ICOMP

ICOMP notes the news that the European Commission is continuing with the process of settlement negotiations with Google following a lengthy investigation into well documented allegations that the Internet giant is violating competition law. ICOMP members applaud the rigorous EU approach of binding commitments and market testing, but these eventual remedies must address the issue at hand by being robust and by fully and swiftly restoring competition in search and related markets. It further notes that as yet there is still no formal binding offer on the table.

Although we are pleased that Google continues to engage in negotiations, ICOMP warns that action to arrest on-going harm and provide restitution is urgent. Prolonging negotiation to avoid censure should not be an allowable strategy.

Google faces a series of serious and complex complaints by no fewer than 19 entities across the economy, such as the Association of German Magazine Publishers (VDZ), Streetmap, Hot-Map,  Ciao, eJustice.fr, the Federation of German Newspaper Publishers (BDZV), Foundem, Microsoft and Twenga. Each of the complainants is entitled to have their concerns fully addressed in ways which are effective in the long term and verifiable. Vague and soft commitments by Google are unlikely to be enough to convince these harmed parties that Google’s injury to competition has been remedied.

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

“In principle, news that settlement negotiations have continued is welcome. By doing so, the complaints that Google’s behaviour constituted an abuse of its dominant position in the online search market have been recognised.

For a number of years we have voiced our concerns that Google’s conduct violates European competition law. Google’s behaviour has caused significant harm to numerous businesses across the online ecosystem, stifling innovation and competition, all to the ultimate detriment of consumers and the European economy.

In addition to addressing the four core concerns identified in the Commissioner’s speech in May and restoring competition to the European market, it is vital that the terms of any agreed settlement include measures to quickly redress the harm caused to European businesses and consumers and which are sufficiently robust to ensure that such harm is not repeated. Given Google’s history of non-compliance, any final remedies package must include a robust monitoring mechanism that makes it easy for consumers and companies to notify the Commission of potential violations and for the Commission to investigate and resolve them quickly. We trust that this will prove to be the case and a robust settlement be enforced.

Should a settlement fail to impose stringent measures, Google is likely to continue abusing its 93% dominance of the European search market; heralding grave consequences for online competition, innovation and consumer choice.

Furthermore, Google has a track record of frustrating official investigations and many third parties have had unhappy experiences when entering into negotiations. Complainants and other stakeholders will continue to urge that their concerns are taken into account.

Regulators across the globe scrutinizing Google’s behaviour will observe these negotiations and any final settlement closely with a view to ensuring adequate measures are implemented to further protect healthy online competition in their own markets.”

Rumours have been circulating this week that Google may ‘voluntarily’ make some changes to the way it conducts its search business and thereby avoid any action or indeed even censure from the FTC. Whilst the actual decision of the FTC is still unknown, what is clear is that the situation in Europe is very different.

This news comes as a grave disappointment to the scores of companies that had put their faith in the FTC to protect them from the full brunt of Google’s monopoly power. However it is clear is that the situation in Europe is very different.

Not only is Google’s dominance even higher in the EU countries – in excess of 93% in some – giving it extraordinary market power which simply cannot be ignored, but the case in Europe is not simply Google vs. the European Commission. There are 19 other parties – all complainants that have raised specific, well documented and serious complaints against Google’s abuse of its dominant position. Each of these complaints has rights and each will need to be satisfied that any settlement addresses the issues at the heart of their complaints. As ICOMP member Dan Savage, CEO of Tradecomet.com said, “should the FTC not act it will hand Google a free hand as it continues to increase its dominance of worldwide web. Comparison shopping sites are already on the endangered species list as Google’s own service, Google Shopping, receives increasing prominence on the top half of the first page of search results. This kind of concentration of power has serious consequences in the long run”.

It is therefore very unlikely that Google will escape in Europe with a weak voluntary undertaking to make some changes to elements of its search business.

The FTC and the EC operate under very different legislative frameworks and are dealing with substantially different market realities. The European Commission has an excellent record of winning its cases and bringing effective remedies against abusive dominant players. There is plenty of evidence that demonstrates the harm that Google´s behaviour is causing in the EU and so every chance that a robust set of solutions will be imposed on Google.

However, Google’s track record of obfuscation and avoidance of responsibility make any ‘voluntary’ actions extremely hard to take seriously. As documented in a Senate hearing in September 2011, Google has knowingly disregarded business agreements, making use of its search monopoly to force competitors to fall into line as well as claiming competitor content to be its own. Merely requiring Google to “label” manipulated search results, will do nothing to help consumers or promote competition nor will it truly address the underlying issues at hand. Indeed, if Google will not abide to the terms of a contract then how can regulators trust that the company will abide to voluntary agreements? Furthermore, labelling and other “cosmetic” actions will not address the harm already done to entrepreneurs around the world and equally will not restrict Google from continuing to act belligerently in the future.

We know from its wilful ignoring of the FTC’s Consent Decree on Google Buzz , the many layers of confusion and avoidance connected to the investigations of the SteetView WiFi snooping scandal, the iPhone hacking scandal and the way it implemented its privacy policy in the teeth of criticism from European consumer affairs organisations, that Google simply can’t be trusted to keep to even weak settlements without stringent means of enforcement.

The FTC´s decision should not, therefore, preclude the European Commission from responding robustly to the overwhelming number of complaints and concerns which have been raised against Google over the last two years in Europe. Thousands of European businesses and jobs depend on it.

Regards,

The ICOMP Secretariat

Last week the European commission launched a public consultation in order to help evaluate the overall functioning of the civil enforcement system for IPR across the European Union. This survey will look to help with improving IPR enforcement across europe.

The consultation period itself, having begun on 30^th November 2012 will run until 30^th  March 2013.

Upon its launch the EC stated that, “This technical survey aims at gathering specific information on the efficiency of proceedings and accessibility of measures used in the context of civil enforcement of intellectual property rights. These data will enable Commission to conduct a comprehensive assessment of the functionality of civil enforcement systems put in place in the Member States in order to improve the situation of all the actors active in the innovative sectors of European economy”.

The European Commission’s consultation document explains that, “In particular, this survey is seeking information from stakeholders that participated in civil proceedings concerning infringements of intellectual property rights, namely plaintiffs and defendants, as well as from other parties involved in such proceedings.”

ICOMP welcomes the Commission’s recognition of the need for improved IPR enforcement to help protect content creators and owners across Europe. In the internet space, it is particularly difficult for content owners to enforce their rights at the moment. These difficulties have been recognized by Commissioner Almunia’s ongoing investigation into Google which refers one of four areas of concern being, “the way Google copies content from competing vertical search services and uses it in its own offerings”.

To find out more information about the consultation process, please click here. To register your interest directly with the European Commission in making a submission, please click here.

Kind regards,

The ICOMP Secretariat

Last week saw ICOMP Member, White House being commended at the opening of the European Citizen Award winners’ exhibition, held at the European Parliament in Brussels. White House won a European Citizen Award for its work with the project ‘Colours’, displaying the many ‘Colours of Carinthia’ through the portraits of 50 people who have migrated from 50 different countries to the region of Carinthia in Austria.

The event was well attended by MEPs and politicians and was accompanied by the official handing over of the traditional Christmas Tree to the European Parliament, donated by the state of Carinthia.

The Civic Award 2012 was originally presented to Erich Kugi (co-founder of White House), Franz Tomazic, Karlheinz Fessl, Christian Brandstätter and Lojze Wieser for their work on the project on October 22, by the Vice President of the European Parliament, Othmar Karas.

Karas commended the team that worked on the project by saying: “The EU which we want is one in which people relate to each other, in which they take into consideration each other and support each other. This EU is one in which we listen to each other and ourselves.” Karas continued by saying that the project demonstrates “a different Carinthia’s image as one that often dominates the headlines.”

Vinzenz Stimpfl-Abele, Founder and CEO of White House said: “I am happy that our agency had the opportunity to contribute to this project which is affected by a positive, open and cosmopolitan thinking. And of course I am proud of the excellent job my partner Erich Kugi did. Respect and congratulations to the initiators and supporters of this rightly awarded project.”

Launched in 2008, the award recognizes the European Parliament’s exceptional commitment to a better mutual understanding and integration in the EU. The exhibition “Colours” will be on display in the European Parliament in Brussels from 27 November and can be found online here: www.coloursof.at

ICOMP legal Counsel David Wood was this week interviewed by Twisted Wire’s Phil Dobbie regarding Google’s activities in the online marketplace and in particular, the Australian market. The full podcast can be found below.

The business practices of Internet giant Google were on the agenda of a meeting between antitrust regulators from both sides of the Atlantic

BRUSSELS, Belgium — The ongoing investigations into Google’s business practices were set to be discussed by the chiefs of the U.S. and European antitrust regulators in Brussels on Monday.

The chairman of the U.S. Federal Trade Commission (FTC), Jon Leibovitz, was meeting with his European counterpart Joaquín Almunia for discussions considered crucial for Google’s future following independent antitrust investigations by both regulators. Google is currently in negotiations with both regulators, seeking to reach settlement without the need for lengthy court proceedings which could cost the Internet giant up to 10% of its global revenues in fines, amounting to up to $4 billion.

Both regulators have been examining whether Google abuses its dominant position in search – in Europe, Google command some 90% of all search queries, whilst in the U.S. the figure is around 65% – to its competitive advantage.

The European regulator has already come to the conclusion that Google does indeed leverage its dominant search market share to unfairly promote its sideline businesses in verticals such as news, maps or shopping comparison. It does so by giving its own services preferential treatment on its search results pages, relegating competitive offerings in the process.

Almunia warned Google publicly in September that “in the absence of satisfactory proposals [from Google] in the short term, I will be obliged to continue with our formal proceedings.”

An initial proposal submitted by Google in October to simply “label” its own services on search results pages is understood to have been dismissed by the EU regulator as insufficient.

In the U.S., the FTC has been carrying out a similar antitrust probe over the past 18 months, investigating a wide range of Google’s business practices including the way it displays search results and also the terms of its technology licensing which are considered by critics as anti-competitive.

The FTC is said to be in current settlement talks with Google.

Google’s public comments about the antitrust probes have been sparse. Asked about the discussions between the FTC and the European Commission a Google spokesman said: “We continue to work cooperatively with the Federal Trade Commission and European Commission and are happy to answer any questions they may have.”

Note to readers:
So-called “penalties” which are used by search engines to relegate websites to obscure, less accessible areas of search results are often applied without notification or explanation. These measures typically have a crippling impact on legitimate online businesses. Our “Have I been penalized..?” campaign demands greater transparency surrounding search penalties.

By Marc Pinter-Krainer

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