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Paul Merrell

Is Apple an Illegal Monopoly? | OneZero - 0 views

  • That’s not a bug. It’s a function of Apple policy. With some exceptions, the company doesn’t let users pay app makers directly for their apps or digital services. They can only pay Apple, which takes a 30% cut of all revenue and then passes 70% to the developer. (For subscription services, which account for the majority of App Store revenues, that 30% cut drops to 15% after the first year.) To tighten its grip, Apple prohibits the affected apps from even telling users how they can pay their creators directly.In 2018, unwilling to continue paying the “Apple tax,” Netflix followed Spotify and Amazon’s Kindle books app in pulling in-app purchases from its iOS app. Users must now sign up elsewhere, such as on the company’s website, in order for the app to become usable. Of course, these brands are big enough to expect that many users will seek them out anyway.
  • Smaller app developers, meanwhile, have little choice but to play by Apple’s rules. That’s true even when they’re competing with Apple’s own apps, which pay no such fees and often enjoy deeper access to users’ devices and information.Now, a handful of developers are speaking out about it — and government regulators are beginning to listen. David Heinemeier Hansson, the co-founder of the project management software company Basecamp, told members of the U.S. House antitrust subcommittee in January that navigating the App Store’s fees, rules, and review processes can feel like a “Kafka-esque nightmare.”One of the world’s most beloved companies, Apple has long enjoyed a reputation for user-friendly products, and it has cultivated an image as a high-minded protector of users’ privacy. The App Store, launched in 2008, stands as one of its most underrated inventions; it has powered the success of the iPhone—perhaps the most profitable product in human history. The concept was that Apple and developers could share in one another’s success with the iPhone user as the ultimate beneficiary.
  • But critics say that gauzy success tale belies the reality of a company that now wields its enormous market power to bully, extort, and sometimes even destroy rivals and business partners alike. The iOS App Store, in their telling, is a case study in anti-competitive corporate behavior. And they’re fighting to change that — by breaking its choke hold on the Apple ecosystem.
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  • Whether Apple customers have a real choice in mobile platforms, once they’ve bought into the company’s ecosystem, is another question. In theory, they could trade in their pricey hardware for devices that run Android, which offers equivalents of many iOS features and apps. In reality, Apple has built its empire on customer lock-in: making its own gadgets and services work seamlessly with one another, but not with those of rival companies. Tasks as simple as texting your friends can become a migraine-inducing mess when you switch from iOS to Android. The more Apple products you buy, the more onerous it becomes to abandon ship.
  • The case against Apple goes beyond iOS. At a time when Apple is trying to reinvent itself as a services company to offset plateauing hardware sales — pushing subscriptions to Apple Music, Apple TV+, Apple News+, and Apple Arcade, as well as its own credit card — the antitrust concerns are growing more urgent. Once a theoretical debate, the question of whether its App Store constitutes an illegal monopoly is now being actively litigated on multiple fronts.
  • The company faces an antitrust lawsuit from consumers; a separate antitrust lawsuit from developers; a formal antitrust complaint from Spotify in the European Union; investigations by the Federal Trade Commission and the Department of Justice; and an inquiry by the antitrust subcommittee of the U.S House of Representatives. At stake are not only Apple’s profits, but the future of mobile software.Apple insists that it isn’t a monopoly, and that it strives to make the app store a fair and level playing field even as its own apps compete on that field. But in the face of unprecedented scrutiny, there are signs that the famously stubborn company may be feeling the pressure to prove it.
  • Tile is hardly alone in its grievances. Apple’s penchant for copying key features of third-party apps and integrating them into its operating system is so well-known among developers that it has a name: “Sherlocking.” It’s a reference to the time—in the early 2000s—when Apple kneecapped a popular third-party web-search interface for Mac OS X, called Watson. Apple built virtually all of Watson’s functionality into its own feature, called Sherlock.In a 2006 blog post, Watson’s developer, Karelia Software, recalled how Apple’s then-CEO Steve Jobs responded when they complained about the company’s 2002 power play. “Here’s how I see it,” Jobs said, according to Karelia founder Dan Wood’s loose paraphrase. “You know those handcars, the little machines that people stand on and pump to move along on the train tracks? That’s Karelia. Apple is the steam train that owns the tracks.”From an antitrust standpoint, the metaphor is almost too perfect. It was the monopoly power of railroads in the late 19th century — and their ability to make or break the businesses that used their tracks — that spurred the first U.S. antitrust antitrusts.There’s another Jobs quote that’s relevant here. Referencing Picasso’s famous saying, “Good artists copy, great artists steal,” Jobs said of Apple in 2006. “We have always been shameless about stealing great ideas.” Company executives later tried to finesse the quote’s semantics, but there’s no denying that much of iOS today is built on ideas that were not originally Apple’s.
Paul Merrell

EU looks into telecoms blocking Internet calls - International Herald Tribune - 0 views

  • European Union regulators are looking into whether mobile phone operators who block customers from making inexpensive wireless calls over the Internet are breaking competition rules. The European Commission, the EU antitrust authority, has sent questionnaires to phone companies asking what "tools" they use to "control, manage, block, slow down or otherwise restrict or filter" Internet-based voice calls. The EU deadline for responding to the survey was Tuesday. The questionnaire, obtained by Bloomberg News, does not identify any companies. Some mobile carriers have blocked services that use voice-over-Internet protocol, or VoIP, which allows users to make calls over the Web. Companies may be seeking to stop customers from accessing applications, like eBay's Skype, to defend voice revenue from the less expensive Internet services, Carolina Milanesi, research director for mobile devices at Gartner, the research company, said.
    • Paul Merrell
       
      Building a Connected World --- The Role of Antitrust Law and Lawyers.
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    Superficially, this sounds like an application of the principles won by DG Competition in the Court of First Instance's Commission v. Microsoft interoperability decision. But note that here we deal with an investigation into deliberately-created interop barriers rather than those maintained by withholding full communication protocol specifications from competitors. Notice that the investigation encompasses throttling of internet connections for particular uses, an increasingly common practice by Comcast and other ISPs in the U.S., where both VOIP and P2P file-sharing are targeted uses. E.U. and U.S. antitrust law are similar, as efforts to harmonize antitrust law on both sides of The Pond are now decades old; this move does not bode well for bandwidth throttling in the U.S., particularly when aimed at throttling competition. It takes no giant mental leap to apply such principles to big vendor-dominated IT standards bodies that deliberately create or maintain interop barriers in data format standards. Indeed, DG Competition Commissioner Neelie Kroes has already served notice that interop barriers in standards-setting is an item of interest.
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 antitrust"
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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 antitrust"
Paul Merrell

The antitrust thing that won't blow over | Here we go again | The Economist - 0 views

  • Google, the industry’s newest giant, is also coming under closer scrutiny. On April 29th it emerged that America’s Justice Department is examining whether Google’s settlement with authors and publishers over its book-search service violates antitrust laws; and on May 5th the Federal Trade Commission (FTC) launched a probe to see whether Google’s sharing of two board members with Apple reduces competition between the two firms.
  • Similarly, antitrust lobbying is part of a broader “platform war” for IBM, which hopes thereby to keep Microsoft at bay. Among other things, IBM is a sponsor of the European Committee for Interoperable Systems (ECIS), which has many of Microsoft’s other competitors as its members and is one of the prime movers behind the new browser case. It started in late 2007 with a complaint by Opera, a Norwegian browser-maker and ECIS member. Not to be outdone, Microsoft has entered the antitrust game, too. It recently made an investment in T3, a small vendor of mainframe-like computers, which in January lodged a complaint with the European Commission, alleging that IBM kept it from competing by refusing to license mainframe software to T3’s customers. Microsoft has also lobbied American antitrust regulators to tackle Google, encouraging them to look into an online-advertising deal between the search giant and its rival, Yahoo!, which was eventually abandoned.
  • IBM, for its part, would appear to have little to fear. It is hard to argue, with so many different computer systems around, that mainframes still constitute a separate market—a necessary condition if IBM’s behaviour is to be judged anticompetitive.
Paul Merrell

Explainer: What Google, Facebook could face in U.S. antitrust probe - Reuters - 0 views

  • The U.S. Department of Justice is investigating whether big technology companies are engaged in anticompetitive behavior, addressing a rising tide of criticism they have become too powerful to the detriment of consumers.
  • The Justice Department has said it will investigate “whether and how” online platforms in “search, social media, and some retail services online” are engaging in behavior that stifles competition and harms consumers. While the Justice Department did not name any targets in announcing the probe on Tuesday, sources have indicated Alphabet Inc’s Google, social media giant Facebook Inc, online retailer Amazon.com Inc and possibly Apple Inc will likely be reviewed. Here’s what regulators could focus on at the big technology companies:
Paul Merrell

White House Plans to Reverse Bush Antitrust Rules - washingtonpost.com - 0 views

  • The Obama administration today said it would reverse rules made during the Bush administration that made it difficult to stop anticompetitive business behavior.
  • Over the past couple weeks, antitrust regulators have launched reviews of online giant Google. The DOJ is investigating a settlement Google made with book publishers and authors. And the FTC is reviewing the board ties between Google and Apple, which some antitrust experts argue are competitors.
Paul Merrell

Google Caves to Russian Federal Antimonopoly Service, Agrees to Pay Fine - nsnbc international | nsnbc international - 0 views

  • Google ultimately caved to Russia’s Federal Antimonopoly Service, agreeing to pay $7.8 million (438 million rubles) for violating antitrust laws. The corporate Colossus will also pay two other fines totaling an additional $18,000 (1 million rubles) for failing to comply with past orders issued by state regulators. Last year Google caved to similar demands by the European Union.
  • In August 2016 Russia’s Federal Antimonopoly Service responded to a complaint by Russian search engine operator Yandex and fined the U.S.-based Google 438 million rubles for abusing its dominant market position to force manufacturers to make Google applications the default services on devices using Android. Regulators set the fine at 9 percent of Google’s reported profits on the Russian market in 2014, plus inflation. Similar to the case against the European Union Google challenged the penalty in several appellate courts before finally agreeing this week to meet the government’s demands. The corporation also agreed to stop requiring manufacturers to install Google services as the default applications on Android-powered devices. The agreement is valid for six years and nine months, Russia’s Antimonopoly Service reported. Last year Google, after a protracted battle, caved to similar antitrust antitrusts by the European Union, but the internet giant has also come under fire elsewhere. In 2015 Australian treasurer Joe Hockey implied Google in his list of corporate tax thieves. In January 2016 British lawmakers decided to fry Google over tax evasion. Google and taxes were compared to the Bermuda Triangle. One year ago the dispute between the European Union’s competition watchdog and Google, culminated in the European Commission formally charging Google with abusing the dominant position of its Android mobile phone operating system, having launched an investigation in April 2015.
Paul Merrell

European Union fines Intel a record $1.45 billion - Los Angeles Times - 0 views

  • European regulators today levied a record antitrust fine of $1.45 billion against Intel. Corp. for abusing its position as the world's dominant computer chip maker. The fine comes after nearly two years of investigation by the European Commission into allegations that the Santa Clara company offered improper rebates and other discounts to discourage companies from buying microprocessors from its smaller rival, Advanced Micro Devices Inc. Complaints from AMD triggered the case.
  • The fine tops the $1.23-billion fine European regulators levied against Microsoft Corp. last year for abusing its dominant position in computer software.
  • "Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."
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  • The European ruling, which had been expected in recent days, comes as the U.S. Federal Trade Commission continues its own antitrust investigation against Intel, which was opened in June 2008. AMD also has sued Intel in federal court.
  • "The relief that the Europeans imposed I think will provide an excellent guide to U.S. enforcers as they try to determine what to do about Intel's exclusionary conduct," Balto said today.
Paul Merrell

Update: EU hits Microsoft with new antitrust charges - 0 views

  • January 16, 2009 (Computerworld) Microsoft Corp. confirmed today that European Union regulators have formally accused the company of breaking antitrust laws by including the company's Internet Explorer (IE) browser with the Windows operating system. "Yesterday, Microsoft received a Statement of Objections from the Directorate General for Competition of the European Commission," the company said in a statement on Friday. "The Statement of Objections expresses the Commission's preliminary view that the inclusion of Internet Explorer in Windows since 1996 has violated European competition law." According to Microsoft, the EU claimed that "other browsers are foreclosed from competing because Windows includes Internet Explorer."
Paul Merrell

Trump Declares War On Silicon Valley: DoJ Launches Google Anti-Monopoly Probe | Zero Hedge - 0 views

  • Just before midnight on Friday, at the close of what was a hectic month for markets, WSJ dropped a bombshell of a story: The paper reported that the DoJ has opened an anti-trust investigation of Alphabet Inc., which could "present a major new layer of regulatory scrutiny for the search giant, according to people familiar with the matter." The report was sourced to "people familiar with the matter," but was swiftly corroborated by the New York Times, Bloomberg and others. For months now, the FTC has appeared to be gearing up for a showdown with big tech. The agency - which shares anti-trust authority with the DoJ - has created a new commission that could help undo big-tech tie-ups like Facebook's acquisition of Instagram, and hired lawyers who have advanced new anti-monopoly theories that would help justify the breakup of companies like Amazon. But as it turns out, the Trump administration's first salvo against big tech didn't come from the FTC; instead, this responsibility has been delegated to the DoJ, which has reportedly been tasked with supervising the investigation into Google. That's not super surprising, since the FTC already had its chance to nail Google with an anti-monopoly probe back in 2013. But the agency came up short. From what we can tell, it appears the administration will divvy up responsibility for any future anti-trust investigations between the two agencies, which means the FTC - which is already reportedly preparing to levy a massive fine against Facebook - could end up taking the lead in those cases.
  • Though WSJ didn't specify which aspects of Google's business might come under the microscope, a string of multi-billion-euro fines recently levied by the EU might offer some guidance. The bloc's anti-trust authority, which has been far more eager to take on American tech giants than its American counterpart (for reasons that should be obvious to all), has fined Google over its practice of bundling software with its standard Android license, the way its search engine rankings favor its own product listings, and ways it has harmed competition in the digital advertising market. During the height of the controversy over big tech's abuses of sensitive user data last year, the Verge published a story speculating about how the monopolistic tendencies of each of the dominant Silicon Valley tech giants could be remedied. For Google, the Verge argued, the best remedy would be a ban on acquisitions - a strategy that has been bandied about in Congress.
Paul Merrell

U.S. vs. Facebook: A Playbook for SEC, DOJ and EDNY - 0 views

  • Six4Three recently published a playbook for the FTC to get to the bottom of Facebook’s secretive deals selling user data without privacy controls. In light of The New York Times article reporting multiple criminal investigations into Facebook surrounding these secretive deals, we’re publishing the playbook for criminal investigators.Perhaps the most important recognition at the outset is that the secretive deals that have been reported, whether those with a handful of device manufacturers or with 150 large technology companies, are just the tip of the iceberg. Those secretive deals handing over user data in exchange for gobs of cash were merely part and parcel of a much broader illegal scheme that begins with Facebook’s transition to mobile in 2012 and continues to this very day. We believe this illegal scheme amounts to a clear RICO violation. The United Kingdom Parliament agrees. Here’s how criminal investigators can overcome Facebook’s incredibly effective concealment campaign and bring a viable RICO case.Facebook’s pattern of racketeering activity is a play in three acts from at least 2012 to present. The first act is all about the desperation resulting from the collapse of Facebook’s desktop advertising business right around its IPO and the various securities violations that resulted. The second act is about covering up those securities violations by illegally building its mobile advertising business via extortion and wire fraud in order to close the gap in Facebook’s revenue projections before the world took notice, which likely resulted in additional securities violations. The third act is about covering up the extortion and wire fraud by lying to government officials investigating Facebook while continuing to effectuate the scheme. We are still in the third act.For almost a decade now Facebook has been covering up one illegal act with another in order to hide how it managed to ramp up its mobile advertising business faster than any other business in the history of capitalism. The abuses of Facebook’s data, from Russian interference in the 2016 election to Cambridge Analytica and Brexit, all stem in substantial part from the decisions Facebook knowingly, willfully and maliciously made to facilitate this criminal conspiracy. Put simply, Facebook’s transition to mobile destabilized the world.
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    This is so reminiscent of Microsoft tactics at the point that antitrust regulators stepped in.
Paul Merrell

Microsoft Loses E.U. Antitrust Case - washingtonpost.com - 0 views

  • It ordered the software giant to untie the browser from its operating system in the 27-nation E.U.
  • The commission's investigation into Microsoft's Web-surfing software began a year ago, after the Norwegian browser-maker Opera Software filed a complaint. Opera argued that Microsoft hurt competitors not only by bundling the software, in effect giving away the browser, but also by not following accepted Web standards. That meant programmers who built Web pages would have to tweak their codes for different browsers. In many cases, they simply designed pages that worked with market-leading Internet Explorer but showed up garbled on competing browsers.
  • At the time of the complaint, Opera said it was asking E.U. regulators to either force Microsoft to market a version of Windows without the browser, or to include other browsers with Windows.
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    The Post too says that DG Competition ordered the unbundling of MSIE from Windows. But again no attribution for the statement. They also leave the impression that Opera's complaint regarding the undermining of open web standards was upheld, something not stated in either the Microsoft or DG Competition announcements. So the questions of the day are: [i] did the Commission order the unbundling of MSIE from Windows; and [ii] did the Commission also rule on the undermining of open web standards. The latter question could be of critical importance in the still ongoing proceeding regarding the ECIS complaint in regard to the undermining of ODF by Microsoft pushing OOXML.
Paul Merrell

48 States Investigating Whether Google's Dominance Hurts Competition : NPR - 1 views

  • State attorneys general of 48 states, Puerto Rico and the District of Columbia announced a major probe Monday into Google's dominance in search and advertising for practices that harm competition as well as consumers. Texas Attorney General Ken Paxton is leading the bipartisan pack.
  • The investigation includes all the states, except for California and Alabama.
  • Google has the power to put a user on page 1 or 100. European regulators have charged Google with abusing that power and, following years-long investigations, they issued multi-billion-dollar fines. The tech giant, along with Facebook, controls nearly 60% of all digital advertising, according to eMarketer. A wide range of businesses that must publicize their services — be it a hair stylist, a hospital or a Fortune 500 company — must abide by the terms and prices set by two companies. But, as eMarketer notes, the duopoly's control is diminishing as Amazon grows.
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  • Last week Google disclosed that, in addition to state-level government action, the Justice Department has asked the company to hand over documents.
  • Led by New York, attorneys general from eight states and the District of Columbia announced a probe into Facebook as well.
Paul Merrell

FCC Turns Itself into a Deregulatory Agency - WhoWhatWhy - 2 views

  • Since taking office, President Donald Trump has wasted no time in proposing rollbacks to Obama-era federal regulations. So, it should come as no surprise that the Federal Communications Commission (FCC) voted last month to propose changes to current regulations on Internet service providers. Spearheaded by Ajit Pai — the Trump-appointed FCC chairman and former lawyer for Verizon — the 2-1 vote is the first step in dismantling the Open Internet Order. The lone FCC Democrat, Mignon Clyburn, was overruled by Pai and fellow commissioner Michael O’Reilly. The 2015 order classified broadband internet as a utility under Title II of the Communications Act of 1934. Opponents of the current state of net neutrality argue that the rules are archaic and place unnecessary — even harmful — restrictions on internet service providers (ISPs), leading to lack of innovation and investment. While it’s true that policies conceived in the 1930s could hardly anticipate the complexities of the modern Internet, a complete rollback of Title II protections would leave ISPs free to favor their own services and whichever company pays for upgraded service. Considering relaxed FEC rules on media ownership and lack of regulation enforcement, some could argue that a rollback of net neutrality is even more toxic to innovation and affordable pricing. That is, fast lanes could be created for companies with deeper pockets, effectively giving them an advantage over companies and individuals who can’t pay extra. This approach effectively penalizes small businesses, nonprofits and innovative start-ups. Today’s Internet is so vast and so pervasive that it’s hard to grasp the impact that an abandonment of net neutrality would have on every aspect of our culture.
  • While the FCC’s proposed change will touch most Americans, net neutrality remains a mystifying concept to non-techies. To help our readers better understand the issue, we have compiled some videos that explain net neutrality and its importance. The FCC will be accepting comments from the public on their website until August 16, 2017.
Paul Merrell

Comcast-NBC: Internet issues bog down Comcast-NBC merger - latimes.com - 1 views

  • One company is the nation's biggest cable TV provider. The other owns a TV network, several popular cable channels and a movie studio.But when it comes to the $30-billion merger of Comcast Corp. and NBC Universal, the regulators and lawmakers who will decide the fate of the deal aren't focusing on the big screen or the small screen. They're looking at the Internet.Welcome to a media marriage, circa 2010.
Paul Merrell

Facebook co-founder Chris Hughes calls for the company to be broken up - 0 views

  • show chapters Facebook co-founder Chris Hughes calls for the company to be broken up    15 Hours Ago Facebook co-founder Chris Hughes issued a forceful call for regulators to break up the company he helped build in a New York Times op-ed published Thursday. Hughes, who left Facebook to work for Barack Obama's 2008 presidential campaign, said that from his own experience building and working inside the company, Facebook now has more power than a private sector entity is due. While emphasizing his belief that CEO Mark Zuckerberg has good intentions overall, he said the executive has far too much unchecked power, aided by his majority voting stake in the company.
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