Competition law Stories September 1, 2015

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It seems Google’s legal woes in Europe will never end. The European Commission has long been running an investigation into whether Google was guilty of anti-competitive behaviour in Europe, which finally resulted in a filing of charges in April and a warning of large fines in June. It may be next year – some six years after the investigation began – before the final ruling.

A second anti-trust investigation into Android followed, and a third one not long afterwards, this time into its web advertising business. As if all that weren’t enough, the NY Times reports that a US law firm and European public affairs company have created a joint venture to help companies file civil claims against Google in the event that the EC finds it guilty of the first set of charges …  expand full story

Competition law Stories June 29, 2015

Harvard/Columbia study for Yelp may influence level of European antitrust fines for Google

A study commissioned by Yelp and carried out by two prominent U.S. academics has quantified the impact of Google giving prominence to its own services over organic results, reports the WSJ.

The study’s authors— Michael Luca of Harvard Business School and Tim Wu of Columbia Law School—found that users were 45% more likely to click on results that were ranked purely by relevance, rather than as Google ranks them now, with its own services displayed prominently.

The study of 2,500 Internet users said that the results provided empirical evidence that Google’s promotion of its own services resulted in lower-quality search results for consumers. Google, in contrast, had argued that its own specialist services can provide consumers with more precise answers to their queries.

Yelp was one of a number of companies that filed European antitrust complaints against Google five years ago, leading to a European Commission investigation that has been running ever since – with various attempts by Google to bring proceedings to and end. Some of these were rejected while others were accepted, but the EC finally decided in April to file charges against Google, before being told to expect large fines.

The results of this study may influence the level of these fines.

Photo: AP

Competition law Stories April 14, 2015

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Update: the EU Commission has now filed its complaint

It doesn’t sound good for Google in Europe where the company has faced continued criticism, some comical and some less so, for using its dominant 90+% search share to give advantages to its other properties and squash competitors. FT:

Google will on Wednesday be accused by Brussels of illegally abusing its dominance of the internet search market in Europe, a step that ultimately could force it to change its business model fundamentally and pay hefty fines. Margrethe Vestager, the EU’s competition commissioner, is to say that the US group will soon be served with a formal charge sheet alleging that it breached antitrust rules by diverting traffic from rivals to favour its own services, according to two people familiar with the case.

The NYTimes:

Europe’s competition chief, Margrethe Vestager, is expected to make an announcement that Google has abused its dominant position on Wednesday in Brussels, according to two people who spoke on Tuesday on the condition of anonymity…

“The E.U. competition commissioner, Margrethe Vestager, will decide what steps they want to go,” Günther Oettinger, a German politician who is charge of Europe’s digital economy, told Die Welt am Sonntag, a German newspaper, on Sunday. “I think that they will be far-reaching.”

Google has yet to comment on the matter but if Google fails to rebut any formal charges, Ms. Vestager could “levy a huge fine that could go above 6 billion euros, or $6.4 billion, amounting to about 10 percent of Google’s most recent annual revenue”.

Google stock is off 2 points today.

Image via TNW

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Competition law Stories March 31, 2015

Chair of Senate antitrust panel looking into conversations between Google and FTC

Senator Mike Lee, who chairs the Senate’s antitrust panel, will conduct a “preliminary inquiry” into whether conversations Google had with FTC investigators influenced the commission’s decision to clear the company of anti-competitive behavior, reports the WSJ.

The senator could later expand his inquiry to include conversations people in the White House had with the FTC and Google, people in his office said.

The FTC last week denied that its decision had been “a close call” following leaked documents suggesting that it had been. The documents also provided some fascinating insights into Google’s business model.

Google declined to comment on this latest development, but has previously said that its meetings in the White House were not related to the FTC investigation.

Competition law Stories March 26, 2015

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The Federal Trade Commission has issued a statement denying the WSJ‘s suggestion that the decision to clear Google of anti-competitive behavior was “a close call.”

The WSJ yesterday obtained part of one of the investigative reports, which included a sentence reading “Although it is a close call, we do not recommend that the Commission issue a complaint against Google for this conduct.”

As we stated when the investigation was closed, the Commission concluded that Google’s search practices were not, “on balance, demonstrably anticompetitive.”

Contrary to recent press reports, the Commission’s decision on the search allegations was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.

The FTC describes the WSJ story as “misleading” …  expand full story

Competition law Stories February 10, 2015

Comms chip company Qualcomm fined almost $1B in Chinese anti-trust case

Qualcomm, which licenses 3G and 4G communications patents to smartphone manufacturers, has been fined almost a billion dollars by the Chinese government in an anti-trust case. The company was found to have abused its dominant position in wireless chip technology by charging “unfairly high” licensing fees to manufacturers of smartphones and tablets.

The 6B Yuan ($960M) fine is the largest fine ever imposed on a foreign company, reports the GuardianChina’s National Development and Reform Commission (NDRC) said that the fine was calculated as 8% of Qualcomm’s 2013 revenue in China. China is responsible for around half of Qualcomm’s total revenue.

Chinese regulators said that Qualcomm bundled together patent licenses, forcing Chinese companies to buy unwanted licenses in order to get the core 3G and 4G ones they needed. Qualcomm said that it was disappointed by the ruling, but has agreed to separate out its licenses to allow companies to purchase only the ones they need.

The ruling should reduce costs for Chinese smartphone makers, but it isn’t known how significant the saving may be, and it’s unlikely to show up as a price-reduction for consumers.

Photo: Mike Blake/Reuters

Competition law Stories October 1, 2013

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The European Union’s long-running anti-trust case against Google, in which the search company was accused of using its dominant position in search to stifle competition, looks set to finally be resolved – though we may have to wait until Spring to learn the details.

Reuters reports that Google has made new proposals, which the EU suggests is likely to lead to a settlement.

Joaquin Almunia told lawmakers in the European Parliament he believed the new offer made it easier to see Google’s rivals when making an internet search.

“We have reached a key moment in this case,” Almunia said.

“Now with the significant improvements on the table I think we have the possibility to work again.

“If our investigation of this improved proposal is satisfactory then we will continue the commitments route and end up with a formal decision next spring,” he said, adding: “I think that the settlement route remains the best choice” …  expand full story

Competition law Stories September 9, 2013

Google offering new concessions in EU antitrust case – but neither side saying what they are

The on-going saga of the EU’s anti-trust case against Google, accusing it of using its dominant position in search to block competition, continues with Google making fresh proposals to the Competition Commission.

Google’s initial response was to offer to:

  • clearly separate sponsored links from organic search results, and to link to rival search services
  • allow publishers to choose what content is included in Google’s various search results
  • allow website owners to sell advertising from competitor companies alongside Google ads
  • allow advertisers to manage search advertising campaigns across competing platforms …

After seeking feedback on the proposals from other interested parties (read: Microsoft and others who feel they are unfairly treated), the EU rejected them as not going far enough.

Reuters reports that Google has now offered further concessions, but neither Google nor the EU has yet revealed what these are.

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