Archive for the ‘Online Marketplace’ Category

Internet Behaviour Examined

Tuesday, June 11th, 2013

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.

ICOMP announces Mediaset as new member

Friday, May 10th, 2013

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

Thursday, May 9th, 2013

 

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.

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

Wednesday, April 24th, 2013

“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

Wednesday, April 24th, 2013

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

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

Monday, April 15th, 2013

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.

Google’s Offer Requires Robust Market Test

Thursday, April 11th, 2013

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.

Momentum Builds Across Europe as BEUC Joins EC Investigation

Monday, March 25th, 2013

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

Complainants to Commission: “only sanctions will reinstate competition”

Friday, March 22nd, 2013

Today, eleven 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.

The signatories to the letter, which included ICOMP Members Foundem, Hot Maps and Streetmap, voiced concerns that any settlement agreement would not sufficiently address the issue of how Google ranks competitors in its search results.

“There are two equally important aspects to Google’s search manipulation practices,” says the letter: “the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services. Any effective remedies will require explicit commitments to end both aspects; remedying one without remedying the other would simply allow Google to recalibrate the un-remedied practice in order to achieve the same or equivalent anti-competitive effect.”

The complainants said that the overarching principle would ensure a permanent restoration of competition is that Google must be even-handed. “It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.”

Commissioner Almunia’s statement at the end of January of his “conviction” that Google “are diverting [search] traffic,” was encouraging to complainants and the online marketplace at large. “They are monetising this kind of business,” he told the Financial Times, “the strong position they have in the general search market and this is not only a dominant position, I think – I fear – there is an abuse of this dominant position.”

Since these comments, however, Google has proposed a remedy package which the Commission is currently considering. The contents of this settlement have not yet been shared but complainants fear that it will not deal with allegations that Google forcibly demotes rival sites through penalties, a concern amplified by Google’s past conduct which “suggests that it is unlikely to volunteer effective, future-proof remedies without being formally charged with infringement.

Additional to Google’s illicit business practices is the enormous advantages of scale it has used them to amass; advantages which, for example, enable it to cross-subsidise loss-leading services using its advertising revenue in order to undercut competitors. It is almost inconceivable that a remedy package from Google would address this point. This is another reason why complainants are saying that nothing short of an official sanction will save online competition. ICOMP calls upon the Commission to listen to the marketplace and act on its advice.

Against the Goliaths of the online marketplace the law must stand behind David, says Reding

Wednesday, March 20th, 2013

Yesterday the European Commission’s Vice President Viviane Reding addressed the EU Consumer Summit on the issue of enforcement.

Ms Reding reaffirmed the vital importance of consumer defences, particularly in times of economic crisis, saying that consumer spending accounts for 56 per cent of the EU’s GDP but that its full potential could only be tapped once consumers were given the confidence to shop across EU borders. This confidence, said Reding, has to stem from consumer rules which “protect David when he is negotiating with Goliath.”

The Vice President went on to say that “strong rules become weak when they can be disregarded with impunity” and that therefore, the Commission needs to take a more prominent role in monitoring and coordinating enforcement of these rules, in particular by:

  • Making use of the Unfair Commercial Practices Directive to improve consumer welfare;
  • Simplifying internal procedures and strengthening deterrents within Member States; and
  • Ensuring information supplied to consumers about legal rights and warranties is accurate.

One area specifically mentioned by Reding as a market where consumer vulnerability continues to be exploited is the online sphere – a problem about which ICOMP has spoken extensively.

The behaviour of today’s digital “Goliaths” is all too often inimical to the interests of consumers. Taking, for example, the issue of privacy, consumers are often given little or no indication of the policies which apply when they use online services and have scant recourse when they feel their concerns have been ignored. As the number of ongoing multijurisdictional privacy investigations will attest – certain dominant online service providers clearly recognise no existing deterrent to their infringement of consumer privacy rights.

Ms Reding makes an important point when she says that it is up to the Commission to enforce the rights of the consumer and that this needs to extend beyond the high street. ICOMP Director Auke Haagsma said “Ms Reding is right that the Commission cannot sit on the side-lines when rules are disregarded.  We welcome her determination to ensure that these protections are  extended to the digital marketplace.”