Factually Challenged Op-ed Insists Google Greed Is Behind FCC's Desire For More Set Top Box Competition

from the Google-ate-my-homework dept

We've noted how the FCC recently voted to bring some much-needed competition to the cable set top box market. Thanks to limited competition consumers still pay $231 annually for what's often garbage hardware -- hardware used to lock consumers inside the increasingly out-dated cable walled garden. As a fact sheet circulated by the agency (pdf) makes clear, the effort will simply involve cable companies delivering their content to third-party hardware using any generally accepted technology and the copy protection of their choice.

But we've also been noting how the cable industry is waging an all out public relations war against the idea. For the moment that war is being brought to bear most notably in the editorial sections of websites and newspapers all over the country, where a rotating crop of individuals -- most hiding their connection to cable industry cash -- have professed that the FCC's plan is everything from an attack on minorities to an invitation to piracy Armageddon. But the most common refrain continues to be that this is all just some kind of villainous plot by Google to freeload off the cable industry.

Why Google? Cable and phone company executives utterly loathe the search giant. Not only because of Google's history supporting net neutrality (though that's wavered in years since) and a general envy of the company's ad revenues (you ain't gonna ride my pipes for free!), but because Google Fiber is now disrupting the broadband space. As such, fighting a pro-consumer, pro-competitive initiative while somehow maligning Google is a perfect day over in cable land, even if the logic supporting these attacks makes absolutely no god-damned sense.

Take this new editorial over at the New York Times as just one such example. It breathlessly proclaims the FCC's plan will somehow "hand our TVs over to Google" and allow Google to "continue its questionable conduct" on other fronts in the TV sector:

"The F.C.C.’s proposal would give Google free access to the raw TV programming data it needs to power its search engine for TV. In effect, Google could use the data to become the modern version of the program guide, connecting users to the TV shows and movies that Google’s search algorithms determine are relevant.

It’s a simple concept: Turn on the TV, search for what you want to watch, scan the results, and then click on a link to start watching your favorite show or sporting event. But Google is missing a key ingredient for its search-centric TV. It lacks access to providers’ proprietary programming information — what shows are available when. Google cannot show a full list of TV programs in its search results without first entering into licensing agreements with cable companies to obtain that data."

That's nonsense. The goal of the FCC's plan is to open up the cable set top box for everybody -- not just Google. And does anybody seriously believe that the one key thing that has frustrated Google engineers is that it can't ascertain what time programs air? No, what frustrates Google -- and every other company with a foot in the streaming box ecosystem -- is the cable industry's vice-like stranglehold over pay TV hardware.

Again, it wouldn't just be Google that received programming data -- it would be every and any company that wants to jump into the suddenly competitive set top box space. And it's not like the cable industry still isn't going to be paid an arm and a leg by consumers to watch TV -- that programming is just going to be delivered by better, faster, cheaper hardware -- with DRM and most everything else still intact. Cable's opposition is, and always has been, about protecting the $21 billion in captive set top rental revenue the cable industry enjoys annually. All other justifications for the industry's opposition are entirely decorative.

And while the reform effort would help any company wanting to build a set top box, Google's missteps are specifically highlighted in painstaking detail over and over again by author Jonathan Kanter, who has spent a large portion of his career not-so-coincidentally helping Microsoft dodge antitrust inquiries at Cadwalader Wickersham & Taft, a law firm also frequently employed by the telecom sector. As such, some of Google's missteps appear to have been somewhat hallucinated by Kanter. Like this claim that Google's MO is to introduce a free product, then "close off competition" through discrimination and exclusion:

"Google is said to have followed the same playbook for years: introducing a free product into a competitive space, subsidizing that product with advertising revenue, and then closing off competition through discriminatory and exclusionary practices."

Uh, citation needed? When has Google ever actually done that last bit? If there's an industry that engages in "discriminatory and exclusionary practices" it's the cable industry the FCC's rules are targeting. You'll note though at no point does Kanter really explain why the FCC's taking action in the first place. Why did the chicken cross the road? Uh, Google! Kanter then trots out a number of just plain wrong history lessons to try and cement what was an already shaky point:

"In April 2015, for instance, the European Commission filed formal charges against Google, saying it rigged search results to favor its own content. Similarly, a Federal Trade Commission staff memo from 2012 revealed that Google regularly favors itself even over better alternatives.

Right, but Kanter ignores that the FTC also found that Google's experimentation was driven in large part to provide a better customer experience, not anti-competitive villainy. Other criticism of Google throughout the editorial is similarly incomplete or conflated:

"Google also seems to favor sites that rely on ads rather than subscription fees, a practice that has cut into news outlets’ profit margins. These kinds of practices starve content providers of revenue and chill investment in content creation.

Except that as a search engine Google can't magically see behind paywalls (and users often don't want to visit those sites anyway), so giving non-paywalled, ad-driven content a priority kind of makes sense. Again though, all of this finger pointing at Google is designed to shift the conversation away from the reason the FCC decided to take action in the first place: the cable industry and its own robust history of anti-competitive behavior, something Kanter just daintily floats over without mentioning it's the reason we're having this conversation in the first place.

No, Kanter's key refrain is that the FCC's plan is all about letting Google take the cable industry's hard-earned work and pass it off as its own. As such, he argues, Google should be heavily regulated before such villainous ambitions can take root:

"If the F.C.C. provides Google with the data it needs to build its search-based set-top, it should take significant steps to prevent Google from continuing its questionable conduct. At a minimum, the F.C.C. should require Google to commit to search neutrality, transparency, adherence to privacy standards and restrictions on anticompetitive bundling."

So wait, just so we're clear, your ingenious solution for the cable industry's aggressive walled garden anti-competitive stranglehold over set top box hardware is -- to regulate Google? And for years we've pointed out that the idea of "search neutrality" is bullshit. Throughout the net neutrality debate it was the cry of a telecom sector and its various policy tendrils, all pretending to be willfully oblivious to why physical, last mile services without competition (broadband) aren't regulated exactly the same as Internet services that users can choose not to use.

And buried under the Op-ed's conflations and bizarre omissions, that's just the thing the editorial intentionally misses -- quite painfully. Increasing set top box competition means that consumers would have a choice of set top boxes. As such, they could choose one that doesn't rely on Google technology if this is really such a concern for them. Of course it isn't -- the great Google set top antitrust albatross is a giant red herring being pushed by cable operators via an endless number of similar editorials. All of them carry the same message: don't open up the stagnant cable set top box market to competition or Google will run away with your daughter and pee on your azaleas.

Again it's a bunch of nonsense intended to misdirect the public from a central truth of the set top box debate: the cable industry is absolutely terrified of losing a central pillar in its quest to ensure cable remains a closed, walled garden ecosystem. Opening the set top box market to competition not only kills $21 billion in captive annual revenues, it suddenly opens the door to cheaper, better, more open hardware platforms -- built by companies with no qualms about pushing traditional cable customers toward alternative streaming options.

Filed Under: antitrust, competition, fcc, innovation, jonathan kanter, oped, open, set top boxes
Companies: google

And Out Come The Wolves: Now Getty Images Files EU Antitrust Complaint Against Google About Image Piracy

from the uh,-why-not-a-copyright-complaint? dept

With the EU making the first big antitrust move against Google in the EU over Android bundling practices (and more still expected over search), it seems that lots of other companies that have had trouble adapting to the internet are coming out of the woodwork to file complaints of their own (well, everyone except Microsoft, which has agreed to drop its complaints -- despite kicking off much of the EU antitrust focus on Google). Last week, we wrote about News Corp. confusingly arguing that Google News was an antitrust violation, because it both linked to its content and because it wouldn't link to its content (don't ask me, I don't understand it either).

Next up? Getty Images complaining about Google Images. According to Time, Getty has filed an antitrust complaint against Google in the EU, apparently arguing that Google's image search is undermining Getty's licensing business and "encouraging piracy."

Photography company Getty Images is accusing Google of scraping images from third party websites and encouraging piracy, adding a new wrinkle to the Mountain View, Calif.’s ongoing legal battles in Europe.

In its complaint to the European Union’s antitrust commission, Getty says Google Images, which displays full-screen slideshows of high-resolution copyrighted images, has hurt the stock agency’s licensing business as well as content creators worldwide. Google first introduced the feature in Jan. 2013. Previously, the search engine only displayed tiny thumbnails of images.

Getty has not actually released the complaint but put out a press release with a few more details and had its General Counsel Yoko Miyashita, post an open letter. The big issue, it seems, for Getty is that three years ago Google made its Images search act a little different, in that you can display full resolution images, rather than just purely thumbnails. Getty claims that this is decreasing the rate of clickthroughs to its site, where it might be able to extract some licensing fees.

Getty, of course, has a troubled history with the internet. It has a pretty long history of fairly idiotic bouts of pure copyright trolling, demanding cash as a bully, often in cases where there was no legitimate infringement at all. We were cautiously optimistic a couple of years ago, when the company finally started experimenting with offering up images for free, via a system that would let you embed many images (though there were some concerns about the setup and conditions).

Reading between the lines, it sounds like that effort has not taken off to the level Getty had hoped... and rather than recognizing that people just aren't comfortable with embedding images from Getty (or that they don't really know about the program), the company appears to be blaming Google Image search. And that's doubly weird since an actual analysis of why Getty's internet efforts haven't taken off shows that it's got nothing to do with Google's Image search and everything to do with cheap stock photo sites and Getty's inability to understand basic search engine marketing practices. Rather than take that to heart and adapt, the company joins many others in just whining about another company that is more successful.

The whole complaint is confusing. Most people searching Google Images aren't going to be licensing a photo in the first place. People who are looking to license a photo go elsewhere. So it's not like Google Images is likely to have a real impact on Getty. But that's not how Getty sees it:

Because image consumption is immediate, unlike other mediums searchable through Google, such as news or music, once an image is displayed in high-resolution, large format, there is little impetus to view the image on the original source site. These changes have allowed Google to reinforce its role as the internet’s dominant search engine, maintaining monopoly over site traffic, engagement data and advertising spend. This has also promoted piracy, resulting in widespread copyright infringement, turning users into accidental pirates.

Of course, this is interesting, because you'll note that Getty isn't filing a copyright case here, it's filing an antitrust case. If this were really about "piracy" why not file a copyright case? It's because Getty knows damn well it would lose any such copyright case. And it would lose badly. So it's filing this antitrust case as a sort of backdoor copyright case, hoping that in the EU's current hatred towards Google, regulators won't pay attention to the nuances.

Getty Images’ General Counsel, Yoko Miyashita says: “Getty Images represents over 200,000 photojournalists, content creators and artists around the world who rely on us to protect their ability to be compensated for their work. Google’s behavior is adversely affecting not only our contributors, but the lives and livelihoods of artists around the word – present and future. By standing in the way of a fair marketplace for images, Google is threatening innovation, and jeopardizing artists’ ability to fund the creation of important future works. Artists need to earn a living in order to sustain creativity and licensing is paramount to this; however, this cannot happen if Google is siphoning traffic and creating an environment where it can claim the profits from individuals’ creations as its own.”

I've read this four times now and none of it makes sense. Again, people searching Google Images aren't looking to license images. Getty is breezily mixing up very different markets because of just how weak its overall argument is here. Also, the whole "artists need to earn a living" bit is similarly misleading. It's a favorite line that comes up over and over again but is bullshit. Most artists don't earn a living doing artwork. That's just a fact. That's true with copyright and without. It's not the copyright that pays people. It's having a good business model that people find worth supporting. That's it.

And, really, if Getty were really in this to help photographers get paid, then why is it so easy to find photographers online bitching about the ridiculously low royalties that Getty Images pays? This isn't about helping photographers get paid. This is about Getty Images and the fact that it hasn't figured out how to make a compelling product on the internet.

And, going back to the way in which Google displays images, it does so because it knows that it's providing a better consumer experience. When people are looking for images online, they want to see the images, and thus Google is delivering what people want. Getty may not like that, because it hoped that Google would fail to deliver what people want, thereby forcing them over to the also terrible Getty Images experience, but it's difficult to see how that's an antitrust issue. If Getty wants to compete, why doesn't it compete? Build a better image search engine and layer its business model on top of it.

But, no, instead, it whines to the EU about "antitrust" and pretends that it's helping photographers, all while making sure they get only a tiny percentage of any money that Getty actually makes from selling their photos.

Filed Under: antitrust, competition, copyright, eu, google images, stock images
Companies: getty images, google

FCC To Ban Charter Communications From Imposing Usage Caps If It Wants Merger Approval

from the throttled-and-capped dept

If you recall, the FCC and DOJ blocked Comcast's acquisition of Time Warner Cable, in large part because of the sheer volume of nonsensical benefits Comcast tried to claim the deal would bring consumers. When Charter Communications subsequently announced its own acquisition of the company, it decided to take a different tack; most notably by taking a more congenial tone with regulators, dialing back the tone-deaf rhetoric and astroturf, and even hiring long-time net neutrality and consumer advocate Marvin Ammori to help seal the deal.

And it's now apparent that Charter's approach paid off. After months of meetings with regulators, both the FCC and the DOJ have announced they intend to approve the deal -- with a few conditions. After Bloomberg leaked word of the looming approval, FCC boss Tom Wheeler issued a statement saying (pdf) that most of the conditions being attached to the deal will focus on preventing Charter from harming Internet video competitors.

According to Wheeler, Charter won't be able to impose caps, engage in interconnection shenanigans, or bully broadcasters into withholding content from streaming providers (something Dish complained about) for a period of seven years:

"In conjunction with the Department of Justice, specific FCC conditions will focus on removing unfair barriers to video competition.

First, New Charter will not be permitted to charge usage-based prices or impose data caps. Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers. Additionally, the Department of Justice’s settlement with Charter both outlaws video programming terms that could harm OVDs and protects OVDs from retaliation– an outcome fully supported by the order I have circulated today. All three seven-year conditions will help consumers by benefitting OVD competition. The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet."

The FCC's ban on usage caps is probably the most interesting or the proposed conditions. The agency has by and large turned a blind eye to usage caps and zero rating of content so far. In part because it was unsure whether or not the courts would uphold the regulator's new net neutrality rules (which should be settled any day now), but also because the FCC has been hesitant to engage in broadband rate regulation. Like net neutrality, usage caps are a sign of a lack of competition in the broadband market, and streaming competitors like SlingTV worried that the Charter merger would simply result in yet another giant like Comcast -- with a vested interest in using the lack of broadband competition to hammer emerging streaming TV evolution.

Granted the conditions aren't all that revolutionary in that while Charter has flirted with usage caps, it currently doesn't impose them anyway. And on the interconnection front, the devil will be in the condition details (the threat of neutrality rule enforcement appears to have solved many of these disputes, for now). Meanwhile, consumer groups like Free Press say they aren't impressed, arguing the debt created by the deal will be passed on to Charter customers in still-uncompetitive markets, one way or another:

"Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute."

And while it's probably true that Charter will just find some other way to impose rate hikes on these subscribers, the conditions are at least an interesting signal from the FCC (and the DOJ, that issued its own statement on the approval) that it recognizes the growing threat usage caps are posing to the future of innovative services. Still, the conditions will be no substitute for real broadband competition, the lack of which a bigger, badder Charter will simply have to find new and creative ways to abuse.

Filed Under: antitrust, broadband caps, conditions, data caps, datacaps, doj, fcc, merger, usage caps
Companies: charter, time warner cable

Just After EU Goes After Google For Antitrust, Microsoft Agrees To Drop All Antitrust Complaints About Google

from the interesting... dept

Back in 2011, Microsoft officially filed an antitrust complaint against Google in the EU. At the time, we noted how silly this was, given that the company itself had spent years battling EU antitrust regulations. It almost felt like a "well, if we had to go through that hellish process, let's put it on Google too..." kind of thing. Within less than a year, Google filed its own antitrust complaint back against Microsoft. As we noted at the time, both claims seemed kind of ridiculous and overblown -- and it bothered us greatly that these companies were resorting to stupid political games, rather than just competing in the market.

So, now, just days after the EU officially took that ball and ran with it, Microsoft and Google have announced that they've buried the hatchet and agreed to drop all antitrust complaints against each other around the globe. They insist this has nothing to do with the EU's move earlier this week. In fact, the writing has been on the wall for some time here. The two companies had ended the patent battle last fall, with everyone dropping all complaints and lawsuits. And, just a couple of months ago there were reports that Microsoft was cutting back on supporting the very coalitions that it had put together and funded: ICOMP and FairSearch.

It had always been obvious and well-known that both groups were Microsoft front groups, and now it's official... and over. According to Re/code:

“Microsoft has agreed to withdraw its regulatory complaints against Google, reflecting our changing legal priorities,” a Microsoft representative said in a statement to Re/code. “We will continue to focus on competing vigorously for business and for customers.”

Google, meanwhile, offered up a similar statement, affirming that it too will withdraw any regulatory complaints it has made. “Our companies compete vigorously, but we want to do so on the merits of our products, not in legal proceedings.”

Of course they could have, and should have, done that five years ago, rather than going through this wasteful process for all involved. The Re/code report suggests a big reason for the shift is the new leadership atop both Google and Microsoft, leading to less animosity and a willingness to work together in some areas and compete directly in the market. It was disappointing that the two ever bothered to focus on trying to dump bureaucratic nightmares on each other in the first place, so it's good that that part is over. However, the antitrust investigations and potential outcomes won't stop just because the companies have stopped supporting them. Once those launched, they'll keep on going.

Filed Under: antitrust, bureaucracy, competition, eu, innovation, truce
Companies: fairsearch, google, icomp, microsoft

News Corp. Claims Google News Is An Antitrust Violation In Europe

from the good-luck-with-that-one... dept

With Google already facing antitrust issues in the EU over Android (and likely over search as well), News Corp has decided to pile on and to file a complaint with the EU Commission claiming that Google News is also an antitrust problem.

News Corp is concerned Google reinforces its dominance in general search by “scraping” or copying content from publishers to display the results of news articles, according to the person. News Corp alleges that if the publisher doesn’t want the content to be copied, Google doesn’t show the articles in the results at all, the person said.

That News Corp hates Google is well known. The company's CEO, Robert Thomson, has a history of barely comprehensible anti-Google rants, based on a confused (i.e. wrong) understanding of how the internet works. Thomson keeps claiming that Google is "stealing" News Corp content by linking people to it and sending the company traffic.

And, again, that seems to be the basis of the complaint here as well. It's difficult to parse what the complaint even means. News Corp "is concerned Google reinforces its dominance in general search by “scraping” or copying content from publishers to display the results of news articles...." Huh? Google indexes the web. That's what it does. That's how search engines work. Is News Corp trying to argue that indexing the internet is illegal? Really? And the fact that it's built a specialized news service -- how is that a problem?

And then the complaint seems to flip over into a complaint that Google doesn't do enough: "News Corp alleges that if the publisher doesn’t want the content to be copied, Google doesn’t show the articles in the results at all." Um, okay. If you don't want Google to index your content, then how can it show the articles in the results? It doesn't have the information to do so.

So what is News Corp's complaint here? First it's that Google indexes their content... and then they complain that if Google doesn't index their content, they won't show up in search results. This makes no sense at all.

Of course, that's because we know what the real complaint here is: News Corp wants Google to give it money. Whatever you might think of the EU's antitrust case against Google in other areas, this argument seems particularly ridiculous and just seems like Thomson and Rupert Murdoch's sour grapes over the fact that Google is a successful company.

Filed Under: antitrust, eu, europe, google news, indexing, robert thomson, rupert murdoch, search
Companies: google, news corp.

EU Officially Goes After Google's Android On Antitrust Grounds

from the where's-the-beef? dept

This was widely expected, but the EU Commission, led by Competition Commissioner Margrethe Vestager, has officially announced that it's going after Google over some of its practices concerning Android. This comes just a day after Canadian antitrust officials went in the other direction, finding no evidence that Google's activities stifle competition. The EU has a few specific concerns about Android:

The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search. First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe. Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems. In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space.

I definitely worry about monopolistic practices by incumbent players crowding out startups and innovation, so I was keen to dig in on the details here, but they seem oddly... lacking. I've noted in the past that the EU tends to view antitrust through a fairly different lens than the US does, and perhaps that's the issue here. This is a broad generalization, but for the most part, the US focuses on whether or not practices harm consumers. The EU tends to focus on whether or not a company is really big. I think the US standard makes a lot more sense.

Let's dig in to the specific complaints raised by the EU, saying each of these practices violated antitrust laws:

requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;

Many people have compared this to the case against Microsoft from the early 2000s, in which it got dinged for making Internet Explorer the default. Of course, a quick retort on that is: where is Internet Explorer in the browser market today? It's basically a non-entity, and it wasn't because of any antitrust penalties (which were basically wrist slaps). And, either way it appears that the issue here with Google is that it requires all of its core services to be bundled together: so if you want to offer the Google Play Store, then you have to also offer the other pieces of the Google app suite so that they work well together. But, of course, this also doesn't stop phone makers or service providers from adding their own apps as well. I now have a bloat-free Android phone running Cyanogenmod, but back when I had a Samsung S4 on Sprint, it came with a ton of bloatware from both Samsung and Sprint (and, frankly, all of it was useless and annoying).

Perhaps there's an issue with making Google search the default, but is anyone actually harmed by having Google's search as the (easily changed) default on an Android phone? It certainly seems like Apple's iOS ecosystem is a lot more restrictive. At least with Google you can route around Google's app store and sideload apps easily or use alternative app stores. I frequently use Amazon's app store, for example.

preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;

This is the one prong (out of three) that at least seems worth investigating more. I can understand Google's position -- that if you're offering Google's suite of apps, you need to offer Google's version of Android to make sure everything works together well -- but this seems like an unnecessary condition for Google to include in those agreements. The simple fact is that most manufacturers are likely to want to go with a stock Android anyway, and just pile on their own customizations and bloatware. In most cases, there isn't going to be that much desire for manufacturers to use an Android fork. But, if they do... so what? I don't really understand why Google prevents manufacturers from choosing to offer different flavors of Android, but I'm also not sure that this is an antitrust issue.

giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

This one probably confuses me the most. This is just a business deal for installing software on phones. For years, Google paid Mozilla to be its default search in Firefox, and then Yahoo outbid it to become the default. That's how business works. Google isn't leveraging its market position here -- it's just doing a deal. The EU claims that its issue is "not with financial incentives in general but with the conditions associated with Google's financial incentives, in particular with the condition that the financial incentive is not paid if any other search provider than Google Search is pre-installed on smart mobile devices." But... isn't that the nature of the deal? If you're doing a business deal to be the exclusive search provider, then, shouldn't you be the exclusive search provider?

It will obviously be worth watching how all of this plays out. The EU has made it clear for a while that it has it in for Google, so if I had to predict, this process won't go well for Google.

Frankly, if I were Google, I probably would have dropped a lot of the exclusivity requirements. I know they're in a race to see who will get access to the most data, but let the apps and services compete and see who wins out. Google's app ecosystem does well because it tends to be pretty good. Google could have avoided at least some of this fight by just trusting its own services to win out, rather than pushing for certain defaults and exclusivities. Some others have made this point as well:

I'm pretty sure Google can survive and come out the winner. The best of its products -- that ones that have the most users -- are excellent. People won't stop using Google Maps just because it isn't preinstalled on their phones. It's among the top 10 most downloaded applications in Apple's App Store because iPhone users often prefer it to Apple's own map software. Chrome is in the top 100 most downloaded apps even though it's impossible to change the default browser in iOS from Apple's Safari without "jailbreaking" the device to untether it from Apple support.

Google's search engine, too, wouldn't be dominant if it didn't index more pages than competitors and produce better results. YouTube is a must-have app, while Google's cloud office services are free, unlike, say, Microsoft's, and they work just as well.

These are great, competitive products. They don't really need the extra push from restrictive deals between Google and phone manufacturers. Google's brand name is strong with those who buy Android phones, and, given a choice, they are likely to prefer Google products rather than spend time researching alternatives. The company may need to spend a bit more on advertising its products in a free-choice situation, but that won't break the bank because the apps are already hugely popular.

But what Google should do, and what the EU should force it to do, are different questions. I'd much prefer that Google take a more open approach to these things, but I'm not convinced that we want bureaucrats deciding for the company exactly what Google's approach on the mobile phone should be.

Filed Under: android, antitrust, bundling, defaults, eu, eu commission, margrethe vestager
Companies: google

UK Court Tells Online Mapping Company It's Not Illegal For Google To Also Offer Online Maps

from the it's-called-competition dept

It's still somewhat strange to me to see how badly some companies react to basic competition. Yes, sometimes that means companies lose, but it doesn't automatically make any and all competition unfair. An online map company, StreetMap.Eu sued Google a few years ago, claiming that Google's entrance into the online mapping world, and specifically including maps in search results, was unfair competition. However, the UK High Court has now, rightfully, rejected such a claim. The basis of the ruling seemed rather straightforward:

But the judge ruled that the introduction by Google of the new-style Maps OneBox in 2007 was "not reasonably likely appreciably to affect competition in the market for online maps".

The judge added that, in any event, Google's conduct was " objectively justified".

StreetMap's director Kate Sutton, however, is insisting that the company will appeal and says the whole thing is "unfair."

"The decision is unfair for small businesses," Sutton said, and added that StreetMap would attempt to appeal against the judgment, which found that Google's search dominance had not directly harmed competition in the UK's online mapping market.

I'm kind of curious what Sutton thinks is the appropriate remedy here: that no larger company should ever be allowed to offer services useful to consumers, which might somehow be "unfair" to smaller competitors? I'm a huge supporter of more competition in innovative services, but that should be driven by what's best for consumers, not what's best for small companies. Besides, plenty of small companies figure out how to innovate and take on large companies. The fact that her company has chosen not to do so is not Google's fault. Hell, Google itself, when it showed up entered a very crowded market and was laughed at for being such a small player in a market dominated by established companies. And what happened there?

Filed Under: antitrust, competition, consumer benefit, fairness, innovation, online maps, uk
Companies: google, streetmaps

BMI Records Record Revenue... While Whining To DOJ That It Can't Function Under Antitrust Agreement

from the something-doesn't-add-up-here dept

As we've been discussing, the two big music collection societies in the US, ASCAP and BMI, are desperately fighting to get the DOJ to alter (or end entirely) the "consent agreement" that they operate under. The consent agreement, in various forms, has been in place for decades, after the DOJ properly recognized that in licensing songwriters' and publishers' public performance rights, they had something of a monopoly. And monopolies can be dangerous when abused. Thus the consent decree to keep the organizations in line. However, both are really angry about this, in large part because they believe that without the consent decree, they could create a world in which they could force everyone to have to pay much higher fees (you can see some of how they tried to collude with publishers to jack up rates to Pandora).

So far, the attempt to get rid of the consent decree has not been going well. It has resulted in more investigations into the publishers for collusion for one thing. The DOJ has also apparently realized that the collection society's treatment of songs with multiple copyright holders may be another anti-trust violation.

And, yet, ASCAP and BMI keep trying to convince everyone that they're suffering under this "obsolete" consent decree, and they need to have it modified greatly. BMI, in comments to the DOJ, has claimed that it's suffocating under the current system, which it says is "broken":

The digital revolution in information processing and communications has completely transformed the way music performances are heard by the public and equally changed the way in which information about music performances is collected and processed. In particular, the rise of Internet streaming as a principal way the public hears performances of music has created market needs that are now not being met because of inefficient and anticompetitive restrictions in the BMI consent decree that serve no sound purpose today.

There is an urgent need for action now. BMI agrees with the Register of Copyrights’ recent testimony characterizing music licensing as “broken,” and certain aspects of the BMI consent decree have contributed to that breakdown. The decree creates rigidities and restrictions in the way BMI must operate that undermine BMI’s efficiency as a resource for both music users and music copyright owners in the digital world. The existing rate court mechanism has proven too slow, too expensive, and too legalistic to keep up with the speed of change in real-world markets today. The need is so dire that, rather than press for comprehensive reform at this point, in these public comments BMI urges the Department to prioritize particular changes that address these immediate needs.

Things must really suck for BMI and all the songwriters who get paid via BMI, right? Oh... wait. BMI has just announced a new record in revenue collection and pay out to artists.

BMI, whose full name is Broadcast Music Inc., collected $1.013 billion for the 12 months that ended in June, up almost 4 percent from the year before. That is slightly more than the $1.001 billion that its competitor Ascap took in last year.

In the number that will be scrutinized most closely by musicians — royalties — BMI paid slightly less than its rival. After deducting its operating expenses, BMI distributed $877 million to its thousands of members, including songwriters like Taylor Swift, Nile Rodgers and Adam Levine of Maroon 5. Last year, Ascap paid its members $883 million.

Why is it paying less than ASCAP? BMI doesn't blame the broken consent decree, but rather "significant legal costs" made up mainly of its lawsuit against Pandora. In other words, something that BMI had control over. The article also notes this little fact:

Since 2005, BMI’s collections have increased about 40 percent.

So, uh, can we hear again about how "dire" the situation is and how BMI can't function, even as its revenue has grown 40% in the last decade and it's setting all kinds of new records? Did BMI think the DOJ would just ignore that bit?

Filed Under: anti-trust, antitrust, collection societies, consent decree, doj, pros, publishers, revenue, songwriters
Companies: ascap, bmi

As India Goes After Google, A Simple Question: Do You Really Want Governments Deciding Search Results?

from the just-asking dept

Earlier this year, European antitrust authorities went after Google (hours after EU officials announced plans to harm American internet companies to "help" local internet companies). Google just last week responded to the initial claims, saying that "improving quality isn't anti-competitive." Of course, the more detailed response is still private, so we don't know the full extent of what's being discussed. And, now, it appears that India is going after Google based on similar charges, claiming that it somehow leverages its own position in rigging either search results or putting its own services ahead of competitors above the search results.

Based on the responses from 30 businesses spanning search, social networks, ecommerce, travel and content sites, the CCI director-general last week filed a report that accuses Google of abusing its dominant position to rig search outcomes, both the actual search result as well as sponsored links. This marks the first case globally where an antitrust body is formally raising such charges against Google.

It's a bit surprising to see Facebook apparently take part in this effort, because it can't be long until it's receiving similar scrutiny around the globe for its position in the social networking space. The article is a bit confusing, but from it, there seems to be a mishmash of different accusations, some of which are more nutty than others. The key one -- which is at the heart of the claims in the US and in Europe -- is that for certain searchers, Google puts its own services first, before the "organic" search results. So, for example, if you do a search on something local, it would show you Google's local information (built on top of Zagat's info) rather than a competing rating service. Or, it may highlight Google Maps over some competitor.

At least one company, Flipkart, appears to claim that its own "organic" search results depend on how much the company spends on buying ads on the site. Companies make this claim all the time and there has never been the slightest bit of evidence to support those claims. If any such evidence comes out, then that would be a serious issue, and Google should have to answer for it. However, given how frequently it's been shown to be baseless, it seems unlikely that Google is actually polluting its organic search results based on a company's advertising plans (in fact, Google has made it pretty clear that the folks who handle the search algorithm have absolutely no insight into the advertising side of the business).

The claims about Google promoting its own services (maps, local, flights, finance, etc.) over competitors still seems like a weird one. Promoting those so-called "one box" results, is (as the company has claimed) providing more useful services. You can see why other companies may get upset about it, but is there any actual consumer harm? That seems a lot harder to find.

The only argument I've seen that makes any sense at all in all of these accusations is that Google could present better results in its onebox area if it made use of its own internal algorithm (which conceivably could determine that another company's services rank better than Google's). But as we've said in the past about that exact suggestion: even if Google should make that change, it is really the government's job to determine what is "the best" way to present search results?

I have a lot of difficulty believing that bureaucrats in either Brussels or Mumbai are somehow going to have a better idea how to provide the best possible search results for consumers, than the folks at Google who spend all their time working on these issues. Instead, this seems like companies who are upset that they don't rank well enough in Google complaining, because Google is big. If Google is actually shown to be doing something that actively harms consumers, that's one thing. But all of these complaints still seem to rest on companies (not consumers) bitching that they don't like how high they rank in Google. Well guess what? I don't like how Techdirt ranks in Google either, but I don't go running to the government to complain about it.

Filed Under: antitrust, india, regulators, search, search engines
Companies: facebook, flipkart, google

Authors Guild Cements Reputation As Luddites: Hates The Internet And Especially Amazon

from the fighting-against-the-future dept

The Authors Guild has something of a reputation for being anti-innovation, anti-technology, anti-future and anti-consumer. It's also anti-small author. And it appears to be flexing its lobbying muscle this week to make all of this clear. It starts off with a move to ask for a dangerous idea in copyright reform, asking the House Judiciary Committee to implement a "notice and staydown" provision in any revamped copyright law. Just last year we warned people that "notice and staydown" was the way in which the legacy copyright industry extremists were looking to rebrand SOPA, and it has quickly become the preferred language of those looking to expand copyright and to attack innovation online.

The Authors Guild letter is ridiculous beyond belief. It starts off with the usual whining about poor, poor authors unable to make a living any more.

We are writing to ask you to make certain much-needed changes to the Copyright Act to help curtail Internet book piracy. Writers' income is in steep decline. There are many reasons for this, but a decrease in copyright protection and the aggregate effect of Internet piracy play an important role: the entire publishing industry loses $80 to $100 million to piracy annually, according to a 2012 estimate by the Association of American Publishers. Meanwhile, a recent Authors Guild survey shows that approximately 67% of our authors earn less than the poverty level from their writing, with median writing-related income at $8,000, down 24% since 2009, when e-book sales started to take off.

Books provide an essential contribution to our society. Most authors don't expect to get rich from what they do: they write to inform, educate, and entertain, and in doing so add to our common store of knowledge and culture. But to keep writing, they must be able to support themselves and their families. This has become increasingly difficult in the digital age.

Notice how, like the music and movie industry's before them, the Authors Guild immediately attacks online file sharing as if it must be the cause, ignoring all possible alternatives. In the book space this is particularly ridiculous, because the lowered barriers to entry from the internet means that many authors can now be published when that wasn't a possibility before. The number of ebook authors has exploded. Perhaps -- just perhaps -- rather than blaming "piracy" for the difficulty the elite club of the Authors Guild has, they might recognize the law of supply and demand, and recognize that the greater competition means that the monetary spend on the written word has been spread more widely. That's allowed lots of brand new authors to make a living from their writing, despite being passed over by the traditional publishers.

And, yes, many do not make a living, but that has always been the case. I know many people who have written books, and even those who have tried to "make a career" of it. And most don't. It's just not that easy to make a living as a book writer, and it's not because of piracy. As authors like Paulo Coehlo have found, file sharing can help authors build a larger audience and to make more money in the long run, if they learn how to embrace their fans, rather than actively push them away, like the Authors Guild often does.

Online book piracy, once the province of shady offshore websites, has migrated to mainstream American distribution platforms. Our "Notice and Takedown" system is completely inadequate to combat this problem. What we need instead is a "Notice and Stay-Down" regime: once a webhost knows a work is being infringed, it should not receive continued "safe harbor" immunity from claims of infringement unless it takes reasonable measures to remove all copies of the same work.

As we explained last year, this is one of those ideas that copyright holders love, because they don't understand copyright law in the slightest, or how any such system would inevitably work. The main problem is that copyright is context specific. Identical copies could be infringing or not infringing, depending on context. For example, remember when Viacom sued YouTube over video clips that Viacom itself had uploaded? A "notice-and-staydown" provision takes away the context and with it plenty of non-infringing works as well.

The Authors Guild also argues that it's somehow easy for companies to automate all this:

ISPs, on the other hand, do have the ability to monitor piracy. Technology that can identify and filter pirated material is now commonplace. It only makes sense, then, that ISPs should bear the burden of limiting piracy on their sites, especially when they are profiting from the piracy and have the technology to conduct automated searches and takedowns. Placing the burden of identifying pirated content on the individual author, who has no ability to have any real impact on piracy, as the current regime does, makes no sense at all. It is technology that has enabled the pirate marketplace to flourish, and it is technology alone that has the capacity to keep it in check.

This is just wrong on so many levels. First, if the Authors Guild is so worried about big companies, a policy like this makes them more entrenched. Even if we were to accept the Authors' Guild's faulty claim that these tools actually work (they don't), the argument that tech companies now have easy access to these tools is also not true. Big companies have access to these tools. But the next generation of startups do not. Thus, this policy would leave Amazon and Google in charge and block out any new company. Is that really what the Authors Guild wants?

Second, these systems don't work. We point out false takedowns on YouTube via ContentID all the time (and frankly we don't write about most of the ones that we see). Advocating a filter that will inevitably lead to greater censorship is a ridiculous position for the Authors Guild to be taking. And, by then putting legal liability on tech companies if they don't do this makes even worse, as it will only create more incentives for the tech companies to over censor to avoid any possible liability.

There's a reason why the burden does not belong on the intermediaries and it's pretty straightforward: the intermediaries don't know if it's infringing. That's something that only the copyright holders can legitimately determine. That's why the system requires notice from the copyright holders.

The purpose of copyright is to encourage the creation of new works--including and especially literary works, which contribute so greatly to our nation's store of knowledge and culture. To continue to work effectively, US copyright law must provide meaningful protection against the widespread online piracy of books and journals, so that authors can afford to write them.

Actually, the purpose of copyright is to "promote the progress" of learning and education, and it's supposed to do that in two parts: one by creating incentives for new works, but also to then benefit the public by increasing distribution of those works. And, we're already living in a golden age with more books being written and published today than ever before. To argue that ebook piracy has somehow taken away the incentive to write... well, the evidence just suggests that's wrong. And, again, most authors never make much money at all. To complain that authors don't make enough is a different issue altogether and has little to do with copyright.

Of course, the Authors Guild didn't stop there. Also this week it went on the offense against Amazon, asking the Justice Department to investigate Amazon for antitrust violations -- even though the DOJ already looked into Amazon's practices and found them to be fine (instead finding Apple had violated antitrust law in colluding with publishers to raise ebook prices). But, don't mind the details, the Authors Guild is sure Amazon is to blame. According to the Authors Guild, the fact that consumers benefit from lower book prices shouldn't let Amazon off the hook.

Without commenting on the outcome of the Apple case, or the facts that led the majority to its conclusion, we'd like to point out the long-term dangers of interpreting antitrust law solely to favor low book prices over a thriving competitive and robust literary marketplace.

Yes, how dare you focus on the actual benefits to consumers, DOJ!

A related letter from "Authors United," again seems to attack Amazon for daring to offer good prices to consumers, as if that's some sort of horrible antitrust violation.

Personally, I think it would be great if there were more competition in the ebook space, though we have seen it start to expand, with Apple, Google and others entering the market. But, the reason those companies (despite their own market power) have had trouble making a real dent in the market is because people really like Amazon. Amazon does a pretty good job making it easy and convenient to buy ebooks, to read reviews, to find similar works, and -- of course -- to read the ebooks as well. It would be great if there was more competition -- and that it would lead to lower prices, better features and less DRM. I'd be all for it. But that's not what the Authors Guild is arguing for. They don't want an open marketplace. They don't want competition. They want higher prices and less competition from the riff raff authors who aren't signed to big publishers and aren't members of the Authors Guild.

It's not hard to see the consistent logic behind all of this. The Authors Guild doesn't like the internet at all. It used to have a good thing in the old days, pre-internet. It could keep out the riff raff, anoint authors as the chosen ones, and make money off of those few giant authors. These days it's much harder and there is a real marketplace. The Authors Guild can't compete, so it runs to the government to "fix" things. It attacks internet companies like Google and Amazon not because they're doing anything unfair, but because they're actually bringing real market economics to the market for books. And the Authors Guild can't allow that to to continue.

Filed Under: antitrust, authors, books, copyright, dmca, intermediary liability, notice and staydown, notice and takedown, writing
Companies: amazon, authors guild, google