaster in Italy, as our latest Council Member.

Gina Nieri, Mediaset’s Executive Board Member, commented “we believe that unfair competition and asymmetric regulation are two major obstacles to the development of a truly sustainable online audiovisual industry and look forward to working with ICOMP to support the development of a thriving and pro-competitive online marketplace”.

Founded in the 1978, Mediaset is the largest commercial broadcaster in Italy and Spain, with over 6,000 employees and activities ranging from digital terrestrial television, complemented by several news, entertainment, sport websites and online VOD services, along with programme and cinema production making it one of the leading media groups in Europe.

We look forward to working together with Mediaset in our campaign for a free, open and competitive online marketplace.

For further information please visit http://i-comp.org/blog/3p

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ICOMP Breakfast Seminar: Competition and the online marketplace

May 9th, 2013 by ICOMP Secretariat

 

Thursday 16 May 2013, 0900 – 1130

Carinthia Chamber of Commerce, Europaplatz 1, 9020 Klagenfurt

Next week Members of the ICOMP Council will gather in Klagenfurt, Austria, for our 16th Council Meeting. The meeting comes at a crucial time for all those who, like our Membership, believe in the importance of a competitive online market, as the European Commission is seeking views on Google’s offer to settle its competition case. As part of an exciting schedule we are delighted to be partnering with the Chamber of Commerce who will be hosting what promises to be an excellent panel event.

The event will take place on Thursday 16 May 2013 at 0900, for a 0930 start, and will look to stimulate discussion around the beneficial effects of a vibrant and competitive online marketplace to both business and consumers. The online marketplace offers exciting opportunities, as well as real and potential threats, to businesses operating both on and offline and we expect the session to focus on a range of these issues covering IT, media and content creation, and advertising and consulting. We are delighted to welcome an excellent panel of speakers which will be made up of:

  • David Wood, ICOMP Legal Counsel (Moderator)
  • Chris Radda, mediaNET
  • Martin Zandonella and Juergen Mandl, Austrian Federal Economic Chamber of Commerce
  • Curt Simon Harlinghausen, AKOM360
  • Dr. Felix Josef, TRICONSULT
  • Bruno Hautzenberger, addIT

Following an introduction from Lord Watson of Richmond, ICOMPs Chairman, the panellists will make presentations before engaging in a discussion and Q&A session with other guests. There will also be a light lunch served and an opportunity for networking.

We look forward to welcoming the guest speakers, ICOMP Members and others to this and the wider events around the Council Meeting in Klagenfurt.

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Google’s commitments: too little, too late?

April 25th, 2013 by ICOMP Secretariat

Following weeks of speculation, we are pleased to see the publication of a market test notice and look forward to the opportunity to analyse and respond to Google’s proposal in a constructive manner. It is vital to ensure that the market test is thorough and robust and is not simply an exercise to “tick the boxes”.

As we have repeatedly said, it is very important to provide complainants and interested parties with the opportunity to review the proposals and offer their observations, including evidence to show how the proposals will play out in practice. Google has had some time to test the proposals and how they might affect user clicks. We believe complainants and others also have an important role to play not least because of the sectoral expertise they offer. However, they must be provided with enough information and time to make the detailed analysis that is required.

If the proposals don’t clearly set out non-discrimination principles and the means to deal with the restoration of effective competition, plus effective enforcement and compliance, it’s very difficult to see how they can be satisfactory. Commissioner Almunia has himself stated that returning competition to markets effectively destroyed by Google’s dominance and abuse of that position is the main aim of this investigation.

We will comment further once we have had an opportunity to evaluate the proposals in more detail but it is clear that mere labelling is not any kind of solution to the competition concerns that have been identified. Google should implement the same ranking policy to all websites. This should include their own vertical services which currently have their ranking unfairly manipulated to appear at or near the top of search results.

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A dominant player and the public purse: The damage of Google’s ‘economic investment’

April 24th, 2013 by ICOMP Secretariat

“We’re a key part of the electronic commerce expansion of Britain which is driving a lot of economic growth for the country,” claimed Google Chairman Eric Schmidt in defense of Google’s low corporation tax payments yesterday. However, the reality is that there has been a high price to pay for Google’s ‘investment’ in the online world and one of ICOMP’s Members who began business as an online start-up, has a very different story to tell.

Dr. Marc Pinter-Krainer, Founder & CEO of online news portal, One News Page responded to Schmidt’s comments: “I found the impact of Google’s search services to be detrimental to my business in its early days. I started One News Page in 2009, and as an experienced entrepreneur, I was excited about the opportunity to build a successful online news resource.

“Only a few months after later, my website was subjected to an unexplained “penalty”, imposed by Google without any justification. The effect of this was that One News Page no longer appeared in Google’s search results. As Google dominates the online search market, this meant that our site effectively disappeared from the Internet.

“We were lucky to have the support of our investors throughout that difficult period, after which, Google eventually lifted the imposed restrictions in 2010 – again without any explanation. I now know first-hand that rather than empowering smaller busineses, Google’s anti-competitive conduct has the power to cripple innovative businesses,  leading to less choice and less innovation, both of which hinder the growth of the online economy.”

This is just one story among many within ICOMP’s membership, highlighting the damage caused by Google’s so-called ‘investment’ in the online marketplace. It is stories such as these which have driven several businesses to make complaints of Google’s abusive practices to the European Commission, in a bid to save the future online economy within Europe before it’s too late.

Unsurprisingly, in a naïve attempt to gloss over the company’s misdeeds and pull the wool over the nation’s eyes, Schmidt’s further defence that Google’s employees pay tax has also failed to resonate amongst MPs. Chairman of the Public Accounts Committee, Margaret Hodge vociferously responded  by saying “I get fed up of hearing these global corporations saying they are contributing in other ways. Of course they employ people and those people pay tax.” Hodge’s words were also publicly supported by Labour MP Fiona Mactaggart.

Schmidt’s additional claims to have empowered billions of start-ups through Google’s advertising network is also a menial offering. The very advertising network he refers to, offers free Adwords to new businesses but rather than helping them innovate, only serves to get them hooked into Google’s services. Meanwhile the company strategically uses anticompetitive practices to cause harm to any potential competitive threat.

Most telling out of all of this are the comments of online users saying they wish they could boycott Google (as some have with Amazon) but can’t – a clear sign of a dominant player and who has hampered the ability of alternative services to compete fairly, if ever there were one and provide consumers with an alternative choice.

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Google in last chance saloon

April 24th, 2013 by ICOMP Secretariat

After over 2 years of formal inquiry and negotiation, the online industry is now set to have its say on whether Google’s proposed remedies will effectively end the abuse of its dominance, restoring competition to the marketplace. ICOMP welcomes the formal market testing phase of the Commission’s investigation as a significant step forward and possibly a new lease of life for the digital ecosystem.

After years of denial and obfuscation, Google’s submission of remedies for market testing constitutes a de facto admission of dominance and abuse. Google has also finally accepted that any solution worthy of the name would have to involve changes to its search page – action it has never before countenanced. The fact that these admissions and concessions come only at the eleventh hour and only when the Commission saw fit to wield the threat of direct punitive action is disappointing but does not lessen their significance. They are certainly not concessions which would have been given willingly.

Market testing now presents the final and best opportunity for those harmed by Google to obtain redress. Recent leaks suggest that, perhaps unsurprisingly, Google’s offer falls far short of what is needed to provide this redress. If this is the case, it will be incumbent on the rest of the industry to stand up and make its message clear: “we need far more serious improvement if we are to level the playing field.”

ICOMP hopes, of course, that Google’s commitments will be rigorous, meaningful and published in detail for scrutiny and testing by those they will affect. In any event, the commitments will provide compelling evidence in any future action for damages.

It is perhaps the essential principle of a healthy marketplace that a company which enjoys Google’s overwhelming dominance cannot fail to offer a guarantee of equal treatment to would-be competitors. In view of Mr Almunia’s commitment to restore effective competition and the Commission’s own guidelines which refer repeatedly to need to deal with ‘persisting effects’ of infringing behaviour, the Commissioner must not accept anything which falls short of this.

ICOMP calls upon all concerned to participate and provide the evidence which allows the Commission to perform its duty and, if necessary, insist on enhanced commitments.

There is everything to play for.

David Wood, ICOMP Legal Counsel

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Google’s privacy invasions lead to yet another fine – when will the buck stop?

April 23rd, 2013 by ICOMP Secretariat

Yesterday the Data Protection Agency in Hamburg, leading the charge for all German privacy enforcers, fined Google €145,000 just short of the maximum fine of €150,000 for illegally capturing and storing personal data.  Google collected often sensitive personal information through its so-called Google-cars which drove around the streets of Europe and elsewhere to take pictures for its StreetView service.  The head of the Hamburg agency Dr. Johannes Caspar, who at the time was the first to make the practice public, called the case “one of the most serious cases of violation of data protection regulations that have come to light so far.”  In doing so he echoed similar comments made by the Dutch privacy enforcers on the same case.

Google can now add this latest fine to the increasing number they have faced after a series of privacy breaches. The real trouble is that the fines seem to have no effect on the company’s behaviour, because with over 90% of the European market share Google knows that without competition web users and therefore advertisers (Google’s real customers) will continue using their services. For Google the fines they have received are merely the cost of doing business and worth it to maintain their monopoly grip.

But Google still doesn’t seem to get it.  Perhaps most concerning in this regard is the explanation Google continues to put forward, echoed by Eric Schmidt to the BBC only yesterday, that this was the result of the “actions of a single individual” and the matter was dealt with immediately. An FCC report in April 2012 already made it clear that the harvesting of data was neither an accident nor the work of a single member of staff, rather the privacy concerns flagged to project supervisors were simple shrugged off or, worse, willingly ignored. Furthermore, it was only when German authorities approached Google about the collection of data that the company admitted what had taken place and sought to take (limited) action.

Both Caspar and the Dutch agency also rejected Google’s claims.  ”The fact that this happened over such a long period of time and to the wide extent established by us allows only one conclusion: that the company’s internal control mechanisms failed seriously,” said Johannes Caspar.

ICOMP has already pointed out that Google’s practices have not changed since Dr. Caspar first brought these serious violations into the open.  Together with five other European privacy enforcement agencies Dr. Caspar’s office is investigating yet another serious violation by Google.  We recall that the French privacy enforcers of the CNIL led an investigation that found that Google’s existing privacy policy violates EU privacy rules.  The CNIL has announced that enforcement actions will be taken by the six before the Summer.

In his statement today Dr. Caspar admitted that the level of fines in Germany is “totally inadequate for the punishment of such serious breaches of data protection.” But privacy enforcers can and should do more to protect the privacy of Europe’s citizens than simply impose such meaningless fines.  Existing law gives them the power to tell Google to stop collecting and using personal data as long as its practices are not in line with EU rules.  EU citizens deserve that meaningful steps are taken to protect their privacy.  It is high time that enforcers use all the tools that are available to them to stop this repeat violator from continuing to invade their privacy only to satisfy its insatiable hunger for advertising dollars.

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ICANN but you can’t – Google’s amended application does nothing to allay competition concerns

April 15th, 2013 by ICOMP Secretariat

Last week, news emerged that Google was amending its controversial application to exclusively register the web extensions .app, .blog, .search and .cloud after it became apparent that ICANN (the organisation overseeing the transition of top-level domains) was prepared to act on industry complaints that this domain grab would be anticompetitive. As ICOMP argued at the time, it is clear that awarding Google exclusive control over the gTLD “search” for example, would make it exceedingly difficult for its vertical search competitors to compete on the merits and result in an entrenchment of Google’s already overwhelming search dominance.

In a letter to ICANN on 6 April, Google (via wholly owned subsidiary Charleston Road Registry) sought to revise its .search application, purportedly to give other search providers a chance to obtain second-level domains under the .search gTLD. However, far from lessening competitive concerns, Google’s changes in fact expand Google’s ability to control future sources of search queries – thereby potentially inflicting even greater harm on the search community and search users.

Google’s proposed amendments belie some very serious concerns:-

  • The revised application would only minimally expand third-party access to the .search gTLD.  The application would reserve the right for Google to limit third-party registrations “to the names that registrants commonly use in trade related to their provision of search-related services, possibly including restricting registrations to exact matches of trademarks.” In other words, Google could prevent third parties from registering any second-level domain that was not identical to a trademark associated with that party’s search services and presumably retain the right to divert user queries to all other second-level domains (e.g., video.search, travel.search) to itself.
  • Google would have broad control over who qualifies for second-level domains and remain largely free to operate the .search gTLD in ways that harm competition.  For example, the application reserves to Google “the right to charge different prices for unique second-level domains within the [.search] gTLD.”  This would permit Google to, for instance, charge $100 to partners (e.g., one of the many search engines for which Google today is the exclusive provider of search advertising) but $100 million or more to competitors.  Google also retains the unilateral right to impose compatibility requirements on registrants and to audit them for compliance.  Nothing would prevent Google from exercising these rights in ways that intimidate rivals, thwart innovation, or foreclose competition.
  • Google would retain unprecedented access to user and competitor data.  Through its operation of the .search gTLD, Google would appear to retain access to every user search query and every response passing through the .search domain — including queries directed to second-level domains operated by competitors.  This information could be confidential or competitively sensitive and with Google’s recent record in respect of consumer privacy and dominance abuse, it is extremely worrying that they should have access to it. Nothing in the revised application addresses this concern.

 

While Google is actively seeking to portray its proposed amendments to the .search application as resolving competition they in fact do nothing of the sort.  Most search providers will see little benefit, but considerable risk, in seeking a second-level domain from Google.

Accordingly, ICOMP urges ICANN to reject Google’s efforts to amend its original application.

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Google’s Offer Requires Robust Market Test

April 11th, 2013 by ICOMP Secretariat

News that Google has submitted a final remedies offer to the Commission, recognising that change in their business practices is necessary in order to restore competition to the online market, is potentially welcome but certainly comes with caveats. Providing complainants and interested third parties the opportunity to review the proposals and offer their observations is an important part of the process. It is now vital to ensure that the market test is thorough and robust and is not simply an exercise to “tick the boxes”.

For the Commissioner to achieve his main aim, which is returning competition to markets effectively destroyed by Google’s dominance and abuse of that position, it is imperative to fully involve those relevant parties, such as complainants, in any final decision. This is not least because of the sectorial expertise they would provide, expertise that few others are in a position to offer.

The opportunity offered by robust market testing to ensure the delivery of effective and future proof remedies must be grasped. As has been publically stated by a number of complainants in this case, there is concern that Google’s settlement offer will fail to deliver this and thereby negate the return of competition to the search and search advertising markets.

Additionally, to ensure the final outcome is future proof it is important to consider market developments such as mobile search in the process. There are also many other issues besides the four core concerns highlighted by Commissioner Almunia (search manipulation, scraping, exclusive advertising arrangements and restrictions on ad data portability) that need to be dealt with, and swiftly.

Even following a market test, an outcome that fails to stop Google from manipulating search results will be a failure.

It is also ICOMP’s view that any settlement reached following the market test must be robust and enforceable. This is especially true given Google’s well-documented history of dealing with authorities with less than good faith and of failing to live up to its commitments.

Given the time and resources spent on the prolonged investigation, the Commissioner must maintain full transparency including publishing the results of the full investigation and whether they believe Google has abused the dominant position held in search and search advertising.

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Google fails to comply with EU privacy laws. Authorities in six member states decide to take sanctions. Others need to follow.

April 3rd, 2013 by ICOMP Secretariat

Today the French Data Protection Authority (CNIL) announced that at least six European Data Protection Authorities (DPAs) will take the investigation into Google’s privacy policy to the next level and are drafting sanctions.

Following an investigation led by the CNIL, the so-called Article 29 Working Party found that Google violated EU privacy law and requested on 26 October 2012 that Google change its privacy policy Google refused to do so even after it met with a taskforce composed of the DPAs of France, Germany, Italy, the Netherlands, Spain, and the United-Kingdom.

As a result, the six members of this taskforce have today launched actions based on their respective national legislation that should lead to the imposition of fines and force Google to bring about specific changes.

ICOMP regrets that it has taken such drastic action from the six DPAs in question to bring Google into line and calls upon Google to rapidly change its policy and respect the legitimate privacy concerns of its users.  ICOMP expects the remaining DPAs in Europe to follow suit. After all, the purpose of the Article 29 Working Party’s unprecedented investigation was to avoid divergent responses from the 27 DPAs plus their 4 partners (Croatia, Norway, Iceland and Liechtenstein). Enforcement action by only six of these authorities when the EU Directive which has been breached applies in every European jurisdiction, represents precisely this kind of divergence.

Despite the Article 29 Working Party’s conciliatory attitude (asking for a delay in the privacy policy’s initial implementation and eschewing its injunctive powers), Google has deliberately frustrated the investigation at every turn. In June 2012 (2 months after the policy’s implementation), the CNIL wrote to Google expressing regret that responses to earlier questionnaires concerning Google’s privacy policies were “often incomplete or approximate”. Then in February of this year, the French authority said it still had not received “any precise and effective” responses from Google.

From this conduct, European authorities should glean two things:-

1.       That only regulatory intervention will remedy Google’s transgressions – its market dominance means it can and indeed will put its own interests above those of the consumer; and

2.       Only rigorous enforcement will ensure compliance – Google has shown its unwillingness to cooperate with good will.

A recent study by privacy campaign group Big Brother Watch reveals that almost three quarters (71%) of Britons believe data protection authorities were right to investigate Google’s privacy policies and 66% believe that national regulators such as the Information Commissioner’s Office in the UK should be doing more to force Google to comply with existing European directives on privacy. Consumers care about their online privacy and need regulators to defend it. What is needed now is imaginative thinking to come up with such sanctions, including issuing an incentive to Google to stop collecting and using personal data until it complies with the rules.

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Momentum Builds Across Europe as BEUC Joins EC Investigation

March 25th, 2013 by ICOMP Secretariat

ICOMP has long campaigned for the implementation of remedies in the online marketplace in order to redress the growing imbalance of power in favour of Google. Momentum has been growing across Europe, with both businesses and consumers who have experienced real damage expressing support of a change.

Today BEUC, the European Consumer Organisation has published a white paper which looks at the areas of concern identified by the Commission’s investigation into Google and presents the consumer point of view on the possible remedies to restore competition and effective consumer choice. BEUC has also today been granted a formal role as an “interested party” in the EU antitrust investigation. This is further confirmation that Google is not only damaging the online ecosystem and the business of other online players, but is also actively harming European consumers by removing choice from their online options.

The organisation calls on the European commission to implement both behavioural and structural market remedies. One of the measures suggested is that Google must use an objective, non-discriminatory mechanism to rank and display all search results, including any links to Google products; effectively creating a level playing field once more. BEUC also calls for the functional separation of Google’s different services and assets as the advertising giant “has developed a significant conflicting interest—to steer users, not to other site’s services, but to its own growing stable of competing services in price comparison, travel search, social networking and so on”.

Last week, 11 of the companies which complained to the European Commission about Google’s anticompetitive conduct published an open letter to Commissioner Almunia calling for official sanctions against the company. This outcry by affected parties will continue to grow in volume and scale as long as the status quo remains in place.

The Commission needs to make haste to conclude their three year case and remedy the on-going and long standing problems in the online marketplace. They need to ensure that more companies across Europe can no longer be harmed by Google and that consumer’s choices are not restricted nor incomes lost, whilst those that have been affected are retroactively compensated.

Regards,

The ICOMP Secretariat

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