ICOMP

Following Google’s recognition that its 95% market dominance and business practices on both PC and mobile based services may have harmed numerous companies across the Internet and acceptance of the Commission’s “framework”, ICOMP welcomes today’s announcement that a robust dialogue for resolving the many concerns raised will continue.

Commenting on the announcement David Wood, Counsel, ICOMP, said:

“Google’s acceptance of the Commission’s “framework” and commitment to offer remedies for both PC and mobile based Internet was a hugely significant acknowledgement of their market power and illegal anti-competitive behaviour; we should soon discover whether they are serious about addressing the concerns raised not only by the Commission but also numerous companies over the last few years.

It is now vitally important for the ongoing discussions to ensure remedies which, above all, end the discrimination and manipulation of search results which have had the effect of turning the open Internet into a closed Google Internet. We are confident that the Commission will accept nothing short of the necessary package of remedies that achieve this, are incapable of circumvention and ensure the future development of the Internet to the benefit of entrepreneurs, businesses, consumers and economies across Europe.

Given Google’s history of deliberately impeding and obstructing official investigations, many companies will continue to monitor the process very closely.

As the discussions develop it will be essential that third parties are offered the opportunity to scrutinise the proposals robustly, to ensure they completely rectify the damaged caused by years of unchecked illegal behaviour by Google. The Commission’s investigation has come a long way and to fail at this stage would have further grave consequences for online competition, innovation and consumer choice.”

Google’s conduct is under investigation by regulators across the globe with investigations known to be underway in at least the United States, South Korea, Australia, Brazil, Argentina, and India. In all of these cases, consumers and competitors desperately need Google’s abusive practices to end and be prevented from recurring.

Today’s action is an important step towards addressing these harms and ensuring a diverse and open Internet.  However, a number of questions remain unanswered.  Controlling over 95% marketshare across Europe, Google has long denied any status as a dominant firm in Europe. Does today’s movement into technical discussions indicate that Google is prepared to concede that it is indeed dominant? Furthermore, as Google is being investigated for anti-trust violations in numerous jurisdictions, does this news mean that they willing to modify their practices on a global basis or will this be confined to Europe only?

The weather reports for Northern Europe continue to forecast stormy and unsettled times, coming on top of a record period of miserable wind, rain and cool temperatures. After a pretty awful May and June, it looks like July will be no different. At least this should give us some insight into how Google must be feeling right now.

Two weather fronts continue to batter the Mountain View stronghold of Google. The first relates to the antitrust complaints and investigations the company faces. For the time being, there is no sign that Google has submitted a package of proposals capable of meeting the antitrust concerns of the European Commission. Its failure to publish its recent offer to the Commission looks like a lack of confidence that it can head off the damaging adoption of preliminary findings by the EU that Google has unlawfully abused its dominant market position. At the same time, antitrust investigations in other parts of the world seem to be picking up pace with reports this week noting that the Competition Commission of India has begun to investigate Google’s business practices as well – not forgetting ongoing activity in Argentina and South Korea.

The second weather front battering Google concerns investigations into Google’s aggressive conduct with respect to its customers, competitors and various Government authorities. The most recent of these is the reported fine of $22.5 million to be imposed on Google by the US Federal Trade Commission for having violated the privacy of millions of ordinary people who use an iPhone, iPad or other Apple device through the surreptitious use of cookies.

Not only was this in clear disregard of users’ choices with respect to the use of sensitive personal information, it was an aggressive and hostile act with respect to a leading competitor. It looks like Google was also in breach of promises made to the Federal Trade Commission (FTC) at the time of the Buzz debacle that the company would not misrepresent its privacy practices to users.  (Why would anyone need to make that promise anyway?).

However, once Google’s circumvention of Apple’s Safari browser settings first came to light, Google denied culpability and attempted to explain away its conduct as a “complicated … industry practice.”  Google also claimed that the ad cookies “collected no personal information.”  Neither excuse holds water. Consumers’ information was harvested even while these assurances were made. Yet again Google has been caught red handed in another classic case of Doublespeak.

Although this would be the largest fine ever imposed by the Federal Trade Commission for privacy violations, in order to really make headway it is crucial for other authorities to also draw the conclusion that Google has no real interest in playing by the rules and indeed has actively tried to divert scrutiny away from its activities.

Although increasingly regulators companies and consumers are beginning to peer through this greying veneer. European Data Protection Authorities have opened investigations into abusive privacy practices are with Google being accused of providing “incomplete or approximate” responses in the context of a formal investigation by the French data protection authority. Meanwhile a YouGov survey, released today, noted that market concerns and janusliek behaviour have significantly damaged Google’s brand perception.

Google has also been accused of obstructing investigations by the South Korean competition authorities and the Texas Attorney General.  In April 2012, the US Federal Communications Commission fined Google $25,000 after concluding the company deliberated impeded an investigation into Spy-Fi, the Google project that scooped up emails, passwords and other personal information transmitted over unsecured wireless networks in homes located around the world.

Such behaviour is genuinely unusual. It seems to show not only that Google has the market power to behave as it wants but also a real reluctance, or inability, to comply with the letter of the law and to engage responsibly with Government authorities. It is difficult to believe that each incident is indeed merely a minor misunderstanding or a mistake. Perhaps instead it points towards the very culture of the company, which seems to encourage this dismissive attitude towards both authority and the average consumer.

With Google repeatedly getting caught doing things that damage the reputation of the whole online ecosystem, this can only mean that the stormy weather is set to continue.

Regards,

The ICOMP Secretariat

Earlier this week the Government announced new measures to update the UK’s copyright licensing system. The most eye-catching measure proposed for inclusion in the Enterprise and Regulatory Reform Bill (to be published later this week) will allow the creation of a future “orphan works” scheme to open access to material which cannot currently be licensed or used.

“The measures we plan to introduce,” remarked Business Minister Norman Lamb, “ would make it easier for those seeking access to, and use of, copyrighted works. Freeing up so-called ‘orphan-works’ will allow use of works for the first time, making the most of untapped economic and creative potential.”

Other analysts, however, have been more critical of the proposal, pointing out that it has come about as a result of ardent lobbying by large corporate users of copyright works keen to lower their costs. The result, critics say, will be photographers, illustrators and authors losing their digital rights. Indeed, in a piece for The Register earlier this week, Andrew Orlowski characterises the move, which goes further than the EU’s copyright directive in explicitly allowing broad commercial use, as a “compulsory purchase order but without compensation, across an unlimited range of creative works, for commercial use.”

In practical terms the legislation would enable a new agency to apply to become the licensing authority for a given class of work and then licence any work in the class without the permission of the rights holder for a fee “significantly representative of rights holders affected by the scheme.” Under the rules, the licensor would be under no obligation to return revenue gained to the rights holder if it was unable to find them and the burden would be on the rights holder to ensure they could be found (i.e. keep the licensor updated of its rights to the content).

The potential implications of this are worrying. The more onerous the steps required of content-creators to protect their work, the more meagre the incentive to create and share that work. The Government’s desire to liberate effectively authorless (because the authors cannot be found) works for commercial use is perfectly understandable but it must ensure the orphan is not thrown out with the bathwater. If the Government oversteps the mark between freeing up orphan works and eroding the IP rights of the individual, it may find that the flow of content it is trying to commercialise dwindles along with the market it is seeking to boost.

Regards,

The ICOMP Secretariat

ICOMP welcomes Google’s admission of guilt that their market dominance and business practices have harmed numerous companies across the Internet, distorting competition, harming innovation and restricting the choice of consumers.

Commenting on the announcement David Wood, Counsel, ICOMP, said:

“Despite coming two years late, today’s acceptance of the Commission’s “framework” and possible offer of remedies is a hugely significant acknowledgement by Google of their market dominance and recognition of illegal anti-competitive behaviour. It is vital to ensure that the remedies offered by Google end the discrimination and manipulation of search results that have had the effect of making the open Internet a closed Google Internet. Given Google’s 94% dominance over the European search market, it is imperative that the proposed remedies are incapable of circumvention and will help ensure the future development of the Internet to the benefit of entrepreneurs, businesses, consumers and economies across Europe.
In light of Google’s history of impeding and ignoring official investigations, ICOMP trusts that this is a genuine offer.

Over many years, Google’s dominance in the search market has harmed hundreds of companies who have voiced their concerns that Google’s conduct violated European competition law, distorted competition, curbed innovation, restricted consumer choice and ultimately held back economic growth.

It is essential that the proposed remedies receive vigorous scrutiny not only by the Commission but also by third parties, to ensure they provide full redress for the damage caused by Google’s behaviour and prevent its repetition. Any failure to do so will likely have grave consequences for online competition, innovation and consumer choice.”

Google’s conduct is under investigation by regulators across the globe with investigations known to be underway in at least the United States, South Korea, Australia, Brazil, Argentina, and India. In all of these cases, consumers and competitors desperately need Google’s abusive practices to end and be prevented from recurring.

Today’s acknowledgment of guilt is an important step towards addressing these harms and ensuring a diverse and open Internet.