antitrust

US search market needs a ‘choice screen’ remedy now, says DuckDuckGo

Posted by | Android, antitrust, Apps, Australia, competition law, DuckDuckGo, Europe, european union, Google, google search, local search, Margrethe Vestager, Qwant, russia, Search, search engine, search engines, search results, United States, Yandex | No Comments

US regulators shouldn’t be sitting on their hands while the 50+ state, federal and congressional antitrust investigations of Google to grind along, search rival DuckDuckGo argues.

It’s put out a piece of research today that suggests choice screens which let smartphone users choose from a number of search engines to be their device default — aka “preference menus” as DuckDuckGo founder Gabriel Weinberg prefers to call them — offer an easy and quick win for regulators to reboot competition in the search space by rebalancing markets right now.

“If designed properly we think [preference menus] are a quick and effective key piece in the puzzle for a good remedy,” Weinberg tells TechCrunch. “And that’s because it finally enables people to change the search defaults across the entire device which has been difficult in the past… It’s at a point, during device set-up, where you can promote the users to take a moment to think about whether they want to try out an alternative search engine.”

Google is already offering such a choice (example below) to Android users in Europe, following an EU antitrust decision against Android last year.

Google search choice screen

 

DuckDuckGo is concerned US regulators aren’t thinking pro-actively enough about remedies for competition in the US search market — and is hoping to encourage more of a lean-in approach to support boosting diversity so that rivals aren’t left waiting years for the courts to issue judgements before any relief is possible.

In a survey of Internet users which it commissioned, polling more than 3,400 adults in the US, UK, Germany and Australia, people were asked to respond to a 4-choice screen design, based on an initial Google Android remedy proposal, as well as an 8-choice variant.

“We found that in each surveyed country, people select the Google alternatives at a rate that could increase their collective mobile market share by 300%-800%, with overall mobile search market share immediately changing by over 10%,” it writes [emphasis its].

Survey takers were also asked about factors that motivate them to switch search engines — with the number one reason given being a better quality of search results, and the next reason being if a search engine doesn’t track their searches or data.ChoiceScreenAndriod

Of course DuckDuckGo stands to gain from any pro-privacy switching, having built an alternative search business by offering non-tracked searches supported by contextual ads. Its model directly contrasts with Google’s, which relies on pervasive tracking of Internet users to determine which ads to serve.

But there’s plenty of evidence consumers hate being tracked. Not least the rise in use of tracker blockers.

“Using the original design puzzle [i.e. that Google devised] we saw a lot of people selecting alternative search engines and we think it would go up from there,” says Weinberg. “But even initially a 10% market share change is really significant.”

He points to regulatory efforts in Europe and also Russia which have resulted in antitrust decisions and enforcements against Google — and where choice screens are already in use promoting alternative search engine choices to Android users.

He also notes that regulators in Australia and the UK are pursuing choice screens — as actual or potential remedies for rebalancing the search market.

Russia has the lead here, with its regulator — the FAS — slapping Google with an order against bundling its services with Android all the way back in 2015, a few months after local search giant Yandex filed a complaint. A choice screen was implemented in 2017 and Russia’s homegrown Internet giant has increased its search market share on Android devices as a result. Google continues to do well in Russia. But the result is greater diversity in the local search market, as a direct result of implementing a choice screen mechanism.

“We think that all regulatory agencies that are now considering search market competition should really implement this remedy immediately,” says Weinberg. “They should do other things… as well but I don’t see any reason why one should wait on not implementing this because it would take a while to roll out and it’s a good start.”

Of course US regulators have yet to issue any antitrust findings against Google — despite there now being tens of investigations into “potential monopolistic behavior”. And Weinberg concedes that US regulators haven’t yet reached the stage of discussing remedies.

“It feels at a very investigatory stage,” he agrees. “But we would like to accelerate that… As well as bigger remedial changes — similar to privacy and how we’re pushing Do Not Track legislation — as something you can do right now as kind of low hanging fruit. I view this preference menu in the same way.”

“It’s a very high leverage thing that you can do immediately to move market share and increase search competition and so one should do it faster and then take the things that need to be slower slower,” he adds, referring to more radical possible competition interventions — such as breaking a business up.

There is certainly growing concern among policymakers around the world that the current modus operandi of enforcing competition law has failed to keep pace with increasingly powerful technology-driven businesses and platforms — hence ‘winner takes all’ skews which exist in certain markets and marketplaces, reducing choice for consumers and shrinking opportunities for startups to compete.

This concern was raised as a question for Europe’s competition chief, Margrethe Vestager, during her hearing in front of the EU parliament earlier this month. She pointed to the Commission’s use of interim measures in an ongoing case against chipmaker Broadcom as an example of how the EU is trying to speed up its regulatory response, noting it’s the first time such an application has been made for two decades.

In a press conference shortly afterwards, to confirm the application of EU interim measures against Broadcom, Vestager added: “Interim measures are one way to tackle the challenge of enforcing our competition rules in a fast and effective manner. This is why they are important. And especially that in fast moving markets. Whenever necessary I’m therefore committed to making the best possible use of this important tool.”

Weinberg is critical of Google’s latest proposals around search engine choice in Europe — after it released details of its idea to ‘evolve’ the search choice screen — by applying an auction model, starting early next year. Other rivals, such as French pro-privacy engine Qwant, have also blasted the proposal.

Clearly, how choice screens are implemented is key to their market impact.

“The way the current design is my read is smaller search engines, including us and including European search engines will not be on the screen long term the way it’s set up,” says Weinberg. “There will need to be additional changes to get the effects that we were seeing in our studies we made.

“There’s many reasons why us and others would not be those highest bidders,” he says of the proposed auction. “But needless to say the bigger companies can weigh outbid the smaller ones and so there are alternative ways to set this up.”

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Google’s Play Store is giving an age-rating finger to Fleksy, a Gboard rival 🖕

Posted by | Android, antitrust, Apps, competition, emoji, Europe, european union, fleksy, gboard, Google, Google Play, Marketplaces, online marketplaces, play, play store, Policy, smartphone, spain, Thingthing | No Comments

Platform power is a helluva a drug. Do a search on Google’s Play Store in Europe and you’ll find the company’s own Gboard app has an age rating of PEGI 3 — aka the pan-European game information labelling system which signifies content is suitable for all age groups.

PEGI 3 means it may still contain a little cartoon violence. Say, for example, an emoji fist or middle finger.

Now do a search on Play for the rival Fleksy keyboard app and you’ll find it has a PEGI 12 age rating. This label signifies the rated content can contain slightly more graphic fantasy violence and mild bad language.

The discrepancy in labelling suggests there’s a material difference between Gboard and Fleksy — in terms of the content you might encounter. Yet both are pretty similar keyboard apps — with features like predictive emoji and baked in GIFs. Gboard also lets you create custom emoji. While Fleksy puts mini apps at your fingertips.

A more major difference is that Gboard is made by Play Store owner and platform controller, Google. Whereas Fleksy is an indie keyboard that since 2017 has been developed by ThingThing, a startup based out of Spain.

Fleksy’s keyboard didn’t used to carry a 12+ age rating — this is a new development. Not based on its content changing but based on Google enforcing its Play Store policies differently.

The Fleksy app, which has been on the Play Store for around eight years at this point — and per Play Store install stats has had more than 5M downloads to date — was PEGI 3 rating until earlier this month. But then Google stepped in and forced the team to up the rating to 12. Which means the Play Store description for Fleksy in Europe now rates it PEGI 12 and specifies it contains “Mild Swearing”.

Screenshot 2019 10 23 at 12.39.45

The Play store’s system for age ratings requires developers to fill in a content ratings form, responding to a series of questions about their app’s content, in order to obtain a suggested rating.

Fleksy’s team have done so over the years — and come up with the PEGI 3 rating without issue. But this month they found they were being issued the questionnaire multiple times and then that their latest app update was blocked without explanation — meaning they had to reach out to Play Developer Support to ask what was going wrong.

After some email back and forth with support staff they were told that the app contained age inappropriate emoji content. Here’s what Google wrote:

During review, we found that the content rating is not accurate for your app… Content ratings are used to inform consumers, especially parents, of potentially objectionable content that exists within an app.

For example, we found that your app contains content (e.g. emoji) that is not appropriate for all ages. Please refer to the attached screenshot.

In the attached screenshot Google’s staff fingered the middle finger emoji as the reason for blocking the update:

Fleksy Play review emoji violation

 

“We never thought a simple emoji is meant to be 12+,” ThingThing CEO Olivier Plante tells us.

With their update rejected the team was forced to raise the rating of Fleksy to PEGI 12 — just to get their update unblocked so they could push out a round of bug fixes for the app.

That’s not the end of the saga, though. Google’s Play Store team is still not happy with the regional age rating for Fleksy — and wants to push the rating even higher — claiming, in a subsequent email, that “your app contains mature content (e.g. emoji) and should have higher rating”.

Now, to be crystal clear, Google’s own Gboard app also contains the middle finger emoji. We are 100% sure of this because we double-checked…

Gboard finger

Emojis available on Google’s Gboard keyboard, including the ‘screw you’ middle finger. Photo credit: Romain Dillet/TechCrunch

This is not surprising. Pretty much any smartphone keyboard — native or add-on — would contain this symbol because it’s a totally standard emoji.

But when Plante pointed out to Google that the middle finger emoji can be found in both Fleksy’s and Gboard’s keyboards — and asked them to drop Fleksy’s rating back to PEGI 3 like Gboard — the Play team did not respond.

A PEGI 16 rating means the depiction of violence (or sexual activity) “reaches a stage that looks the same as would be expected in real life”, per official guidance on the labels, while the use of bad language can be “more extreme”, and content may include the use of tobacco, alcohol or illegal drugs.

And remember Google is objecting to “mature” emoji. So perhaps its app reviewers have been clutching at their pearls after finding other standard emojis which depict stuff like glasses of beer, martinis and wine… 🤦‍♀️

Over on the US Play Store, meanwhile, the Fleksy app is rated “teen”.

While Gboard is — yup, you guessed it! — ‘E for Everyone’… 🤔

image 1 1

 

Plante says the double standard Google is imposing on its own app vs third party keyboards is infuriating, and he accuses the platform giant of anti-competitive behavior.

“We’re all-in for competition, it’s healthy… but incumbent players like Google playing it unfair, making their keyboard 3+ with identical emojis, is another showcase of abuse of power,” he tells TechCrunch.

A quick search of the Play Store for other third party keyboard apps unearths a mixture of ratings — most rated PEGI 3 (such as Microsoft-owned SwiftKey and Grammarly Keyboard); some PEGI 12 (such as Facemoji Emoji Keyboard which, per Play Store’s summary contains “violence”).

Only one that we could find among the top listed keyboard apps has a PEGI 16 rating.

This is an app called Classic Big Keyboard — whose listing specifies it contains “Strong Language” (and what keyboard might not, frankly!?). Though, judging by the Play Store screenshots, it appears to be a fairly bog standard keyboard that simply offers adjustable key sizes. As well as, yes, standard emoji.

“It came as a surprise,” says Plante describing how the trouble with Play started. “At first, in the past weeks, we started to fill in the rating reviews and I got constant emails the rating form needed to be filled with no details as why we needed to revise it so often (6 times) and then this last week we got rejected for the same reason. This emoji was in our product since day 1 of its existence.”

Asked whether he can think of any trigger for Fleksy to come under scrutiny by Play Store reviewers now, he says: “We don’t know why but for sure we’re progressing nicely in the penetration of our keyboard. We’re growing fast for sure but unsure this is the reason.”

“I suspect someone is doubling down on competitive keyboards over there as they lost quite some grip of their search business via the alternative browsers in Europe…. Perhaps there is a correlation?” he adds, referring to the European Commission’s antitrust decision against Google Android last year — when the tech giant was hit with a $5BN fine for various breaches of EU competition law. A fine which it’s appealing.

“I’ll continue to fight for a fair market and am glad that Europe is leading the way in this,” adds Plante.

Following the EU antitrust ruling against Android, which Google is legally compelled to comply with during any appeals process, it now displays choice screens to Android users in Europe — offering alternative search engines and browsers for download, alongside Google’s own dominate search  and browser (Chrome) apps.

However the company still retains plenty of levers it can pull and push to influence the presentation of content within its dominant Play Store — influencing how rival apps are perceived by Android users and so whether or not they choose to download them.

So requiring that a keyboard app rival gets badged with a much higher age rating than Google’s own keyboard app isn’t a good look to say the least.

We reached out to Google for an explanation about the discrepancy in age ratings between Fleksy and Gboard and will update this report with any further response. At first glance a spokesman agreed with us that the situation looks odd.

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Apple tweaks its App Store algorithm as antitrust investigations loom

Posted by | anticompetitive, antitrust, app-store, Apple, apple inc, apple store, apple tv, Apps, iOS, iTunes, Mobile, online marketplaces | No Comments

That Apple has used its App Store to offer itself a competitive advantage is nothing new. TechCrunch and others have been reporting on this problem for years, including those times when Apple chose to display its apps in the No. 1 position on the Top Charts, for example, or when it stole some of the App Store’s best ideas for its own, banned apps that competed with iOS features or positioned its apps higher than competitors in search. Now, in the wake of antitrust investigations in the U.S. and abroad, as well as various anti-competitive lawsuits, Apple has adjusted the App Store’s algorithm so fewer of its own apps would appear at the top of the search results.

The change was reported by The New York Times on Monday, which presented Apple with a lengthy analysis of app rankings.

It even found that some searches for various terms would display as many as 14 Apple-owned apps before showing any results from rivals. Competitors could only rank higher if they paid for an App Store search ad, the report noted.

That’s a bad look for Apple, which has recently been trying to distance itself and its App Store from any anti-competitive accusations.

In May, for example, Apple launched a new App Store website designed to demonstrate how it welcomes competition from third-party apps. The site showed that for every Apple built-in app, there were competitors available throughout the App Store.

But availability in the store and discoverability by consumers are two different things.

Apple admitted to the NYT that for over a year many common searches on the App Store would return Apple’s own apps, even when the Apple apps were less popular or relevant at times. The company explained the algorithm wasn’t manipulated to do so. For the most part, Apple said its own apps ranked higher because they’re more popular and because they come up in search results for many common terms. The company additionally said that one feature of the app’s algorithm would sometimes group apps by their maker, which gave Apple’s own apps better rankings than expected.

Screen Shot 2019 09 09 at 11.29.20 AM

Above: via the NYT, the average number of Apple apps that returned at the top of the search results by month

Apple said it adjusted the algorithm in July to make it seem like Apple’s own apps weren’t receiving special treatment. According to the NYT, both Apple VP Philip Schiller, who oversees the App Store, and SVP Eddy Cue, who oversees many of Apple’s apps, confirmed that these changes have not fully fixed the problem.

The issue, as Apple explains it, is that its own apps are so popular that it had to tweak its algorithm to pretend they are not. Whether or not this is true can’t be independently verified, however, as Apple doesn’t allow any visibility into metrics like searches, downloads or active users.

Maybe it’s time for Apple’s apps to exit the App Store?

The report, along with the supposed ineffectiveness of the algorithm’s changes, begs the question as to whether Apple’s apps should show up in the App Store’s charts and search results at all, and if so, how.

To be fair, this is a question that’s not limited to Apple. Google today is facing the same problem. Recently, the CEO of a popular software program, Basecamp, called Google’s paid search ads a “shakedown,” arguing that the only way his otherwise No. 1 search result can rank at the top of the search results page is to buy an ad. Meanwhile, his competitors can do so — even using his brand name as the keyword to bid against.

The same holds true for the App Store, but on a smaller scale than the entirety of the web. That also makes Apple’s problem easier to solve.

For example, Apple could simply choose to offer a dedicated section for its own software downloads, and leave the App Store as the home for third-party software alone.

This sort of change could help to eliminate concerns over Apple’s anti-competitive behavior in the search results and chart rankings. Apple might balk against this solution, saying that users should have an easy way to locate and download its own apps, and the App Store is the place to do that. But the actual marketplace itself could be left to the third-party software while the larger App Store app — which today includes a variety of app-related content, including app reviews, interviews with developers, app tips and a subscription gaming service, Apple Arcade — could still be used to showcase Apple-produced software.

It could just do so outside the actual marketplace.

Here’s how this could work. If users wanted to re-install an Apple app they had deleted or download one that didn’t come pre-installed on their device, they could be directed to a special Apple software download page. Pointers to this page could be in the App Store app itself as well as in the iOS Settings.

An ideal spot for this section could even be on the existing Search page of the App Store.

With a redesign, Apple could offer a modified search screen where users could optionally check a box to return a list of apps results that would come only from Apple. This would indicate intentional behavior on the consumer’s part. That is, they are directly seeking an Apple software download — as opposed to the current situation where a user searches for “Music” and sees Apple’s own music app appear above all the others from rivals like Spotify and Pandora.

Alternately, Apple could just list its own apps on this page or offer a link to this dedicated page from the search screen.

And these are just a few variations on a single idea. There are plenty of other ways the App Store could be adjusted to be less anti-competitive, too.

As another example, Apple could also include the “You Might Also Like” section in its own apps’ App Store listings, as it does for all third-party apps.

Image from iOS 1Above: Apple Music’s App Store Listing

This section directs users to other apps that match the same search query right within the app’s detail page. Apple’s own apps, however, only include a “More by Apple” section. That means it’s keeping all the search traffic and consumer interest for itself.

Image from iOS

Above: Spotify’s App Store Listing

Or it could reduce the screen space dedicated to its own apps in the search results — even if they rank higher — in order to give more attention to apps from competitors while still being able to cater to users who were truly in search of Apple’s software.

But ultimately, how Apple will have to behave with regard to its App Store may be left to the regulators to decide, given Apple’s failure to bake this sort of anti-competitive thinking into its App Store design.

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Google to auction slots on Android default search ‘choice screen’ in Europe next year, rivals cry ‘pay-to-play’ foul

Posted by | Android, antitrust, Apps, competition, DuckDuckGo, Europe, Google, lawsuit, privacy, Qwant, Search | No Comments

Starting early next year Google will present Android users in Europe with a search engine choice screen when handsets bundle its own search service by default.

In a blog post announcing the latest change to flow from the European Union’s record-breaking $5 billion antitrust enforcement against Android last year, when the Commission found Google had imposed illegal restrictions on device makers (OEMs) and carriers using its dominant smartphone platform, it says new Android phones will be shown the choice screen once during set-up (or again after any factory reset).

The screen will display a selection of three rival search engines alongside its own.

OEMs will still be able to offer Android devices in Europe that bundle a non-Google search engine by default (though per Google’s reworked licensing terms they have to pay it to do so). In those instances Google said the choice screen will not be displayed.

Google says rival search engines will be selected for display on the default choice screen, per market, via a fixed-price sealed bid annual auction — with any winners (and/or eligible search providers) being displayed in a random order alongside its own.

Search engines that win the auction will secure one of three open slots on the choice screen, with Google’s own search engine always occupying one of the four total slots.

“In each country auction, search providers will state the price that they are willing to pay each time a user selects them from the choice screen in the given country,” it writes. “Each country will have a minimum bid threshold. The three highest bidders that meet or exceed the bid threshold for a given country will appear in the choice screen for that country.”

android choice screen

If there aren’t enough bids to surface three winners per auction then Google says it will randomly select from a pool of eligible search providers, which it is also inviting to apply to participate in the choice screen. (Eligibility criteria can be found here.)

“Next year, we’ll introduce a new way for Android users to select a search provider to power a search box on their home screen and as the default in Chrome (if installed),” it writes. “Search providers can apply to be part of the new choice screen, which will appear when someone is setting up a new Android smartphone or tablet in Europe.”

“As always, people can continue to customize and personalize their devices at any time after set up. This includes selecting which apps to download, changing how apps are arranged on the screen, and switching the default search provider in apps like Google Chrome,” it adds.

Google’s blog post makes no mention of whether the choice screen will be pushed to the installed base of Android devices. But a spokeswoman told us the implementation requires technical changes that means it can only be supported on new devices.

Default selections on a dominant platform are of course hugely important for gaining or sustaining market share. And it’s only since competition authorities dialed up their scrutiny that the company has started to make some shifts in how it bundles its own services in dominant products such as Android and Chrome.

Earlier this year Google quietly added rival pro-privacy search engine DuckDuckGo as one of the default choices offered by its Chrome browser, for example.

In April it also began rolling out choice screens to both new and existing Android users in Europe — offering a prompt to download additional search apps and browsers.

In the latter case, each screen shows five apps in total, including whatever search and browser is already installed. Apps not already installed are included based on their market popularity and shown in a random order.

android choice app screen.max 1000x1000

French pro-privacy search engine Qwant told us that since the rollout of the app service choice screen to Android devices the share of Qwant users using its search engine on mobile has leapt up from around 2% to more than a quarter (26%) of its total user base.

Qwant co-founder and CEO Eric Léandri said the app choice screen shows that competing against Google on search is possible — but only “thanks to the European Commission” stepping in and forcing the unbundling.

However, he raised serious concerns about the sealed bid auction structure that Google has announced for the default search choice — pointing out that many of the bidders for the slots will also be using Google advertising and technology; while the sealed structure of the auction means no-one outside Google will know what prices are being submitted as bids, making it impossible for rivals to know whether the selections Google makes are fair.

Even Google’s own FAQ swings abruptly from claims of the auction it has devised being “a fair and objective method” for determining which search providers get slots, to a flat “no” and “no” on any transparency on bid amounts or the number of providers it deems eligible per market…

Screenshot 2019 08 02 at 16.51.50

“Even if Google is Google some people can choose something else if they have the choice. But now that Google knows it, it wants to stop the process,” Léandri told TechCrunch.

“It is not up to Google to now charge its competitors for its faulty behavior and the amount of the fine, through an auction system that will benefit neither European consumers nor free competition, which should not be distorted by such process,” Qwant added in an emailed press statement. “The proposed bidding process would be open to so-called search engines that derive their results and revenues from Google, thereby creating an unacceptable distortion and a high risk of manipulation, inequity or disloyalty of the auction.”

“The decision of the European Commission must benefit European consumers by ensuring the conditions of a freedom of choice based on the intrinsic merits of each engine and the expectations of citizens, especially regarding the protection of their personal data, and not on their ability to fund Google or to be financed by it,” it also said.

In a further complaint, Léandri said Google is requiring bidders in the choice screen auction to sign an NDA in order to participate — which Qwant argues would throw a legal obstacle in the way of it being able to participate, considering it is a complainant in the EU’s antitrust case (ongoing because Google is appealing).

“Qwant cannot accept that the auction process is subject to a non-disclosure agreement as imposed by Google while its complaint is still pending,” it writes. “Such a confidentiality agreement has no other possible justification than the desire to silence its competitors on the anomalies they would see. This, again, is an unacceptable abuse of its dominant position.”

We’ve reached out to the Commission with questions about Google’s choice screen auction. Update: A Commission spokesperson told us:

The decision provides rival search providers the possibility to strike exclusive pre-installation deals with smartphone and tablet manufacturers. This was not possible before.

In order to ensure the effective implementation of the decision, Google also agreed to implement a choice screen. We have seen in the past that a choice screen can be an effective way to promote user choice.

We will be closely monitoring the implementation of the choice screen mechanism, including listening to relevant feedback from the market, in particular in relation to the presentation and mechanics of the choice screen and to the selection mechanism of rival search providers. The Commission is committed to a full and effective implementation of the decision.

DuckDuckGo founder Gabriel Weinberg has also been quick to point to flaws in the auction structure — writing on Twitter: “A ‘ballot box’ screen could be an excellent way to increase meaningful consumer choice if designed properly. Unfortunately, Google’s announcement today will not meaningfully deliver consumer choice.

“A pay-to-play auction with only 4 slots means consumers won’t get all the choices they deserve, and Google will profit at the expense of the competition. We encourage regulators to work with directly with Google, us, and others to ensure the best system for consumers.”

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Aptoide, a Play Store rival, cries antitrust foul over Google hiding its app

Posted by | Android, antitrust, app-store, Apps, aptoide, China, competition, Developer, Europe, european commission, european union, Google, Google Play, huawei, online marketplaces, operating systems, play store, Portugal, TC | No Comments

As US regulators gear up to launch another antitrust probe of Google’s business, an alternative Android app store is dialling up its long time complaint of anti-competitive behavior against the search and smartphone OS giant.

Portugal-based Aptoide is launching a campaign website to press its case and call for Google to “Play Fair” — accusing Mountain View of squeezing consumer choice by “preventing users from freely choosing their preferred app store”.

Aptoide filed its first EU antitrust complaint against Google all the way back in 2014, joining a bunch of other complainants crying foul over how Google was operating Android.

And while the European Commission did eventually step in, slapping Google with a $5BN penalty for antitrust abuses last summer after a multi-year investigation, rivals continue to complain the Android maker still isn’t playing fair.

In the case of Aptoide, the alternative Android app store says Google has damaged its ability to compete by unjustifiably flagging its app as insecure.

“Since Summer 2018, Google Play Protect flags Aptoide as a harmful app, hiding it in users’ Android devices and requesting them to uninstall it. This results in a potential decrease of unique Aptoide users of 20%. Google Play Protect is Google’s built-in malware protection for Android, but we believe the way it works damages users’ rights,” it writes on the site, where it highlights what it claims are Google’s anti-competitive behaviors, and asks users to report experiences of the app being flagged.

Aptoide says Google has engaged in multiple behaviors that make it harder for it to gain or keep users — thereby undermining its ability to compete with Google’s own Play Store.

“In 2018, we had 222 million yearly active users. Last month (May’19), we had 56 million unique MAU,” co-founder and CEO Paulo Trezentos tells TechCrunch. “We estimate that the Google Play removal and flagging had cause the loss of 15% to 20% of our user base since June’18.”

(The estimate of how many users Aptoide has lost was performed using Google SafetyNet API which he says allows it to query the classification of an app.)

“Fortunately we have been able to compensate that with new users and new partnerships but it is a barrier to a faster growth,” he adds.

“The googleplayfair.com site hopes to bring visibility to this situation and help other start ups that may be under the same circumstances.”

Among the anti-competitive behaviors Aptoide accuses Google of engaging in are flagging and suspending its app from users’ phones — without their permission and “without a valid reason”.

“It hides Aptoide. User cannot see Aptoide icon and cannot launch. Even if they go to ‘settings’ and say they trust Aptoide, Aptoide installations are blocked,” he says. “If it looks violent, it’s because it’s a really aggressive move and impactful.”

Here’s the notification Aptoide users are shown when trying to override Google’s suspension of Aptoide at the package manager level:

Even if an Aptoide user overrides the warning — by clicking ‘keep app (unsafe)’ — Trezentos says the app still won’t work because Google blocks Aptoide from installing apps.

“The user has to go to Play Protect settings (discover it it’s not easy) and turn off Play protect for all apps.”

He argues there is no justification for Aptoide’s alternative app store being treated in this way.

“Aptoide is considered safe both by security researchers [citing a paper by Japanese security researchers] and by Virus Total (a company owned by Google),” says Trezentos, adding: “Google is removing Aptoide from users phone only due to anticompetitive practices. Doesn’t want anyone else as distribution channel in Android.”

On the website Aptoide has launched to raise awareness and inform users and other startups about how Google treats its app, it makes the claim that its store is “proven… 100% secure” — writing:

We would like to be treated in a fair way: Play Protect should not flag Aptoide as a harmful app and should not ask users to uninstall it since it’s proven that it’s 100% secure. Restricting options for users goes against the nature of the Android open source project [ref10]. Moreover, Google’s ongoing abusive behaviour due to it’s dominant position results in the lack of freedom of choice for users and developers.We would like to keep allowing users and developers to discover and distribute apps in the store of their choice. A healthy competitive market and a variety of options are what we all need to keep providing the best products.

Trezentos stands by the “100% secure” claim when we query it.

“We think that we have a safer approach. We call it  ‘security by design’: We don’t consider all apps secure in the same way. Each app has a badge depending on the reputation of the developer: Trusted, Unknown, Warning, Critical,” he says.

“We are almost 100% sure that apps with a trusted badge are safe. But new apps from new developers, [carry] more risk in spite of all the technology we have developed to detect it. They keep the badge ‘unknown‘ until the community vote it as trusted. This can take some weeks, it can take some months.”

“Of course, if our anti-malware systems detect problems, we classify it as ‘critical’ and the users don’t see it at all,” he adds.

Almost 100% secure then. But if Google’s counter claim to justify choking off access to Aptoide is that the app “can download potentially harmful apps” the same can very well be said of its Play Store. And Google certainly isn’t encouraging Android users to pause that.

On the competition front, Aptoide presents a clear challenge to Google’s Android revenues because it offers developers a more attractive revenue split — taking just 19%, rather than the 30% cut Google takes off of Play Store wares. (Aptoide couches the latter as “Google’s abusive conditions”.)

So if Android users can be persuaded to switch from Play to Aptoide, developers stand to gain — and arguably users too, as app costs would be lower.

While, on the flip side, Google faces its 30% cut being circumvented. Or else it could be forced to reduce how much it takes from developers to give them a greater incentive to stock its shelves with great apps.

As with any app store business, Aptoide’s store of course requires scale to function. And it’s exactly that scale which Google’s behavior has negatively impacted since it began flagging the app as insecure a year ago, in June 2018, squeezing the rival’s user-base by up to a fifth, as Aptoide tells it.

Trezentos says Google’s flagging of its app store affects all markets and “continues to this day” — despite a legal ruling in its favor last fall, when a court in Portugal ordered Google to stop removing Aptoide without users’ permission.

“Google is ignoring the injunction result and is disregarding the national court. No company, independently of the size, should be above court decisions. But it seems that is the case with Google,” he says.

“Our legal team believe that the decision applies to 82 countries but we are pursuing first the total compliance with the decision in Portugal. From there, we will seek the extension to other jurisdictions.”

“We tried to contact Google several times, via Google Play Protect feedback form and directly through LinkedIn, and we’ve not had any feedback from Google. No reasons were presented. No explanation, although we are talking about hiding Aptoide in millions of users’ phones,” he adds.

“Our point in court it’s simple: Google is using the control at operating system level to block competitors at the services level (app store, in this case). As Google has a dominant position, that’s not legal. Court [in Portugal] confirmed and order Google to stop. Google didn’t obey.”

Aptoide has not filed an antitrust complaint against Google in the US — focusing its legal efforts on that front on local submissions to the European Commission.

But Trezentos says it’s “willing to cooperate with US authorities and provide factual data that shows that Google has acted with anti-competitive behaviour” (although he says no one has come knocking to request such collaboration yet.)

In Europe, the Commission’s 2018 antitrust decision was focused on Android licensing terms — which led to Google tweaking the terms it offers Android OEMs selling in Europe last fall.

Despite some changes rivals continue to complain that its changes do not go far enough to create a level playing field for competition.

There has also not been any relief for Aptoide from the record breaking antitrust enforcement. On the contrary Google appears to have dug in against this competitive threat.

“The remedies are positive but the scope is very limited to OEM partnerships,” says Trezentos of the EC’s 2018 Android antitrust decision. “We proposed additionally that Google would be obliged to give the same access privileges over the operating system to credible competitors.”

We’ve reached out to the Commission for comment on Aptoide’s complaint.

While it’s at least technically possible for an OEM to offer an Android device in Europe which includes key Google services (like search and maps) but preloads an alternative app store, rather than Google Play, it would be a brave device maker indeed to go against the consumer grain and not give smartphone buyers the mainstream store they expect.

So, as yet, there’s little high level regulatory relief to help Aptoide. And it may take a higher court than a Portuguese national court to force Google to listen.

But with US authorities fast dialling up their scrutiny of Mountain View, Aptoide may find a new audience for its complaint.

“The increased awareness to Google practices is reaching the regulators,” Trezentos agrees, adding: “Those practices harm competition and in the end are bad for developers and mobile users.”

We reached out to Google with questions about its treatment of Aptoide’s rival app store — but at the time of writing the company had not responded with any comment. 

There have also been some recent rumors that Aptoide is in talks to supply its alternative app store for Huawei devices — in light of the US/China trade uncertainties, and the executive order barring US companies from doing business with the Chinese tech giant, which have led to reports that Google intends to withdraw key Android services like Play from the company.

But Trezentos pours cold water on these rumors, suggesting there has been no change of cadence in its discussions with Huawei.

“We work with three of top six mobile OEMs in the world. Huawei is not one of them yet,” he tells us. “Our Shengzhen office had been in conversations for some months and they are testing our APIs. This process has not been accelerated or delayed by the recent news.”

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Ahead of third antitrust ruling, Google announces fresh tweaks to Android in Europe

Posted by | Android, antitrust, Apple, Apps, chrome os, competition commission, DuckDuckGo, Europe, european commission, european union, France, G Suite, Google, Image search, joaquin almunia, Jolla, Kent Walker, Margrethe Vestager, Mobile, operating systems, play store, Policy, Qwant, search app, search engine, search engines, smartphone, Spotify, travel search | No Comments

Google is widely expected to be handed a third antitrust fine in Europe this week, with reports suggesting the European Commission’s decision in its long-running investigation of AdSense could land later today.

Right on cue the search giant has PRed another Android product tweak — which it bills as “supporting choice and competition in Europe”.

In the coming months Google says it will start prompting users of existing and new Android devices in Europe to ask which browser and search apps they would like to use.

This follows licensing changes for Android in Europe which Google announced last fall, following the Commission’s $5BN antitrust fine for anti-competitive behavior related to how it operates the dominant smartphone OS.

tl;dr competition regulation can shift policy and product.

Albeit, the devil will be in the detail of Google’s self-imposed ‘remedy’ for Android browser and search apps.

Which means how exactly the user is prompted will be key — given tech giants are well-versed in the manipulative arts of dark pattern design, enabling them to create ‘consent’ flows that deliver their desired outcome.

A ‘choice’ designed in such a way — based on wording, button/text size and color, timing of prompt and so on — to promote Google’s preferred browser and search app choice by subtly encouraging Android users to stick with its default apps may not actually end up being much of a ‘choice’.

According to Reuters the prompt will surface to Android users via the Play Store. (Though the version of Google’s blog post we read did not include that detail.)

Using the Play Store for the prompt would require an Android device to have Google’s app store pre-loaded — and licensing tweaks made to the OS in Europe last year were supposedly intended to enable OEMs to choose to unbundle Google apps from Android forks. Ergo making only the Play Store the route for enabling choice would be rather contradictory. (As well as spotlighting Google’s continued grip on Android.)

Add to that Google has the advantage of massive brand dominance here, thanks to its kingpin position in search, browsers and smartphone platforms.

So again the consumer decision is weighted in its favor. Or, to put it another way: ‘This is Google; it can afford to offer a ‘choice’.’

In its blog post getting out ahead of the Commission’s looming AdSense ruling, Google’s SVP of global affairs, Kent Walker, writes that the company has been “listening carefully to the feedback we’re getting” vis-a-vis competition.

Though the search giant is actually appealing both antitrust decisions. (The other being a $2.7BN fine it got slapped with two years ago for promoting its own shopping comparison service and demoting rivals’.)

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search,” Walker continues. “In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app.”

Other opinions are available on those changes too.

Such as French pro-privacy Google search rival Qwant, which last year told us how those licensing changes still make it essentially impossible for smartphone makers to profit off of devices that don’t bake in Google apps by default. (More recently Qwant’s founder condensed the situation to “it’s a joke“.)

Qwant and another European startup Jolla, which leads development of an Android alternative smartphone platform called Sailfish — and is also a competition complainant against Google in Europe — want regulators to step in and do more.

The Commission has said it is closely monitoring changes made by Google to determine whether or not the company has complied with its orders to stop anti-competitive behavior.

So the jury is still out on whether any of its tweaks sum to compliance. (Google says so but that’s as you’d expect — and certainly doesn’t mean the Commission will agree.)

In its Android decision last summer the Commission judged that Google’s practices harmed competition and “further innovation” in the wider mobile space, i.e. beyond Internet search — because it prevented other mobile browsers from competing effectively with its pre-installed Chrome browser.

So browser choice is a key component here. And ‘effective competition’ is the bar Google’s homebrew ‘remedies’ will have to meet.

Still, the company will be hoping its latest Android tweaks steer off further Commission antitrust action. Or at least generate more fuzz and fuel for its long-game legal appeal.

Current EU competition commissioner, Margrethe Vestager, has flagged for years that the division is also fielding complaints about other Google products, including travel search, image search and maps. Which suggests Google could face fresh antitrust investigations in future, even as the last of the first batch is about to wrap up.

The FT reports that Android users in the European economic area last week started seeing links to rival websites appearing above Google’s answer box for searches for products, jobs or businesses — with the rival links appearing above paid results links to Google’s own services.

The newspaper points out that tweak is similar to a change promoted by Google in 2013, when it was trying to resolve EU antitrust concerns under the prior commissioner, Joaquín Almunia.

However rivals at the time complained the tweak was insufficient. The Commission subsequently agreed — and under Vestager’s tenure went on to hit Google with antitrust fines.

Walker doesn’t mention these any of additional antitrust complaints swirling around Google’s business in Europe, choosing to focus on highlighting changes it’s made in response to the two extant Commission antitrust rulings.

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search. In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app,” he writes.

Nor does he make mention of a recent change Google quietly made to the lists of default search engine choices in its Chrome browser — which expanded the “choice” he claims the company offers by surfacing more rivals. (The biggest beneficiary of that tweak is privacy search rival DuckDuckGo, which suddenly got added to the Chrome search engine lists in around 60 markets. Qwant also got added as a default choice in France.)

Talking about Android specifically Walker instead takes a subtle indirect swipe at iOS maker Apple — which now finds itself the target of competition complaints in Europe, via music streaming rival Spotify, and is potentially facing a Commission probe of its own (albeit, iOS’ marketshare in Europe is tiny vs Android). So top deflecting Google.

“On Android phones, you’ve always been able to install any search engine or browser you want, irrespective of what came pre-installed on the phone when you bought it. In fact, a typical Android phone user will usually install around 50 additional apps on their phone,” Walker writes, drawing attention to the fact that Apple does not offer iOS users as much of a literal choice as Google does.

“Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones,” he adds, saying: “This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

We’ve reached out to Commission for comment, and to Google with questions about the design of its incoming browser and search app prompts for Android users in Europe and will update this report with any response.

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The other smartphone business

Posted by | africa, antitrust, Asia, Bolivia, China, data protection, Europe, finland, GDPR, General Data Protection Regulation, geopolitics, google-android, india, Jalasoft, Jolla, Mobile, mobile linux, privacy, Rostelecom, russia, sailfish, Sami Pienimäki, Security, Startups, TC | No Comments

With the smartphone operating system market sewn up by Google’s Android platform, which has a close to 90% share globally, leaving Apple’s iOS a slender (but lucrative) premium top-slice, a little company called Jolla and its Linux-based Sailfish OS is a rare sight indeed: A self-styled ‘independent alternative’ that’s still somehow in business.

The Finnish startup’s b2b licensing sales pitch is intended to appeal to corporates and governments that want to be able to control their own destiny where device software is concerned.

And in a world increasingly riven with geopolitical tensions that pitch is starting to look rather prescient.

Political uncertainties around trade, high tech espionage risks and data privacy are translating into “opportunities” for the independent platform player — and helping to put wind in Jolla’s sails long after the plucky Sailfish team quit their day jobs for startup life.

Building an alternative to Google Android

Jolla was founded back in 2011 by a band of Nokia staffers who left the company determined to carry on development of mobile Linux as the European tech giant abandoned its own experiments in favor of pivoting to Microsoft’s Windows Phone platform. (Fatally, as it would turn out.)

Nokia exited mobile entirely in 2013, selling the division to Microsoft. It only returned to the smartphone market in 2017, via a brand-licensing arrangement, offering made-in-China handsets running — you guessed it — Google’s Android OS.

If the lesson of the Jolla founders’ former employer is ‘resistance to Google is futile’ they weren’t about to swallow that. The Finns had other ideas.

Indeed, Jolla’s indie vision for Sailfish OS is to support a whole shoal of differently branded, regionally flavored and independently minded (non-Google-led) ecosystems all swimming around in parallel. Though getting there means not just surviving but thriving — and doing so in spite of the market being so thoroughly dominated by the U.S. tech giant.

TechCrunch spoke to Jolla ahead of this year’s Mobile World Congress tradeshow where co-founder and CEO, Sami Pienimäki, was taking meetings on the sidelines. He told us his hope is for Jolla to have a partner booth of its own next year — touting, in truly modest Finnish fashion, an MWC calendar “maybe fuller than ever” with meetings with “all sorts of entities and governmental representatives”.

Jolla co-founder, Sami Pienimaki, showing off a Jolla-branded handset in May 2013, back when the company was trying to attack the consumer smartphone space. 
(Photo credit: KIMMO MANTYLA/AFP/Getty Images)

Even a modestly upbeat tone signals major progress here because an alternative smartphone platform licensing business is — to put it equally mildly — an incredibly difficult tech business furrow to plough.

Jolla almost died at the end of 2015 when the company hit a funding crisis. But the plucky Finns kept paddling, jettisoning their early pursuit of consumer hardware (Pienimäki describes attempting to openly compete with Google in the consumer smartphone space as essentially “suicidal” at this point) to narrow their focus to a b2b licensing play.

The early b2b salespitch targeted BRIC markets, with Jolla hitting the road to seek buy in for a platform it said could be moulded to corporate or government needs while still retaining the option of Android app compatibility.

Then in late 2016 signs of a breakthrough: Sailfish gained certification in Russia for government and corporate use.

Its licensing partner in the Russian market was soon touting the ability to go “absolutely Google-free!“.

Buy in from Russia

Since then the platform has gained the backing of Russian telco Rostelecom, which acquired Jolla’s local licensing customer last year (as well as becoming a strategic investor in Jolla itself in March 2018 — “to ensure there is a mutual interest to drive the global Sailfish OS agenda”, as Pienimäki puts it).

Rostelecom is using the brand name ‘Aurora OS‘ for Sailfish in the market which Pienimäki says is “exactly our strategy” — likening it to how Google’s Android has been skinned with different user experiences by major OEMs such as Samsung and Huawei.

“What we offer for our customers is a fully independent, regional licence and a tool chain so that they can develop exactly this kind of solution,” he tells TechCrunch. “We have come to a maturity point together with Rostelecom in the Russia market, and it was natural move plan together, that they will take a local identity and proudly carry forward the Sailfish OS ecosystem development in Russia under their local identity.”

“It’s fully compatible with Sailfish operating system, it’s based on Sailfish OS and it’s our joint interest, of course, to make it fly,” he adds. “So that as we, hopefully, are able to extend this and come out to public with other similar set-ups in different countries those of course — eventually, if they come to such a fruition and maturity — will then likely as well have their own identities but still remain compatible with the global Sailfish OS.”

Jolla says the Russian government plans to switch all circa 8M state officials to the platform by the end of 2021 — under a project expected to cost RUB 160.2 billion (~$2.4BN). (A cut of which will go to Jolla in licensing fees.)

It also says Sailfish-powered smartphones will be “recommended to municipal administrations of various levels,” with the Russian state planning to allocate a further RUB 71.3 billion (~$1.1BN) from the federal budget for that. So there’s scope for deepening the state’s Sailfish uptake.

Russian Post is one early customer for Jolla’s locally licensed Sailfish flavor. Having piloted devices last year, Pienimäki says it’s now moving to a full commercial deployment across the whole organization — which has around 300,000 employees (to give a sense of how many Sailfish powered devices could end up in the hands of state postal workers in Russia).

A rugged Sailfish-powered device piloted by Russian post

Jolla is not yet breaking out end users for Sailfish OS per market but Pienimäki says that overall the company is now “clearly above” 100k (and below 500k) devices globally.

That’s still of course a fantastically tiny number if you compare it to the consumer devices market — top ranked Android smartphone maker Samsung sold around 70M handsets in last year’s holiday quarter, for instance — but Jolla is in the b2b OS licensing business, not the handset making business. So it doesn’t need hundreds of millions of Sailfish devices to ship annually to turn a profit.

Scaling a royalty licensing business to hundreds of thousands of users is sums to “good business”, , says Pienimäki, describing Jolla’s business model for Sailfish as “practically a royalty per device”.

“The success we have had in the Russian market has populated us a lot of interesting new opening elsewhere around the world,” he continues. “This experience and all the technology we have built together with Open Mobile Platform [Jolla’s Sailfish licensing partner in Russia which was acquired by Rostelecom] to enable that case — that enables a number of other cases. The deployment plan that Rostelecom has for this is very big. And this is now really happening and we are happy about it.”

Jolla’s “Russia operation” is now beginning “a mass deployment phase”, he adds, predicting it will “quickly ramp up the volume to very sizeable”. So Sailfish is poised to scale.

Step 3… profit?

While Jolla is still yet to turn a full-year profit Pienimäki says several standalone months of 2018 were profitable, and he’s no longer worried whether the business is sustainable — asserting: “We don’t have any more financial obstacles or threats anymore.”

It’s quite the turnaround of fortunes, given Jolla’s near-death experience a few years ago when it almost ran out of money, after failing to close a $10.6M Series C round, and had to let go of half its staff.

It did manage to claw in a little funding at the end of 2015 to keep going, albeit as much leaner fish. But bagging Russia as an early adopter of its ‘independent’ mobile Linux ecosystem looks to have been the key tipping point for Jolla to be able to deliver on the hard-graft ecosystem-building work it’s been doing all along the way. And Pienimäki now expresses easy confidence that profitability will flow “fairly quickly” from here on in.

“It’s not an easy road. It takes time,” he says of the ecosystem-building company Jolla hard-pivoted to at its point of acute financial distress. “The development of this kind of business — it requires patience and negotiation times, and setting up the ecosystem and ecosystem partners. It really requires patience and takes a lot of time. And now we have come to this point where actually there starts to be an ecosystem which will then extend and start to carry its own identity as well.”

In further signs of Jolla’s growing confidence he says it hired more than ten people last year and moved to new and slightly more spacious offices — a reflection of the business expanding.

“It’s looking very good and nice for us,” Pienimäki continues. “Let’s say we are not taking too much pressure, with our investors and board, that what is the day that we are profitable. It’s not so important anymore… It’s clear that that is soon coming — that very day. But at the same time the most important is that the business case behind is proven and it is under aggressive deployment by our customers.”

The main focus for the moment is on supporting deployments to ramp up in Russia, he says, emphasizing: “That’s where we have to focus.” (Literally he says “not screwing up” — and with so much at stake you can see why nailing the Russia case is Jolla’s top priority.)

While the Russian state has been the entity most keen to embrace an alternative (non-U.S.-led) mobile OS — perhaps unsurprisingly — it’s not the only place in the world where Jolla has irons in the fire.

Another licensing partner, Bolivian IT services company Jalasoft, has co-developed a Sailfish-powered smartphone called Accione.

Jalasoft’s ‘liberty’-touting Accione Sailfish smartphone

It slates the handset on its website as being “designed for Latinos by Latinos”. “The digitalization of the economy is inevitable and, if we do not control the foundation of this digitalization, we have no future,” it adds.

Jalasoft founder and CEO Jorge Lopez says the company’s decision to invest effort in kicking the tyres of Jolla’s alternative mobile ecosystem is about gaining control — or seeking “technological libration” as the website blurb puts it.

“With Sailfish OS we have control of the implementation, while with Android it is the opposite,” Lopez tells TechCrunch. “We are working on developing smart buildings and we need a private OS that is not Android or iOS. This is mainly because our product will allow the end user to control the whole building and doing this with Android or iOS a hackable OS will bring concerns on security.”

Lopez says Jalasoft is using Accione as its development platform — “to gather customer feedback and to further develop our solution” — so the project clearly remains in an early phase, and he says that no more devices are likely to be announced this year.

But Jolla can point to more seeds being sewn with the potential, with work, determination and patience, to sprout into another sizeable crop of Sailfish-powered devices down the line.

Complexity in China

Even more ambitiously Jolla is also targeting China, where investment has been taken in to form a local consortium to develop a Chinese Sailfish ecosystem.

Although Pienimäki cautions there’s still much work to be done to bring Sailfish to market in China.

“We completed a major pilot with our licensing customer, Sailfish China Consortium, in 2017-18,” he says, giving an update on progress to date. “The public in market solution is not there yet. That is something that we are working together with the customer — hopefully we can see it later this year on the market. But these things take time. And let’s say that we’ve been somewhat surprised at how complex this kind of decision-making can be.”

“It wasn’t easy in Russia — it took three years of tight collaboration together with our Russian partners to find a way. But somehow it feels that it’s going to take even more in China. And I’m not necessarily talking about calendar time — but complexity,” he adds.

While there’s no guarantee of success for Jolla in China, the potential win is so big given the size of the market that even if they can only carve out a tiny slice, such as a business or corporate sector, it’s still worth going after. And he points to the existence of a couple of native mobile Linux operating systems he reckons could make “very lucrative partners”.

That said, the get-to-market challenge for Jolla in China is clearly distinctly different vs the rest of the world. This is because Android has developed into an independent (i.e. rather than Google-led) ecosystem in China as a result of state restrictions on the Internet and Internet companies. So the question is what could Sailfish offer that forked Android doesn’t already?

An Oppo Android powered smartphone on show at MWC 2017

Again, Jolla is taking the long view that ultimately there will be appetite — and perhaps also state-led push — for a technology platform bolster against political uncertainty in U.S.-China relations.

“What has happened now, in particular last year, is — because of the open trade war between the nations — many of the technology vendors, and also I would say the Chinese government, has started to gradually tighten their perspective on the fact that ‘hey simply it cannot be a long term strategy to just keep forking Android’. Because in the end of the day it’s somebody else’s asset. So this is something that truly creates us the opportunity,” he suggests.

“Openly competing with the fact that there are very successful Android forks in China, that’s going to be extremely difficult. But — let’s say — tapping into the fact that there are powers in that nation that wish that there would be something else than forking Android, combined with the fact that there is already something homegrown in China which is not forking Android — I think that’s the recipe that can be successful.”

Not all Jolla’s Sailfish bets have paid off, of course. An earlier foray by an Indian licensing partner into the consumer handset market petered out. Albeit, it does reinforce their decision to zero in on government and corporate licensing.

“We got excellent business connections,” says Pienimäki of India, suggesting also that it’s still a ‘watch this space’ for Jolla. The company has a “second move” in train in the market that he’s hopeful to be talking about publicly later this year.

It’s also pitching Sailfish in Africa. And in markets where target customers might not have their own extensive in-house IT capability to plug into Sailfish co-development work Pienimäki says it’s offering a full solution — “a ready made package”, together with partners, including device management, VPN, secure messaging and secure email — which he argues “can be still very lucrative business cases”.

Looking ahead and beyond mobile, Pienimäki suggests the automotive industry could be an interesting target for Sailfish in the future — though not literally plugging the platform into cars; but rather licensing its technologies where appropriate — arguing car makers are also keen to control the tech that’s going into their cars.

“They really want to make sure that they own the cockpit. It’s their property, it’s their brand and they want to own it — and for a reason,” he suggests, pointing to the clutch of major investments from car companies in startups and technologies in recent years.

“This is definitely an interesting area. We are not directly there ourself — and we are not capable to extend ourself there but we are discussing with partners who are in that very business whether they could utilize our technologies there. That would then be more or less like a technology licensing arrangement.”

A trust balancing model

While Jolla looks to be approaching a tipping point as a business, in terms of being able to profit off of licensing an alternative mobile platform, it remains a tiny and some might say inconsequential player on the global mobile stage.

Yet its focus on building and maintaining trusted management and technology architectures also looks timely — again, given how geopolitical spats are intervening to disrupt technology business as usual.

Chinese giant Huawei used an MWC keynote speech last month to reject U.S.-led allegations that its 5G networking technology could be repurposed as a spying tool by the Chinese state. And just this week it opened a cybersecurity transparency center in Brussels, to try to bolster trust in its kit and services — urging industry players to work together on agreeing standards and structures that everyone can trust.

In recent years U.S.-led suspicions attached to Russia have also caused major headaches for security veteran Kaspersky — leading the company to announce its own trust and transparency program and decentralize some of its infrastructure, including by spinning up servers in Europe last year.

Businesses finding ways to maintain and deepen the digital economy in spite of a little — or even a lot — of cross-border mistrust may well prove to be the biggest technology challenge of all moving forward.

Especially as next-gen 5G networks get rolled out — and their touted ‘intelligent connectivity’ reaches out to transform many more types of industries, bringing new risks and regulatory complexity.

The geopolitical problem linked to all this boils down to how to trust increasing complex technologies without any one entity being able to own and control all the pieces. And Jolla’s business looks interesting in light of that because it’s selling the promise of neutral independence to all its customers, wherever they hail from — be it Russia, LatAm, China, Africa or elsewhere — which makes its ability to secure customer trust not just important but vital to its success.

Indeed, you could argue its customers are likely to rank above average on the ‘paranoid’ scale, given their dedicated search for an alternative (non-U.S.-led) mobile OS in the first place.

“It’s one of the number one questions we get,” admits Pienimäki, discussing Jolla’s trust balancing act — aka how it manages and maintains confidence in Sailfish’s independence, even as it takes business backing and code contributions from a state like Russia.

“We tell about our reference case in Russia and people quickly ask ‘hey okay, how can I trust that there is no blackbox inside’,” he continues, adding: “This is exactly the core question and this is exactly the problem we have been able to build a solution for.”

Jolla’s solution sums to one line: “We create a transparent platform and on top of fully transparent platform you can create secure solutions,” as Pienimäki puts it.

“The way it goes is that Jolla with Sailfish OS is always offering the transparent Sailfish operating system core, on source code level, all the time live, available for all the customers. So all the customers constantly, in real-time, have access to our source code. Most of it’s in public open source, and the proprietary parts are also constantly available from our internal infrastructure. For all the customers, at the same time in real-time,” he says, fleshing out how it keeps customers on board with a continually co-developing software platform.

“The contributions we take from these customers are always on source code level only. We don’t take any binary blobs inside our software. We take only source code level contributions which we ourselves authorize, integrate and then we make available for all the customers at the very same moment. So that loopback in a way creates us the transparency.

“So if you want to be suspicion of the contributions of the other guys, so to say, you can always read it on the source code. It’s real-time. Always available for all the customers at the same time. That’s the model we have created.”

“It’s honestly quite a unique model,” he adds. “Nobody is really offering such a co-development model in the operating system business.

“Practically how Android works is that Google, who’s leading the Android development, makes the next release of Android software, then releases it under Android Open Source and then people start to backboard it — so that’s like ‘source, open’ in a way, not ‘open source’.”

Sailfish’s community of users also have real-time access to and visibility of all the contributions — which he dubs “real democracy”.

“People can actually follow it from the code-line all the time,” he argues. “This is really the core of our existence and how we can offer it to Russia and other countries without creating like suspicion elements each side. And that is very important.

“That is the only way we can continue and extend this regional licensing and we can offer it independently from Finland and from our own company.”

With global trade and technology both looking increasingly vulnerable to cross-border mistrust, Jolla’s approach to collaborative transparency may offer something of a model if other businesses and industries find they need to adapt themselves  in order for trade and innovation to keep moving forward in uncertain political times.

Antitrust and privacy uplift

Last but not least there’s regulatory intervention to consider.

A European Commission antitrust decision against Google’s Android platform last year caused headlines around the world when the company was slapped with a $5BN fine.

More importantly for Android rivals Google was also ordered to change its practices — leading to amended licensing terms for the platform in Europe last fall. And Pienimäki says Jolla was a “key contributor” to the Commission case against Android.

European competition commissioner Margrethe Vestager, on April 15, 2015 in Brussels, as the Commission said it would open an antitrust investigation into Google’s Android operating system. (Photo credit: JOHN THYS/AFP/Getty Images)

The new Android licensing terms make it (at least theoretically) possible for new types of less-heavily-Google-flavored Android devices to be developed for Europe. Though there have been complaints the licensing tweaks don’t go far enough to reset Google’s competitive Android advantage.

Asked whether Jolla has seen any positive impacts on its business following the Commission’s antitrust decision, Pienimäki responds positively, recounting how — “one or two weeks after the ruling” — Jolla received an inbound enquiry from a company in France that had felt hamstrung by Google requiring its services to be bundled with Android but was now hoping “to realize a project in a special sector”.

The company, which he isn’t disclosing at this stage, is interested in “using Sailfish and then having selected Android applications running in Sailfish but no connection with the Google services”.

“We’ve been there for five years helping the European Union authorities [to build the case] and explain how difficult it is to create competitive solutions in the smartphone market in general,” he continues. “Be it consumer or be it anything else. That’s definitely important for us and I don’t see this at all limited to the consumer sector. The very same thing has been a problem for corporate clients, for companies who provide specialized mobile device solutions for different kind of corporations and even governments.”

While he couches the Android ruling as a “very important” moment for Jolla’s business last year, he also says he hopes the Commission will intervene further to level the smartphone playing field.

“What I’m after here, and what I would really love to see, is that within the European Union we utilize Linux-based, open platform solution which is made in Europe,” he says. “That’s why we’ve been pushing this [antitrust action]. This is part of that. But in bigger scheme this is very good.”

He is also very happy with Europe’s General Data Protection Regulation (GDPR) — which came into force last May, plugging in a long overdue update to the bloc’s privacy rules with a much beefed up enforcement regime.

GDPR has been good for Jolla’s business, according to Pienimäki, who says interest is flowing its way from customers who now perceive a risk to using Android if customer data flows outside Europe and they cannot guarantee adequate privacy protections are in place.

“Already last spring… we have had plenty of different customer discussions with European companies who are really afraid that ‘hey I cannot offer this solution to my government or to my corporate customer in my country because I cannot guarantee if I use Android that this data doesn’t go outside the European Union’,” he says.

“You can’t indemnify in a way that. And that’s been really good for us as well.”

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Apple is selling the iPhone 7 and iPhone 8 in Germany again

Posted by | antitrust, Apple, apple inc, China, Europe, Federal Trade Commission, Germany, Intel, iPhone, lawsuit, licensing, Mobile, mobile phones, patent litigation, patents, Qorvo, Qualcomm, smartphone, standards-essential patents | No Comments

Two older iPhone models are back on sale in Apple stores in Germany — but only with Qualcomm chips inside.

The iPhone maker was forced to pull the iPhone 7 and iPhone 8 models from shelves in its online shop and physical stores in the country last month, after chipmaker Qualcomm posted security bonds to enforce a December court injunction it secured via patent litigation.

Apple told Reuters it had “no choice” but to stop using some Intel chips for handsets to be sold in Germany. “Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” it said in a statement provided to the news agency.

Apple and Qualcomm have been embroiled in an increasingly bitter global legal battle around patents and licensing terms for several years.

The litigation follows Cupertino’s move away from using only Qualcomm’s chips in iPhones after, in 2016, Apple began sourcing modem chips from rival Intel — dropping Qualcomm chips entirely for last year’s iPhone models. Though still using some Qualcomm chips for older iPhone models, as it will now for iPhone 7 and iPhone 8 units headed to Germany.

For these handsets Apple is swapping out Intel modems that contain chips from Qorvo which are subject to the local patent litigation injunction. (The litigation relates to a patented smartphone power management technology.) 

Hence Apple’s Germany webstore is once again listing the two older iPhone models for sale…

Newer iPhones containing Intel chips remain on sale in Germany because they do not containing the same components subject to the patent injunction.

“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Intel’s general counsel, Steven Rodgers, said in a statement to Reuters.

While Apple’s decision to restock its shelves with Qualcomm-only iPhone 7s and 8s represents a momentary victory for Qualcomm, a separate German court tossed another of its patent suits against Apple last month — dismissing it as groundless. (Qualcomm said it would appeal.)

The chipmaker has also been pursing patent litigation against Apple in China, and in December Apple appealed a preliminary injunction banning the import and sales of old iPhone models in the country.

At the same time, Qualcomm and Apple are both waiting the result of an antitrust trial brought against Qualcomm’s licensing terms in the U.S.

Two years ago the FTC filed charges against Qualcomm, accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.

The case was heard last month and is pending a verdict or settlement.

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Europe agrees platform rules to tackle unfair business practices

Posted by | Amazon, Android, antitrust, competition, e-commerce, eBay, EC, eCommerce, Europe, european commission, european parliament, european union, General Data Protection Regulation, Google, google search, Google Shopping, Margrethe Vestager, microsoft store, online marketplaces, online platforms, search engine, search engines, search results | No Comments

The European Union’s political institutions have reached agreement over new rules designed to boost transparency around online platform businesses and curb unfair practices to support traders and other businesses that rely on digital intermediaries for discovery and sales.

The European Commission proposed a regulation for fairness and transparency in online platform trading last April. And late yesterday the European Parliament, Council of the EU and Commission reached a political deal on regulating the business environment of platforms, announcing the accord in a press release today.

The political agreement paves the way for adoption and publication of the regulation, likely later this year. The rules will apply 12 months after that point.

Online platform intermediaries such as ecommerce marketplaces and search engines are covered by the new rules if they provide services to businesses established in the EU and which offer goods or services to consumers located in the EU.

The Commission estimates there are some 7,000 such platforms and marketplaces which will be covered by the regulation, noting this includes “world giants as well as very small start-ups”.

Under the new rules, sudden and unexpected account suspensions will be banned — with the Commission saying platforms will have to provide “clear reasons” for any termination and also possibilities for appeal.

Terms and conditions must also be “easily available and provided in plain and intelligible language”.

There must also be advance notice of changes — of at least 15 days, with longer notice periods applying for more complex changes.

For search engines the focus is on ranking transparency. And on that front dominant search engine Google has attracted more than its fair share of criticism in Europe from a range of rivals (not all of whom are European).

In 2017, the search giant was also slapped with a $2.7BN antitrust fine related to its price comparison service, Google Shopping. The EC found Google had systematically given prominent placement to its own search comparison service while also demoting rival services in search results. (Google rejects the findings and is appealing.)

Given the history of criticism of Google’s platform business practices, and the multi-year regulatory tug of war over anti-competitive impacts, the new transparency provisions look intended to make it harder for a dominant search player to use its market power against rivals.

Changing the online marketplace

The importance of legislating for platform fairness was flagged by the Commission’s antitrust chief, Margrethe Vestager, last summer — when she handed Google another very large fine ($5BN) for anti-competitive behavior related to its mobile platform Android.

Vestager said then she wasn’t sure breaking Google up would be an effective competition fix, preferring to push for remedies to support “more players to have a real go”, as her Android decision attempts to do. But she also stressed the importance of “legislation that will ensure that you have transparency and fairness in the business to platform relationship”.

If businesses have legal means to find out why, for example, their traffic has stopped and what they can do to get it back that will “change the marketplace, and it will change the way we are protected as consumers but also as businesses”, she argued.

Just such a change is now in sight thanks to EU political accord on the issue.

The regulation represents the first such rules for online platforms in Europe and — commissioners’ contend — anywhere in the world.

“Our target is to outlaw some of the most unfair practices and create a benchmark for transparency, at the same time safeguarding the great advantages of online platforms both for consumers and for businesses,” said Andrus Ansip, VP for the EU’s Digital Single Market initiative in a statement.

Elżbieta Bieńkowska, commissioner for internal market, industry, entrepreneurship, and SMEs, added that the rules are “especially designed with the millions of SMEs in mind”.

“Many of them do not have the bargaining muscle to enter into a dispute with a big platform, but with these new rules they have a new safety net and will no longer worry about being randomly kicked off a platform, or intransparent ranking in search results,” she said in another supporting statement.

In a factsheet about the new rules, the Commission specifies they cover third-party ecommerce market places (e.g. Amazon Marketplace, eBay, Fnac Marketplace, etc.); app stores (e.g. Google Play, Apple App Store, Microsoft Store etc.); social media for business (e.g. Facebook pages, Instagram used by makers/artists etc.); and price comparison tools (e.g. Skyscanner, Google Shopping etc.).

The regulation does not target every online platform. For example, it does not cover online advertising (or b2b ad exchanges), payment services, SEO services or services that do not intermediate direct transactions between businesses and consumers.

The Commission also notes that online retailers that sell their own brand products and/or don’t rely on third party sellers on their own platform are also excluded from the regulation, such as retailers of brands or supermarkets.

Where transparency is concerned, the rules require that regulated marketplaces and search engines disclose the main parameters they use to rank goods and services on their site “to help sellers understand how to optimise their presence” — with the Commission saying the aim is to support sellers without allowing gaming of the ranking system.

Some platform business practices will also require mandatory disclosure — such as for platforms that not only provide a marketplace for sellers but sell on their platform themselves, as does Amazon for example.

The ecommerce giant’s use of merchant data remains under scrutiny in the EU. Vestager revealed a preliminary antitrust probe of Amazon last fall — when she said her department was gathering information to “try to get a full picture”. She said her concern is dual platforms could gain an unfair advantage as a consequence of access to merchants’ data.

And, again, the incoming transparency rules look intended to shrink that risk — requiring what the Commission couches as exhaustive disclosure of “any advantage” a platform may give to their own products over others.

“They must also disclose what data they collect, and how they use it — and in particular how such data is shared with other business partners they have,” it continues, noting also that: “Where personal data is concerned, the rules of the GDPR [General Data Protection Regulation] apply.”

(GDPR of course places further transparency requirements on platforms by, for example, empowering individuals to request any personal data held on them, as well as the reasons why their information is being processed.)

The platform regulation also includes new avenues for dispute resolution by requiring platforms set up an internal complaint-handling system to assist business users.

“Only the smallest platforms in terms of head count or turnover will be exempt from this obligation,” the Commission notes. (The exemption limit is set at fewer than 50 staff and less than €10M revenue.)

It also says: “Platforms will have to provide businesses with more options to resolve a potential problem through mediators. This will help resolve more issues out of court, saving businesses time and money.”

But, at the same time, the new rules allow business associations to take platforms to court to stop any non-compliance — mirroring a provision in the GDPR which also allows for collective enforcement and redress of individual privacy rights (where Member States adopt it).

“This will help overcome fear of retaliation, and lower the cost of court cases for individual businesses, when the new rules are not followed,” the Commission argues.

“In addition, Member States can appoint public authorities with enforcement powers, if they wish, and businesses can turn to those authorities.”

One component of the regulation that appears to be being left up to EU Member States to tackle is penalties for non-compliance — with no clear regime of fines set out (as there is in GDPR). So it’s not clear whether the platform regulation might not have rather more bark than bite, at least initially.

“Member States shall need to take measures that are sufficiently dissuasive to ensure that the online intermediation platforms and search engines comply with the requirements in the Regulation,” the Commission writes in a section of its factsheet dealing with how to make sure platforms respect the new rules.

It also points again to the provision allowing business associations or organisations to take action in national courts on behalf of members — saying this offers a legal route to “stop or prohibit non-compliance with one or more of the requirements of the Regulation”. So, er, expect lawsuits.

The Commission says the rules will be subject to review within 18 months after they come into force — in a bid to ensure the regulation keeps pace with fast-paced tech developments.

A dedicated Online Platform Observatory has been established in the EU for the purpose of “monitoring the evolution of the market and the effective implementation of the rules”, it adds.

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Is Europe closing in on an antitrust fix for surveillance technologists?

Posted by | Android, antitrust, competition law, data protection, data protection law, DCMS committee, digital media, EC, Europe, european commission, european union, Facebook, General Data Protection Regulation, Germany, Giovanni Buttarelli, Google, instagram, Margrethe Vestager, Messenger, photo sharing, privacy, Social, social media, social networks, surveillance capitalism, TC, terms of service, United Kingdom, United States | No Comments

The German Federal Cartel Office’s decision to order Facebook to change how it processes users’ personal data this week is a sign the antitrust tide could at last be turning against platform power.

One European Commission source we spoke to, who was commenting in a personal capacity, described it as “clearly pioneering” and “a big deal”, even without Facebook being fined a dime.

The FCO’s decision instead bans the social network from linking user data across different platforms it owns, unless it gains people’s consent (nor can it make use of its services contingent on such consent). Facebook is also prohibited from gathering and linking data on users from third party websites, such as via its tracking pixels and social plugins.

The order is not yet in force, and Facebook is appealing, but should it come into force the social network faces being de facto shrunk by having its platforms siloed at the data level.

To comply with the order Facebook would have to ask users to freely consent to being data-mined — which the company does not do at present.

Yes, Facebook could still manipulate the outcome it wants from users but doing so would open it to further challenge under EU data protection law, as its current approach to consent is already being challenged.

The EU’s updated privacy framework, GDPR, requires consent to be specific, informed and freely given. That standard supports challenges to Facebook’s (still fixed) entry ‘price’ to its social services. To play you still have to agree to hand over your personal data so it can sell your attention to advertisers. But legal experts contend that’s neither privacy by design nor default.

The only ‘alternative’ Facebook offers is to tell users they can delete their account. Not that doing so would stop the company from tracking you around the rest of the mainstream web anyway. Facebook’s tracking infrastructure is also embedded across the wider Internet so it profiles non-users too.

EU data protection regulators are still investigating a very large number of consent-related GDPR complaints.

But the German FCO, which said it liaised with privacy authorities during its investigation of Facebook’s data-gathering, has dubbed this type of behavior “exploitative abuse”, having also deemed the social service to hold a monopoly position in the German market.

So there are now two lines of legal attack — antitrust and privacy law — threatening Facebook (and indeed other adtech companies’) surveillance-based business model across Europe.

A year ago the German antitrust authority also announced a probe of the online advertising sector, responding to concerns about a lack of transparency in the market. Its work here is by no means done.

Data limits

The lack of a big flashy fine attached to the German FCO’s order against Facebook makes this week’s story less of a major headline than recent European Commission antitrust fines handed to Google — such as the record-breaking $5BN penalty issued last summer for anticompetitive behaviour linked to the Android mobile platform.

But the decision is arguably just as, if not more, significant, because of the structural remedies being ordered upon Facebook. These remedies have been likened to an internal break-up of the company — with enforced internal separation of its multiple platform products at the data level.

This of course runs counter to (ad) platform giants’ preferred trajectory, which has long been to tear modesty walls down; pool user data from multiple internal (and indeed external sources), in defiance of the notion of informed consent; and mine all that personal (and sensitive) stuff to build identity-linked profiles to train algorithms that predict (and, some contend, manipulate) individual behavior.

Because if you can predict what a person is going to do you can choose which advert to serve to increase the chance they’ll click. (Or as Mark Zuckerberg puts it: ‘Senator, we run ads.’)

This means that a regulatory intervention that interferes with an ad tech giant’s ability to pool and process personal data starts to look really interesting. Because a Facebook that can’t join data dots across its sprawling social empire — or indeed across the mainstream web — wouldn’t be such a massive giant in terms of data insights. And nor, therefore, surveillance oversight.

Each of its platforms would be forced to be a more discrete (and, well, discreet) kind of business.

Competing against data-siloed platforms with a common owner — instead of a single interlinked mega-surveillance-network — also starts to sound almost possible. It suggests a playing field that’s reset, if not entirely levelled.

(Whereas, in the case of Android, the European Commission did not order any specific remedies — allowing Google to come up with ‘fixes’ itself; and so to shape the most self-serving ‘fix’ it can think of.)

Meanwhile, just look at where Facebook is now aiming to get to: A technical unification of the backend of its different social products.

Such a merger would collapse even more walls and fully enmesh platforms that started life as entirely separate products before were folded into Facebook’s empire (also, let’s not forget, via surveillance-informed acquisitions).

Facebook’s plan to unify its products on a single backend platform looks very much like an attempt to throw up technical barriers to antitrust hammers. It’s at least harder to imagine breaking up a company if its multiple, separate products are merged onto one unified backend which functions to cross and combine data streams.

Set against Facebook’s sudden desire to technically unify its full-flush of dominant social networks (Facebook Messenger; Instagram; WhatsApp) is a rising drum-beat of calls for competition-based scrutiny of tech giants.

This has been building for years, as the market power — and even democracy-denting potential — of surveillance capitalism’s data giants has telescoped into view.

Calls to break up tech giants no longer carry a suggestive punch. Regulators are routinely asked whether it’s time. As the European Commission’s competition chief, Margrethe Vestager, was when she handed down Google’s latest massive antitrust fine last summer.

Her response then was that she wasn’t sure breaking Google up is the right answer — preferring to try remedies that might allow competitors to have a go, while also emphasizing the importance of legislating to ensure “transparency and fairness in the business to platform relationship”.

But it’s interesting that the idea of breaking up tech giants now plays so well as political theatre, suggesting that wildly successful consumer technology companies — which have long dined out on shiny convenience-based marketing claims, made ever so saccharine sweet via the lure of ‘free’ services — have lost a big chunk of their populist pull, dogged as they have been by so many scandals.

From terrorist content and hate speech, to election interference, child exploitation, bullying, abuse. There’s also the matter of how they arrange their tax affairs.

The public perception of tech giants has matured as the ‘costs’ of their ‘free’ services have scaled into view. The upstarts have also become the establishment. People see not a new generation of ‘cuddly capitalists’ but another bunch of multinationals; highly polished but remote money-making machines that take rather more than they give back to the societies they feed off.

Google’s trick of naming each Android iteration after a different sweet treat makes for an interesting parallel to the (also now shifting) public perceptions around sugar, following closer attention to health concerns. What does its sickly sweetness mask? And after the sugar tax, we now have politicians calling for a social media levy.

Just this week the deputy leader of the main opposition party in the UK called for setting up a standalone Internet regulatory with the power to break up tech monopolies.

Talking about breaking up well-oiled, wealth-concentration machines is being seen as a populist vote winner. And companies that political leaders used to flatter and seek out for PR opportunities find themselves treated as political punchbags; Called to attend awkward grilling by hard-grafting committees, or taken to vicious task verbally at the highest profile public podia. (Though some non-democratic heads of state are still keen to press tech giant flesh.)

In Europe, Facebook’s repeat snubs of the UK parliament’s requests last year for Zuckerberg to face policymakers’ questions certainly did not go unnoticed.

Zuckerberg’s empty chair at the DCMS committee has become both a symbol of the company’s failure to accept wider societal responsibility for its products, and an indication of market failure; the CEO so powerful he doesn’t feel answerable to anyone; neither his most vulnerable users nor their elected representatives. Hence UK politicians on both sides of the aisle making political capital by talking about cutting tech giants down to size.

The political fallout from the Cambridge Analytica scandal looks far from done.

Quite how a UK regulator could successfully swing a regulatory hammer to break up a global Internet giant such as Facebook which is headquartered in the U.S. is another matter. But policymakers have already crossed the rubicon of public opinion and are relishing talking up having a go.

That represents a sea-change vs the neoliberal consensus that allowed competition regulators to sit on their hands for more than a decade as technology upstarts quietly hoovered up people’s data and bagged rivals, and basically went about transforming themselves from highly scalable startups into market-distorting giants with Internet-scale data-nets to snag users and buy or block competing ideas.

The political spirit looks willing to go there, and now the mechanism for breaking platforms’ distorting hold on markets may also be shaping up.

The traditional antitrust remedy of breaking a company along its business lines still looks unwieldy when faced with the blistering pace of digital technology. The problem is delivering such a fix fast enough that the business hasn’t already reconfigured to route around the reset. 

Commission antitrust decisions on the tech beat have stepped up impressively in pace on Vestager’s watch. Yet it still feels like watching paper pushers wading through treacle to try and catch a sprinter. (And Europe hasn’t gone so far as trying to impose a platform break up.) 

But the German FCO decision against Facebook hints at an alternative way forward for regulating the dominance of digital monopolies: Structural remedies that focus on controlling access to data which can be relatively swiftly configured and applied.

Vestager, whose term as EC competition chief may be coming to its end this year (even if other Commission roles remain in potential and tantalizing contention), has championed this idea herself.

In an interview on BBC Radio 4’s Today program in December she poured cold water on the stock question about breaking tech giants up — saying instead the Commission could look at how larger firms got access to data and resources as a means of limiting their power. Which is exactly what the German FCO has done in its order to Facebook. 

At the same time, Europe’s updated data protection framework has gained the most attention for the size of the financial penalties that can be issued for major compliance breaches. But the regulation also gives data watchdogs the power to limit or ban processing. And that power could similarly be used to reshape a rights-eroding business model or snuff out such business entirely.

#GDPR allows imposing a permanent ban on data processing. This is the nuclear option. Much more severe than any fine you can imagine, in most cases. https://t.co/X772NvU51S

— Lukasz Olejnik (@lukOlejnik) January 28, 2019

The merging of privacy and antitrust concerns is really just a reflection of the complexity of the challenge regulators now face trying to rein in digital monopolies. But they’re tooling up to meet that challenge.

Speaking in an interview with TechCrunch last fall, Europe’s data protection supervisor, Giovanni Buttarelli, told us the bloc’s privacy regulators are moving towards more joint working with antitrust agencies to respond to platform power. “Europe would like to speak with one voice, not only within data protection but by approaching this issue of digital dividend, monopolies in a better way — not per sectors,” he said. “But first joint enforcement and better co-operation is key.”

The German FCO’s decision represents tangible evidence of the kind of regulatory co-operation that could — finally — crack down on tech giants.

Blogging in support of the decision this week, Buttarelli asserted: “It is not necessary for competition authorities to enforce other areas of law; rather they need simply to identity where the most powerful undertakings are setting a bad example and damaging the interests of consumers.  Data protection authorities are able to assist in this assessment.”

He also had a prediction of his own for surveillance technologists, warning: “This case is the tip of the iceberg — all companies in the digital information ecosystem that rely on tracking, profiling and targeting should be on notice.”

So perhaps, at long last, the regulators have figured out how to move fast and break things.

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