Bloomberg reports today that the FTC is reconsidering some aspects of its ongoing antitrust investigation of Google. According to the story, agency officials are not certain of the legal strength of a claim that Google preferences its own products and services over those of its competitors. In addition to the legal hurdle, the officials are trying to figure out if such preferencing actually provides “benefits to consumers” that “outweigh any harm suffered by rivals.”
If this story is accurate, it’s a good sign. Companies like Microsoft, Yelp, Nextag, Foundem, and others have aggressively made their case, flawed as I think it is, not only to the FTC, but also to Congress and in academic and legal circles. The FTC has taken their claims seriously and investigated them. But these competitors have leveled many allegations that are either factually disputed or likely to benefit consumers and could not even amount to a claim under antitrust law.
If the FTC ultimately decides not to advance some claims, it is not for lack of taking allegations seriously. Google’s competitors have had a lot of time to make their case. Having now put it forward, they have revealed just how weak it really is.
Disclosure: As we always note, Google is a client of the firm. We have been retained by the company to advise on these issues. But here I do not speak for the company, only for myself.
Earlier today, the group FairSearch published a blog post outlining potential remedies that the Federal Trade Commission (FTC) should consider in its antitrust inquiry into Google’s practices. FairSearch is a group of companies that complain to regulators that Google’s superior performance is the product of “anticompetitive” behavior. FairSearch members include Microsoft, Expedia, Hotwire, Foundem, and TripAdvisor.
FairSearch’s post today lists behavioral and structural remedies, along with steps for ensuring implementation of these remedies. We’ve written extensively on remedies proposed by FairSearch, refuting over a dozen of them. Google is a client of my firm, but I do not speak for the company, only for myself.
Nonetheless, I want to address FairSearch’s latest offering, though many are recycled without the slightest improvement.
FairSearch’s proposals are, at points, hopelessly vague. I have to guess at the proposals, to some extent, in order to refute them. As a result, this post is more detailed than the one it refutes.
Continue reading →
Paul Rosenzweig at Lawfare has posted a copy of the White House’s proposed cybersecurity order, dated September 28. Despite being over a month old, Rosenzweig suggests this draft is the most recent version, given the presence of provisions related to information sharing identified in recent news reports. You can get a look at the draft, along with Rosenzweig’s thoughts of it, here.
The Search Engine Marketing Professional Organization (SEMPO), a trade association of search and digital marketers, wrote a letter to the FTC yesterday, suggesting that the agency’s review of search transparency practices should not be limited to Google alone but apply to the entire search industry. A full review would promote a “level playing field” for the search market, SEMPO wrote, further noting:
“If the present FTC guidelines on paid placements are being widely flouted, or if certain industry segments - such as vertical search sites – harbor particular practices that mislead consumers, result in fraud, or offer unfair competitive advantage to their commercial customers, the public and the business community deserve to know. “
SearchEngineWatch’s Danny Sullivan made a similar case to the FTC back in June, and we agreed, writing:
In recent years, the FTC has undertaken public workshops to analyze issues — including privacy and the future of the news industry — in greater depth and gather public comment. It ought to do the same with search engine labeling and transparency. The search industry has changed in the past decade and continues to change with integrated results, mobile results, specialized shopping, real estate and local search engines, and voice-activated searches. And perhaps the FTC should be examining these search practices not from the viewpoint of the Competition Bureau but from the viewpoint of the Consumer Protection Bureau.
In an interview with the Wall Street Journal last week, Google Chairman Eric Schmidt called the patent battle between Google and Apple the “defining fight” of the mobile industry. If you want to know more about the implications of this fight, you’re in luck.
Tomorrow afternoon, the Congressional Internet Caucus will host a panel on the topic of whether patents will stifle innovation in the mobile and tablet device markets. Panelists include USA Today’s Rob Pegoraro, George Mason University law professor Adam Mossoff, American University law professor Jorge Contreras, and Marvin Ammori. The event will be moderated by the Caucus Advisory Committee’s Eric Hinkes.
The panel kicks off at noon in the Rayburn House Office building, Room 2226. You can RSVP here.
And here is more information about the event:
You have seen the headlines: Patent litigation continues to roil the exploding smartphone and tablet marketplace with consumers literally caught in the crossfire. Recent high profile smartphone court cases have consumers and policymakers deeply troubled that courts will strangle the incredible pace of mobile innovation and competition. Recent litigation between leading smartphone manufacturers has also caught the attention of Congressional members. The number of smartphone patent lawsuits in multiple countries and jurisdictions around the globe is dizzying and could threaten to keep the best new mobile phones off the market. How will the public be affected by these lawsuits as new mobile devices continue to rollout? Will a competitor force your favorite mobile device off the market?
A diverse set of panelists will tackle important questions including: 1) Can mobile device companies simply innovate around these intellectual property disputes?; 2) Are these constant lawsuits just the natural byproduct of rapid innovation?; 3) Must Congress step in with legislation? The panel will also debate the impact of the recently passed America Invents Act on the smartphone litigation inferno and share their thoughts on what patent issues lie on the horizon in the competitive mobile device space.
At the 2012 State of the Net Conference in January, the Congressional Internet Caucus Advisory Committee facilitated a dynamic discussion on this emerging issue between stakeholders by hosting a focused panel discussion(“Patent Warfare: Will Your Next Smartphone Get Caught in The Crossfire?”) on the then-recently enacted America Invents Act, which sought to reform the nation’s patent laws for the first time in nearly 60 years. Since this panel was convened, the potential effect on innovation has only become more critical, as companies continue spending billions of dollars to acquire massive portfolios of patents through mergers and acquisitions.
Marvin has a piece up on Slate today, in which he argues that the net neutrality debate will take on greater significance as mobile growth explodes and the “Internet of things” continues to evolve. From the article:
Without wireless network neutrality, then companies like AT&T, Sprint, and T-Mobile would have the legal power to block mobile software or mobile devices that want to use their networks to communicate with other devices. The person who makes the chip in your car would need the permission of a mobile carrier; so would the person creating software to allow your iPhone to control all of your appliances. These developers of machine-to-machine devices and software would have increased legal and business costs, and some of them might never see the light of day. It could set back the future, making our world of things less connected.
The Wilson Center is hosting a panel discussion at 12:30 Eastern on cyber threats facing the country, the debates (and stalemate) in Washington over how to respond to those threats, and how best to increase public awareness of and participation in these debates. Panelists include the Wilson Center’s Director Jane Harman, Head of US Cyber Command Gen. Keith Alexander, Sen. Susan Collins (R-ME), and ACLU Executive Director Anthony Romero. You can watch the event live here.