Internet Behaviour Examined

June 11th, 2013 by ICOMP Secretariat

The UK’s Office of Communications (Ofcom)

yesterday published a piece of research called “Being online: an investigation of people’s habits and attitudes”, which looks at a number of aspects of online behaviour and examines how citizens and consumers use the internet and interact with online services. The research, undertaken by Ipsos MORI, found overall that people’s attitudes towards the internet and the role it plays in their lives varies widely. This was primarily dictated by their confidence and competence when going online.

Interestingly, one of the key conclusions was that consumers assume that online rights and responsibilities should be the same as those offline. Although participants admitted that this was an assumption on their part. ICOMP has consistently stressed the importance of privacy and security in the online world.

The research also shows that general awareness of what happens to personal data online is quite low and that in fact many people often do not give it much thought. Although participants understood that their details are passed on to 3rd parties, most did not understand the mechanisms of how this happens, and indeed saw it as something that was impossible to prevent. That being said, the results of the research indicated that stories in the media or from friends were key factors in shaping perceptions of who to trust with their personal information online, particularly for those who were less digitally literate.

Furthermore, the research found that “there is a lot of confusion amongst consumers as to what constitutes as ‘safe behaviour’ online. The data shows that that people tend to make subconscious trade-offs between risk and rewards in their online activities. People use very varied strategies for staying safe online, although there is little consensus as to what these strategies should be.” In conjunction, the research shows that many people do not understand how online safety measures worked in concert and therefore often used double standards. For example whilst people may have antivirus software installed on their devices and believe that this provides general security online, they then fail to use verified methods of payment when making purchases, thus leaving themselves exposed to threats.

The Ofcom research shines a light on a number of aspects of consumer behaviour including data privacy, digital rights, consumer security and perceptions of the future of the internet. Indeed it should form a fundamental part of how Ofcom forms its own engagement policy.

The full report can be downloaded here.

Tom Watson MP says that, as users, we all have a stake and a say in the EC’s investigation of Google

June 3rd, 2013 by ICOMP Secretariat

This weekend, an interesting piece appeared in The Guardian from Labour MP Tom Watson entitled Google and competition: as users we can give our own verdict.

Watson welcomes the admission of fault by Google implicit in April’s offer of concessions for market testing – not least because this admission will make things easier for UK claimants bringing private actions for compensation – and applauds the tough stance taken by the Commission to elicit these concessions. However, he also touches on widespread concerns across the online ecosystem that these commitments do not go far enough.

Unfortunately,” says Watson, “the offer presently on the table from Google is unnecessarily long, complicated and legalistic. Closer analysis suggests that it is mostly aimed at watering down the effect of apparent concessions and could even make matters worse. Also, it leaves a lot within Google’s control, which means it could only really be relied upon if Google were a company that could be trusted. Unfortunately, Google’s dealings with other regulators, including the fact that it had to be summoned back to the public accounts committee of the House of Commons because of concerns over the honesty of earlier answers to that committee, cast serious doubt on Google’s trustworthiness.”

Watson closes by heralding what is a “unique opportunity” for stakeholders to have a say in the debate and urges them to do so.

Regards

ICOMP Secretariat

ICOMP submits views on the remedies proposed by Google to the European Commission

June 3rd, 2013 by ICOMP Secretariat

On 31 May 2013, ICOMP submitted its comments to the European Commission in response to the Market Test of the remedies proposed by Google in the Commission’s anti-trust case.  The Market Test is intended to help the Commission assess whether the proposed remedies are effective in putting an end to the anti-competitive conduct which the Commission believes that Google has been engaging in.

In the Commission’s own words:

i.          “Google prominently displays links to its own specialised search services within its web search results and does not inform users of this favourable treatment […] while competitors’ results that are potentially more relevant are less visible and even sometimes not directly visible to users.”

ii.          “[…] [d]ue to the favourable treatment of Google’s own services, consumers are more likely to not make use of potentially more relevant competing services. […]  The Commission is concerned that this practice unduly diverts traffic away from Google’s competitors in specialised search towards Google’s own specialised search services.  It therefore reduces the ability of consumers to find a potentially more relevant choice of specialised search services.  Since Google is an important source of traffic for competing specialised search services, this may reduce competitors’ incentives to innovate in specialised search”.

The Commission has also noted Google’s enduring market shares “well above 90% in most European countries for a number of years” and that the markets for search and search advertising are characterised by “significant barriers to entry and network effects”.  The Commission has expressed its concern that Google’s conduct resulted in “harm to competition with negative effects on consumers, in particular in terms of reduced choice and less innovation.”

Under the EU competition rules companies with very high market shares, such as Google, have a special responsibility not to allow their behaviour to impair genuine, undistorted competition.  This includes not discriminating between its customers or, where the company in questions operates a platform or other facility, providing access to that platform or facility to third parties on less favourable terms to those which it grants itself.

In this case, the Commission has been looking at whether the favourable treatment Google affords its own services in search rankings unlawfully discriminates against its competitors in areas such as price comparison, travel, maps, news etc.

The ICOMP submission contains a detailed legal analysis of Google’s discriminatory practices as well as the standards that any proposed remedies would have to meet in order to be acceptable.  It gives reasons why the remedies proposed would need to end Google’s discriminatory practices and restore effective competition to the critical online markets of search and search advertising.

ICOMP concludes that the proposed remedies do little or nothing to achieve these objectives and that in many ways they could make things worse.  The defects of the proposed remedies are described in detail, and ICOMP has taken the position that they cannot be improved to a point at which it could be said with the necessary degree of certainty that they would be likely to be effective.

The restoration of effective competition is absolutely key to ensuring that consumers are offered a wide choice of online services and that European technology and content companies are incentivised to invest and innovate, to help create growth and jobs.

ICOMP also made a number of other points including that Google’s test results and explanations of the proposed remedies should be made available to third parties, as should the Commission’s preliminary assessment of Google’s behaviour.  ICOMP has also argued that it believes that voluntary remedies are not the most appropriate procedure in this case and that the Commission should proceed with a full in-depth investigation.

ICOMP looks forward to continued cooperation with the Commission on this complex case, the outcome of which is so important to consumers and the wider economy in Europe.

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

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.

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.

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.

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

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.

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.