FairSearch Panel Explores Mobile, EU Competition Issues

Wednesday, FairSearch held a lunch panel in Washington D.C. to discuss Google’s proposed commitments to the European Commission (EC), and emerging competition issues in the mobile space. The event was held with the backdrop of the American Bar Association’s spring antitrust meetings. Attendees included staff from the FTC, US Justice Department, and FCC, Canada’s Competition Bureau, the U.S. Senate, and guests came from as far away as South Korea, Brazil, Argentina, India, Paris and Brussels.

Panelists:

• Moderator: Matt Reilly, Partner, Simpson Thacher & Bartlett, DC
• Jenni Lukander, Head of Global Competition Law, Nokia, Finland
• Gary Reback, Of Counsel, Carr & Ferrell, Menlo Park, Calif.
• Bartosz Wojciechowski, Head of Legal Department, Allegro Group, Poland
• Heiko Zysk, Head of European Affairs, ProSiebenSat.1 Media, Germany

Matt Reilly: Case About Delivering Best Services, Devices to Consumers

Matt Reilly, a partner with Simpson Thacher & Bartlett in D.C. moderated the panel. Matt has served as U.S. counsel for FairSearch. Matt spoke of the need for competition authorities to protect innovation and the ability of Google’s competitors to deliver the best services and devices to consumers.

He emphasized that the Google case is about startups and established companies wanting a level playing field and to compete openly, fairly and on the merits – not about seeking an advantage for free or top placement in search results unless they provide consumers with the best product. Reilly is a former top FTC antitrust litigator and former head of one of the agency’s units that conducted antitrust reviews of mergers.

Lukander (Nokia): Enforcement Must Prevent Android From Undermining Mobile Competition

Jenni Lukander, Head of Global Competition Law for Nokia, spoke about the importance of ensuring that Google does not use its control over the Android platform, distribution of apps, or standard essential patents (SEPs) to prevent competitors from emerging or competing in mobile.

She talked about Google’s restrictive use of the anti-fragmentation agreement to control smartphone OEMs, citing the case of Google preventing Acer from releasing a smartphone using the Alibaba Aliyun OS. Jenni also spoke of how Google seeks to undermine competing mobile platforms by withholding its own apps or supplying degraded versions on other platforms.

Jenni said antitrust regulators should focus on: contractual or other arrangements that prevent or raise barriers to competing mobile platforms from emerging; protect consumer choice by monitoring a dominant platform’s control over app distribution; maintain the current level of patent protection so rivals retain their ability to innovate and counterbalance a dominant platform; and ensure that SEPs are not used abusively to exclude rival platforms.

Reback: Google’s Proposal Would Raise Prices, Not Provide Equal Treatment To Rivals

Gary Reback reviewed the EC’s investigation and preliminary conclusions about Google’s abuses of dominance – and in particular in comparison shopping results. Reback is Of Counsel at Carr & Ferrell. He talked about the critical response to Google’s three successive settlement proposals to the EC from business and consumer groups as well as some EC commissioners and members of the European Parliament in Brussels. Google’s proposals actually raise prices on consumers and advertisers, he said, rather than rolling back the harmful impacts of Google’s abuses.

Reback used screen shots to show how Google changed its display of specialized results and paid display units after submitting each proposed settlement so that the agreement would no longer apply to most of its search and ad practices.

Reback said Almunia’s stated principle of requiring Google to give “comparable display” to its rivals does not match the well-established principle of requiring a dominant company to afford rivals “equal treatment” (see Reback’s comments on this topic in December 2013). Under that standard, Reback said, Google would give rivals free placement and display them in the same manner as Google’s own featured results. To do so, the remedy would in no way touch Google’s algorithm directly, and the EU would easily be able to monitor Google’s compliance, Reback said.

Wojciechowski (Allegro Group): Proposal ‘Worse Than We Expected’, Sends 95% of Users to Google Shopping Results

Allegro Group’s Bartosz Wojciechowski reviewed Allegro’s testing of Google’s first and second proposed commitments to the EC to settle its investigation. Allegro conducted eye tracking and click-through studies of Google’s proposals with 1.6 million users in four EU countries. Allegro Group is one of the leading e-commerce and online shopping companies with top sites throughout Eastern Europe. Wojciechowski is head of the company’s legal department.

Allegro found that Google’s proposals were “worse than we expected,” with 95% of traffic going to Google’s own online shopping products, leaving rivals to fight over paying for the remaining 5% of user traffic. Studies commissioned by FairSearch found similar results.

Bartosz said Allegro is not opposed to Google generating revenue from search advertising, but that its results should point consumers to the best sites on the Internet, not Google’s own services.

Zysk (ProSieben): Google Becoming New Remote Control For Consumers

ProSieben’s Heiko Zysk talked about how Google has used its monopoly power in search to become the new remote control. Google is eliminating competition for how users find content online, Zysk said, sucking both creativity and material out of the choices available to consumers. Zysk is Head of European Affairs for ProSiebenSat.1 Media, a large broadcaster and online media company in the EU.

Google has already put results from its own comparison shopping and e-commerce services ahead of competitors, he said, and is taking steps to control distribution of audio-video content online, including prioritizing YouTube content in results.

Zysk said Google has already proven that it cannot be trusted to give consumers fair choices, and even less to provide a wide variety of choices for news and creative content. Zysk called for a functional separation of Google’s natural search results on its main site from its paid results in Google’s own specialized search services.