TLJ News from February 1-5, 2014

Alumnia Addresses EC Investigation of Google's Search Practices

2/5. Joaquín Almunia, the European Commission's (EC) VP for Competition Policy" gave a speech in Brussels, Belgium in which he discussed the EC's long running investigation of Google's search related business practices.

He stated that "I believe that Google's new proposals are capable of addressing the competition concerns I set out to them. Therefore, from now on we will move forward towards a decision based on commitments."

The U.S. Federal Trade Commission (FTC) concluded its own investigation of Google's patent and search practices in January of 2013. It announced then that it decided "to close the portion of its investigation relating to allegations that Google unfairly preferences its own content on the Google search results page and selectively demotes its competitors’ content from those results".

The FTC's search statement noted that complaining entities alleged that Google "unfairly promoted its own vertical properties through changes in its search results page" and "manipulated its search algorithms in order to demote vertical websites that competed against Google’s own vertical properties."

The FTC concluded in 2013 that "the evidence presented at this time does not support the allegation that Google’s display of its own vertical content at or near the top of its search results page was a product design change undertaken without a legitimate business justification. Rather, we conclude that Google’s display of its own content could plausibly be viewed as an improvement in the overall quality of Google’s search product. Similarly, we have not found sufficient evidence that Google manipulates its search algorithms to unfairly disadvantage vertical websites that compete with Google-owned vertical properties. Although at points in time various vertical websites have experienced demotions, we find that this was a consequence of algorithm changes that also could plausibly be viewed as an improvement in the overall quality of Google’s search results."

See, story titled "FTC Concludes Its Investigation of Google" in TLJ Daily E-Mail Alert No. 2,504, January 7, 2012.

Joaquin AlumniaLast week, Alumnia (at right) explained that "The latest round of negotiations over the last weeks focused on how Google would ensure that rival specialised search services can fairly compete with Google's services. Our concern was that, given the favourable treatment of Google's own services on its page, competitors' results which are potentially as relevant to the user as Google's own services -- or even more relevant -- could be significantly less visible or not directly visible, leading to an undue diversion of internet traffic."

He elaborated that "it is essential that the presentation of rival links is comparable to that of the Google services", "comparability of presentation of rival links has to be ensured dynamically over time", and "any commitments must retain their relevance throughout their lifetime".

He then stated that "Google has finally accepted to guarantee that whenever it promotes its own specialised search services on its page, the services of rivals will also be displayed in a comparable way. In practice, this means that when Google promotes one of its own specialised search services, there will be three rival services also displayed prominently on the page, in a way that is clearly visible to users."

Thomas Vinje of Fair Search, a group that advocates action by antitrust regulators against Google, stated in a release that this is "worse than doing nothing". He stated that "our concern is that the proposed commitments lock in discrimination and raise rivals' costs instead of solving the problem of Google’s anti-competitive practices".

In addition, on February 6, John Simpson of the Consumer Watchdog, a group that has often criticized Google's business practices, sent a letter to EC President Jose Manuel Barroso "to express our deepest concerns". He argued that, "At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results -- including links to Google products."

He asserted that "The heart of the problem is simple. Google has developed a substantial conflict of interest. It no longer has an incentive to steer users to other sites, but rather primarily to its own services. It is becoming even more effective at this and has a greater incentive to engage in manipulation now that it is merging data collected across all its services. The only way to deal with this conflict is to remove it. Ideally, there needs to be a separation of Google’s different services and assets. At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results -- including links to Google products."

Rep. Waxman Introduces Open Internet Preservation Act

2/3. Rep. Henry Waxman (D-CA) and other Democrats introduced HR 3982 [LOC | WW],, the "the Open Internet Preservation Act". This short and simple bill would reinstate the Federal Communications Commission's (FCC) Report and Order (R&O) [194 pages in PDF] vacated and remanded by the U.S. Court of Appeals (DCCir) in its January 14, 2014 opinion in Verizon v. FCC.

The FCC adopted this R&O on December 21, 2010, and released the text on December 23, 2010. It is FCC 10-201 in GN Docket No. 09-191 and WC Docket No. 07-52. See also, stories in TLJ Daily E-Mail Alert No. 2,186, December 22, 2010, and TLJ Daily E-Mail Alert No. 2,188, December 24, 2010.

The R&O contains rules that regulate the business practices of broadband internet access service (BIAS) providers. These rules are also sometimes referred to as open internet rules or network neutrality rules.

The bill states that this R&O "shall be restored to effect during the period beginning on the date of the enactment of this Act and ending on the date when the Commission takes final action in the proceedings remanded to the Commission in that decision."

Rep. Waxman stated in a release that "Our bill very simply ensures that consumers can continue to access the content and applications of their choosing online. The FCC can and must quickly exercise the authorities the D.C. Circuit recognized to reinstate the Open Internet rules. Our bill makes clear that consumers and innovators will be protected in the interim."

Cathy Sloan of the Computer and Communications Industry Association (CCIA) stated in a release that "As the FCC works diligently to craft new safeguards against content blocking and commercial discrimination that could jeopardize anyone’s open Internet access in the wake of the Verizon court decision, consumers and online businesses will be pleased to know that so many leaders in Congress have their back."

Christopher Lewis of the Public Knowledge (PK) stated in a release that "The decision by the DC Circuit Court left a great deal of uncertainty for the Internet economy. The bill ensures that consumers and businesses are protected during this period of uncertainty between the Court's decision and the FCC's action in response to the court's remand. It is critical that the FCC acts quickly in response to the DC Circuit Court to protect an open Internet as we have always known it. They have clear authority to act and this bill provides protection for consumers while they deliberate."

This bill was referred to the House Commerce Committee (HCC).

The bill has no Republican cosponsors.

Since 2005, when serious consideration of this issue began in the Congress, proponents of open internet legislation have lacked sufficient votes for passage in the full House, the HCC, or its Subcommittee on Communications and Technology. Rep. Waxman has introduced this bill for purposes other than enactment into law.

Sen. Ed Markey (D-MA) introduced the companion bill in the Senate, S 1981 [LOC | WW]. That bill has no Republican cosponsors. It was referred to the Senate Commerce Committee (SCC).