AllThingsD » business practices

Why The Big Smile, Mr. Ballmer? Has Google Been Slapped With an Antitrust Probe in Europe?

John Paczkowski — Wed, 24 Feb 2010 08:01:28 +0000

And there it is, Google’s European antitrust review.

The European Commission has opened an investigation into Google’s dominance of the search and search advertising markets in Europe at the behest of three complainants: French legal search engine ejustice.fr, U.K. price-comparison venture Foundem, and Ciao!, a product review and price-comparison site.

Perhaps unsurprisingly, the latter two have ties to Microsoft. Ciao is a subsidiary of Google’s Redmond rival and Foundem is a member of Microsoft-funded organization ICOMP.

In any event, the three companies have all accused Google (GOOG) of undermining their business in some way, either by unfairly demoting their rankings in its search results or by saddling them with onerous terms and conditions. And the European Commission has taken their complaints seriously enough to look into them.

The inquiry is at an “early, fact-finding stage” and may not result in further action, but it has clearly got Google worried. It was the EC, after all, that ultimately beat Microsoft (MSFT) into submission, forcing the company to alter its business practices.

In a post to Google’s Public Policy Blog entitled “Committed to Competing Fairly,” Julia Holtz, the company’s senior competition counsel, denied the charges against Google, saying the company has done nothing wrong.

“Though each case raises slightly different issues, the question they ultimately pose is whether Google is doing anything to choke off competition or hurt our users and partners,” she wrote. “This is not the case. We always try to listen carefully if someone has a real concern and we work hard to put our users’ interests first and to compete fair and square in the market.”

Feds Launch Antitrust Probe of IBM

John Paczkowski — Thu, 08 Oct 2009 18:00:20 +0000

[ See post to watch video ]

Justice Department Looking to Punch IBM's Card?

John Paczkowski — Thu, 08 Oct 2009 11:43:53 +0000

It has been nearly eight years since the U.S. Department of Justice agreed to dissolve its 1956 consent decree with IBM, lifting restrictions that had prevented the company from becoming a monopoly in the market for punch card tabulating and later, electronic data processing machines.

But perhaps those restrictions were better left in place. Because on Thursday, the DOJ opened a preliminary investigation into IBM’s business practices, seeking to determine if the company has abused its monopoly position in the mainframe market. The inquiry stems from a complaint filed by the Computer and Communications Industry Association that claims IBM (IBM) has undermined sales of competing mainframe hardware products by refusing to license its mainframe operating system and certain other intellectual property.

“IBM has used its power to resurrect and create a formidable set of barriers in the mainframe market by their misuse of intellectual property,” CCIA CEO Edward J. Black, told the New York Times. “Once IBM walls are taken down by the government enforcing the law, there will be a rush of people looking to get part of this marketplace.”

Perhaps. Certainly that’s not really the case now. As the CCIA and T3 Technologies–which filed an antitrust complaint against IBM in Europe earlier this year for similar reasons–would argue, IBM has essentially left the industry with a single mainframe vendor: itself. And if that sounds like an exaggeration, consider this: A few years back, a company called Platform Solutions attempted to license IBM’s mainframe software. IBM refused and then sued Platform, accusing it of a raft of IP-related violations. Platform countersued. And then, in 2008, IBM acquired the company and promptly shut down its operations.

“For decades, IBM licensed its system software and intellectual property to other computer manufacturers,” T3 president Steven Friedman said earlier this year. “However, for no reason other than to remove all competition from the mainframe market, IBM eliminated programs to allow customers to buy its mainframe software for use on non-IBM mainframe solutions….[Now] only IBM…offers IBM- compatible mainframes and, based on IDC reports, controls over 99% of all existing IBM-compatible mainframes in use today.”

Justice Department Looking to Punch IBM's Card?

John Paczkowski — Thu, 08 Oct 2009 11:43:53 +0000

Good Effort, Moral Pygmies…

John Paczkowski — Tue, 28 Oct 2008 15:09:06 +0000

While technologically and financially you are giants, morally you are pygmies.”

– Rep. Tom Lantos (D., Calif.), chairman of the House Committee on Foreign Affairs, to Yahoo CEO Jerry Yang and General Counsel Michael Callaghan, Nov. 6, 2007

Yahoo’s public shaming before the House Foreign Affairs Committee last November apparently had quite an effect on Internet companies cooperating with Chinese government censorship and demands for information on dissidents. Less than a year after that brutal Capitol Hill humiliation, during which Committee Chairman Tom Lantos (D., Calif.) lambasted Yahoo’s leadership as moral “pygmies,” Yahoo (YHOO), along with Microsoft (MSFT) and Google (GOOG), is introducing a code of conduct that will govern their business practices in repressive countries. The Global Network Initiative, as it’s called, commits the companies to a general support for freedom of expression on the Internet, requiring them to at least try to “avoid or minimize the impact of government restrictions on freedom of expression” and to “narrowly interpret and implement government demands that compromise privacy.”

“The idea is that we believe the guidelines will need to be reviewed, and we will have to revise them as we take into account the actual experience,” said Sharon Hom, executive director of Human Rights in China, which helped draft the initiative. “It envisions an ongoing process of learning and sharing best practices.”

That’s a great step forward for firms like Google, which censors its search results in China, and Yahoo, which handed over emails to the Chinese government that led to the imprisonment of two journalists. But with no bans or sanctions on any specific conduct and most of its key guidelines left entirely up to interpretation, The Global Network Initiative seems more like an effort on the part of the participating companies to avoid legislation on their conduct abroad than anything else–a “We Promise to Be Good if You’ll Just Leave Us Alone” code, if you will. “After two years of effort, they have ended up with so little,” said Morton Sklar, executive director of the World Organization for Human Rights USA. “It is really very little more than a broad statement of support for a general principle without any concrete backup mechanism to ensure that the guidelines will be followed.”