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Paul Merrell

EU unveils landmark law curbing power of tech giants | News | DW | 15.12.2020 - 0 views

  • The European Union unveiled landmark legislation on Tuesday that lays out strict rules for tech giants to do business in the bloc. The draft legislation, dubbed the Digital Services Act (DSA) and the Digital Markets Act (DMA), outlines specific regulations that seek to limit the power of global internet firms on the European market. Companies including Google, Apple, Amazon, Facebook and others could face hefty penalties for violating the rules. EU antitrust czar Margrethe Vestager and EU digital chief Thierry Breton presented the draft on Tuesday, after the content of the new rules was leaked to the media on Monday.
  • What's in the draft laws? The dual legislation sets out a list of do's, don'ts and penalties for internet giants: Companies with over 45 million EU users would be designated as digital "gatekeepers" — making them subject to stricter regulations. Firms could be fined up to 10% of their annual turnover for violating competition rules. The could also be required to sell one of their businesses or parts of it (including rights or brands). Platforms that refuse to comply and "endanger people's life and safety" could have their service temporarily suspended "as a last resort." Companies would need to inform the EU ahead of any planned mergers or acquisitions. Certain kinds of data must be shared with regulators and rivals. Companies favoring their own services could be outlawed. Platforms would be more responsible for illegal, disturbing or misleading content.
  • Following the announcement on Tuesday, US internet giant Google criticized the draft legislation, saying it appeared to target specific firms.  "We will carefully study the proposals made by the European Commission over the next few days. However, we are concerned that they seem to specifically target a handful of companies," said Karan Bhatia, the vice president of government affairs and public affairs at Google. Facebook appeared to offer a more conciliatory tone, saying the legislation was "on the right track."
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  • The draft still faces a long ratification process, including feedback from the EU's 27 member states and the European Parliament. Company lobbyists and trade associations will also influence the final law. The process is expected to take several months or even a year.
Paul Merrell

Press corner | European Commission - 0 views

  • The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers. The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition.  Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair.  Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
  • Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers. As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees. The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers. The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
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    "In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called "fulfilment by Amazon or FBA sellers"). In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the "Buy Box" and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services. The "Buy Box" is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the "Buy Box" (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users. If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position. The Commission will now carry out its in-depth investigation as a matter of priority"
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    On the filed charges, the violation seems to be fairly clear-cut and straightforward to prove. (DG Competition has really outstanding lawyers.) I suspect the real fight here will be over the remedy.
Paul Merrell

EU files antitrust charges against Amazon over use of data | The Seattle Times - 0 views

  • European Union regulators filed antitrust charges Tuesday against Amazon, accusing the e-commerce giant of using its access to data from companies that sell products on its platform to gain an unfair advantage over them.The charges, filed two years after the bloc’s antitrust enforcer began looking into the company, are the latest effort by European regulators to curb the power of big technology companies. Margrethe Vestager, the EU commissioner in charge of competition issues, has slapped Google with antitrust fines totaling nearly $10 billion and opened twin antitrust investigations this summer into Apple. The EU’s executive Commission also opened a second investigation Tuesday into whether Amazon favors product offers and merchants that use its own logistics and delivery system.
  • The EU investigation found that Amazon is accessing and analyzing real-time data from other vendors that sell goods on its platform to help it decide which new products of its own to launch and how to price and market them. That “appears to distort genuine competition,” Vestager said.Investigators focused on that practice in France and Germany, the company’s two biggest markets in the EU, but Vestager didn’t give specific examples of merchants affected by Amazon’s behavior.The stakes have risen for retailers as many European countries have shut nonessential shops temporarily to try to contain the coronavirus pandemic, pushing more shopping online, where Amazon is a major presence. Advertising Skip AdSkip AdSkip Ad Amazon faces a possible fine of up to 10% of its annual worldwide revenue. That could amount to as much as $28 billion, based on its 2019 earnings. The Seattle-based company rejected the accusations.
Paul Merrell

The EU's White Paper on AI: A Thoughtful and Balanced Way Forward - Lawfare - 0 views

  • On Feb. 19, the European Commission released a White Paper on Artificial Intelligence outlining its wide-ranging plan to develop artificial intelligence (AI) in Europe. The commission also released a companion European data strategy, aiming to make more data sets available for business and government to promote AI development, along with a report on the safety of AI systems proposing some reforms of the commission’s product liability regime. Initial press reports about the white paper focused on how the commission had stepped back from a proposal in its initial draft for a three- to five-year moratorium on facial recognition technology. But the proposed framework is much more than that: It represents a sensible and thoughtful basis to guide the EU’s consideration of legislation to help direct the development of AI applications, and an important contribution to similar debates going on around the world. The key takeaways are that the EU plans to: Pursue a uniform approach to AI across the EU in order to avoid divergent member state requirements forming barriers to its single market. Take a risk-based, sector-specific approach to regulating AI. Identify in advance high-risk sectors and applications—including facial recognition software. Impose new regulatory requirements and prior assessments to ensure that high-risk AI systems conform to requirements for safety, fairness and data protection before they are released onto the market. Use access to the huge European market as a lever to spread the EU’s approach to AI regulation across the globe.
Gonzalo San Gil, PhD.

European Commision vs Microsoft: chronology of the case - 1 views

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    "1998 Sun complains to the EC on Microsoft's dominant position as a supplier of operating systems for personal computers. 02/2000 EC launches investigation on Microsoft's anti-competitive conduct ("Case No. COMP/C-3/37.792"). Two main issues are under investigation: (1) lack of interoperability information, and (2) incorporation of Windows Media Player with the Windows operating system."
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    EC v. Microsoft was a landmark advance in the law governing software interoperability. In the preceding case in the U.S., the courts refused to set a standard for the degree of "compatibility" that Microsoft would have to provide competitors. Forewarned, the DG Competition prosecutors had done their homework. Commission v. Microsoft, No. T-167/08, European Community Court of First Instance (Grand Chamber Judgment of 17 September, 2007), para. 230, 374, 421, http://preview.tinyurl.com/chsdb4w (rejecting Microsoft's argument that "interoperability" has a 1-way rather than 2-way meaning; information technology specifications must be disclosed with sufficient specificity to place competitors on an "equal footing" with Mictrosoft's own software in regard to interoperability; "the 12th recital to Directive 91/250 defines interoperability as 'the ability to exchange information and mutually to use the information which has been exchanged'").
Gonzalo San Gil, PhD.

Big data is an antitrust issue too, says European Commissioner | ITworld - 1 views

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    "Margrethe Vestager is on the lookout for antitrust issues arising from companies' use of big data -- but says it doesn't require special regulation"
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    "Margrethe Vestager is on the lookout for antitrust issues arising from companies' use of big data -- but says it doesn't require special regulation"
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