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Justice Dept. files landmark antitrust case against Google

Inside Telecom Staff

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Justice Dept. files landmark antitrust case against Google

WASHINGTON (AP) — The Justice Department on Tuesday sued Google for abusing its dominance in online search and advertising — the government’s most significant attempt to protect competition since its groundbreaking case against Microsoft more than 20 years ago.

And it could just be an opening salvo. Other major tech companies including Apple, Amazon and Facebook are under investigation at both the Justice Department and the Federal Trade Commission.

“Google is the gateway to the internet and a search advertising behemoth,” U.S. Deputy Attorney General Jeff Rosen told reporters. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.”

Lawmakers and consumer advocates have long accused Google of abusing its dominance in online search and advertising. The case filed in federal court in Washington, D.C., alleges that Google uses billions of dollars collected from advertisers to pay phone manufacturers to ensure Google is the default search engine on browsers. That stifles competition and innovation from smaller upstart rivals to Google and harms consumers by reducing the quality of search and limiting privacy protections and alternative search options, the government alleges.

Critics contend that multibillion-dollar fines and mandated changes in Google’s practices imposed by European regulators in recent years weren’t severe enough and Google needs to be broken up to change its conduct. The Justice Department didn’t lay out specific remedies along those lines, although it asked the court to order structural relief “as needed to remedy any anticompetitive harm.”

That opens the door to possible fundamental changes such as a spinoff of the company’s Chrome browser.

Google vowed to defend itself and responded immediately via tweet: “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.”

Eleven states, all with Republican attorneys general, joined the federal government in the lawsuit. But several other states demurred.

The attorneys general of New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee and Utah released a statement Monday saying they have not concluded their investigation into Google and would want to consolidate their case with the DOJ’s if they decided to file. “It’s a bipartisan statement,” said spokesman Fabien Levy of the New York State attorney general’s office. “There’s things that still need to be fleshed out, basically”

President Donald Trump’s administration has long had Google in its sights. One of Trump’s top economic advisers said two years ago that the White House was considering whether Google searches should be subject to government regulation. Trump has often criticized Google, recycling unfounded claims by conservatives that the search giant is biased against conservatives and suppresses their viewpoints.

Rosen told reporters that allegations of anti-conservative bias are “a totally separate set of concerns” from the issue of competition.

Sally Hubbard, an antitrust expert who runs enforcement strategy at the Open Markets Institute, said it was a welcome surprise to see the Justice Department’s openness to the possibility of structurally breaking up Google, and not just imposing conditions on its behavior as has happened in Europe.

“Traditionally, Republicans are hesitant to speak of breakups,” she said. “Personally, I’ll be very disappointed if I see a settlement. Google has shown it won’t adhere to any behavioral conditions.”

The argument for reining in Google has gathered force as the company stretched far beyond its 1998 roots as a search engine governed by the motto “Don’t Be Evil.” It’s since grown into a diversified goliath with online tentacles that scoop up personal data from billions of people via services ranging from search, video and maps to smartphone software. That data helps feed the advertising machine that has turned Google into a behemoth.

The company owns the leading web browser in Chrome, the world’s largest smartphone operating system in Android, the top video site in YouTube and the most popular digital mapping system. Some critics have singled out YouTube and Android as among Google businesses that should be considered for divestiture.

Google, whose corporate parent Alphabet Inc. has a market value just over $1 trillion, controls about 90% of global web searches. Barring a settlement, a trial would likely begin late next year or in 2022.

The company, based in Mountain View, California, argues that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face ample competition and have unleashed innovations that help people manage their lives.

Most of Google’s services are offered for free in exchange for personal information that helps it sell its ads.

In a Tuesday presentation with a handful of reporters, Google argued that its services have helped hold down the prices of smartphones and that consumers can easily switch away from services like Google Search even if it’s the default option on smartphones and in some internet browsers.

A recent report from a House Judiciary subcommittee concluded that Google has monopoly power in the market for search. It said the company established its position in several markets through acquisition, snapping up successful technologies that other businesses had developed — buying an estimated 260 companies in 20 years.

The Democratic congressman who led that investigation called Tuesday’s action “long overdue.”

“It is critical that the Justice Department’s lawsuit focuses on Google’s monopolization of search and search advertising, while also targeting the anticompetitive business practices Google is using to leverage this monopoly into other areas, such as maps, browsers, video, and voice assistants,” Rep. David Cicilline of Rhode Island said in a statement.

Columbia Law professor Tim Wu called the suit almost a carbon copy of the government’s 1998 lawsuit against Microsoft. He said via email that the U.S. government has a decent chance of winning. “However, the likely remedies — i.e., knock it off, no more making Google the default — are not particularly likely to transform the broader tech ecosystem.”

Other advocates, however, said the Justice Department’s timing — it’s only two weeks to Election Day — smacked of politics. The government’s “narrow focus and alienation of the bipartisan state attorneys general is evidence of an unserious approach driven by politics and is likely to result in nothing more than a choreographed slap on the wrist for Google,” Alex Harman, a competition policy advocate at Public Citizen, said in a statement.

Republicans and Democrats have accelerated their criticism of Big Tech in recent months, although sometimes for different reasons. It’s unclear what the status of the government’s suit against Google would be if a Joe Biden administration were to take over next year.

The Justice Department sought support for its suit from states across the country that share concerns about Google’s conduct. A bipartisan coalition of 50 U.S. states and territories, led by Texas Attorney General Ken Paxton, announced a year ago they were investigating Google’s business practices, citing “potential monopolistic behavior.”

Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas joined the Justice Department lawsuit.


By MICHAEL BALSAMO and MARCY GORDON Associated Press, AP Technology Writers Michael Liedtke in San Ramon, Calif., Matt O’Brien in Providence, R.I., and Frank Bajak in Boston contributed to this report.

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UK to launch new watchdog next year to police tech giants

Inside Telecom Staff

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UK to launch new watchdog next year to police tech giants

By KELVIN CHAN AP Business Writer

LONDON (AP) — Britain plans to create a new watchdog to police big tech companies including Google and Facebook to counter their market dominance and prevent them from exploiting consumers and small businesses.

The U.K. government said Friday that it’s setting up a “Digital Markets Unit” next year to enforce a new code of conduct governing the behavior of tech giants that dominate the online advertising market.

The Digital Markets Unit, scheduled to launch in April, will oversee a new regulatory regime for tech companies that’s aimed at spurring more competition.

The measures were foreshadowed in findings by former Obama economic adviser Jason Furman, who was commissioned by the U.K. Treasury to carry out a review of the digital economy.

It’s part of a wider push by governments in the U.S. and Europe to constrain the power of big tech companies amid concern about their outsize influence. The European Union this week unveiled proposals to wrest control of data from tech companies and is set to release details next month of a sweeping overhaul of digital regulations aimed at preventing online gatekeepers from stifling competition. In the U.S., authorities are pursuing an antitrust case against Google and lawmakers have proposed breaking up big tech companies.

U.K. Digital Secretary Oliver Dowden said online platforms bring benefits to society, “but there is growing consensus in the U.K. and abroad that the concentration of power among a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and businesses that rely on them.”

The government still needs to consult on how the digital markets unit will operate and approve legislation for it.

Under the new code, tech companies would have to be more transparent about how they use consumers’ data. They would have to let users choose whether to receive personalised advertising, and wouldn’t be allowed to make it harder for customers to use rival platforms.

The Digital Markets Unit could be given the power to suspend, block or reverse any decisions made by big tech companies, and order them to take certain actions to comply with the code. If companies don’t comply, the watchdog could fine them, though the maximum penalty hasn’t yet been spelled out.

Google said online tools competition in the ad tech industry has been increasing and noted it gives users tools to manage and control their data.

“We support an approach that benefits people, businesses and society and we look forward to working constructively with the Digital Markets Unit so that everyone can make the most of the internet,” said Ronan Harris, the company’s vice president for U.K. and Ireland.

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AstraZeneca manufacturing error clouds vaccine study results

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AstraZeneca and Oxford University on Wednesday acknowledged a manufacturing error that is raising questions about preliminary results of their experimental COVID-19 vaccine.

A statement describing the error came days after the company and the university described the shots as “highly effective” and made no mention of why some study participants didn’t receive as much vaccine in the first of two shots as expected.

In a surprise, the group of volunteers that got a lower dose seemed to be much better protected than the volunteers who got two full doses. In the low-dose group, AstraZeneca said, the vaccine appeared to be 90% effective. In the group that got two full doses, the vaccine appeared to be 62% effective. Combined, the drugmakers said the vaccine appeared to be 70% effective. But the way in which the results were arrived at and reported by the companies has led to pointed questions from experts.

The partial results announced Monday are from large ongoing studies in the U.K. and Brazil designed to determine the optimal dose of vaccine, as well as examine safety and effectiveness. Multiple combinations and doses were tried in the volunteers. They were compared to others who were given a meningitis vaccine or a saline shot.

Did Researchers Mean to Give a Half Dose?

Before they begin their research, scientists spell out all the steps they are taking, and how they will analyze the results. Any deviation from that protocol can put the results in question.

In a statement Wednesday, Oxford University said some of the vials used in the trial didn’t have the right concentration of vaccine so some volunteers got a half dose. The university said that it discussed the problem with regulators, and agreed to complete the late stage trial with two groups. The manufacturing problem has been corrected, according to the statement.

What About the Results Themselves?

Experts say the relatively small number of people in the low dose group makes it difficult to know if the effectiveness seen in the group is real or a statistical quirk. Some 2,741 people received a half dose of the vaccine followed by a full dose, AstraZeneca said. A total of 8,895 people received two full doses.

Another factor: none of the people in the low-dose group were over 55 years old. Younger people tend to mount a stronger immune response than older people, so it could be that the youth of the participants in the low-dose group is why it looked more effective, not the size of the dose.

Another point of confusion comes from a decision to pool results from two groups of participants who received different dosing levels to reach an average 70% effectiveness, said David Salisbury, and associate fellow of the global health program at the Chatham House think tank.

“You’ve taken two studies for which different doses were used and come up with a composite that doesn’t represent either of the doses,” he said of the figure. “I think many people are having trouble with that.”

Why Would a Smaller First Dose Be More Effective?

Oxford researchers say they aren’t certain and they are working to uncover the reason.

Sarah Gilbert, one of the Oxford scientists leading the research, said the answer is probably related to providing exactly the right amount of vaccine to trigger the best immune response.

“It’s the Goldilocks amount that you want, I think, not too little and not too much. Too much could give you a poor quality response as well,” she said. “So you want just the right amount and it’s a bit hit and miss when you’re trying to go quickly to get that perfect first time.”

What Are the Next Steps?

Details of the trial results will be published in medical journals and provided to U.K. regulators so they can decide whether to authorize distribution of the vaccine. Those reports will include a detailed breakdown that includes demographic and other information about who got sick in each group, and give a more complete picture of how effective the vaccine is.

Moncef Slaoui, who leads the U.S. coronavirus vaccine program Operation Warp Speed, said Tuesday in a call with reporters that U.S. officials are trying to determine what immune response the vaccine produced, and may decide to modify the AstraZeneca study in the U.S. to include a half dose.

“But we want it to be based on data and science,” he said.

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EU plans new rules giving Europeans more control of data

Inside Telecom Staff

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The European Union is laying out new standards for data giving Europeans more control over their personal information as it seeks to counter the power of U.S. and Chinese tech companies.

The EU’s executive Commission on Wednesday proposed new rules on the handling of data that would aim to give people, businesses and government bodies the confidence to share their information in a European data market.

The proposed legislation would would spell out how industrial and government data – normally off limits because of intellectual property rights, commercial confidentiality or privacy rights – could be shared to help society or boost the economy. The bloc’s strict privacy rules would still apply, with mechanisms in place to preserve confidentiality or anonymity.

The aim is to drive innovation in areas such as health care or climate change by allowing data to be more easily shared with companies or researchers.

Individuals could choose to donate their data for altruistic reasons – for example, a person with a rare disease providing their health information to medical researchers. Or people could allow access for a fee or use of a service. The new rules could pose a challenge to big tech companies like Google and Facebook that currently make billions in revenue by using data to sell ads and other services.

The proposal, known as the Digital Governance Act, calls for raising trust in data sharing by setting up a new system involving neutral and trustworthy middlemen who act as brokers of pools of data.

Europeans would be able to get more control of their data through “personal data spaces” that have tools and services that let them decide who can access their data and for what purpose.

“The framework offers an alternative model to the current data handling practices offered by big tech platforms,” the EU’s Executive Vice President Margrethe Vestager said at a press briefing in Brussels.

Thierry Breton, the EU’s internal market commissioner, said the regulations would help Europe become the world’s No. 1 “data continent.”

“With the ever-growing role of industrial data in our economy, Europe needs an open yet sovereign Single Market for data,” he said.

LONDON (AP) — By KELVIN CHAN Associated Press.

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