Total Pageviews

Saturday, January 5, 2013

Europe Likely to Be Harder on Google Over Search

Europe Likely to Be Harder on Google Over Search

PARIS - By some accounts, the United States let Google off the hook when it found that the technology giant had not abused its dominance in the Internet search market.

Joaquín Almunia has vowed to restore competition to the Internet search business in Europe.

F.T.C. Hands Google Big Win Close Video See More Videos ' Graphic

Few expect the European antitrust watchdog to be as lenient.

The Federal Trade Commission ruled on Thursday that Google had not broken antitrust laws, after a 19-month inquiry into how it operated its search engine. But the European Commission, which is pursuing claims that the company rigs results to favor its own businesses, operates under a different standard.

The agreement with the American authorities, analysts and competition lawyers say, is unlikely to alter the demands of European regulators, led by the competition commissioner, Joaquín Almunia.

“We have taken note of the F.T.C. decision, but we don't see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing,” said Michael Jennings, a spokesman for the European Commission in Brussels.

Faced with nearly $4 billion in possible penalties and restrictions on its business in Europe, Google submitted proposals in July to remedy the concerns of the European Commission, which covered four areas. In its deal with the F.T.C., Google made concessions in two of those areas but was not required to do so in the rest.

A Google spokesman, Al Verney, declined to comment on the content of the company's proposals to Mr. Almunia but said the company would “continue to work cooperatively with the European Commission.”

The Google case underscores a basic difference between the approaches to monopoly power in Europe and the United States. American antitrust regulators tend to focus on whether a company's dominance harms consumers; the European system seeks to keep competitors in the market. Mr. Almunia has vowed to restore competition to the Internet search business in Europe.

“History shows that competition law is applied to monopoly power more stringently in the E.U. than in the U.S.,” said Jacques Lafitte, head of the competition practice at Avisa Partners, a consultancy in Brussels, who brought one of the original complaints against Google. “Whether the E.U. is right or not is a different question.”

Mr. Lafitte has some expertise in the matter. He is the former head of corporate affairs at Microsoft Europe and watched as that company did battle with regulators over its dominant computer operating system. Microsoft won a lenient settlement with the Justice Department in October 2001, he said, only to be slapped with nearly 1.6 billion euros, or $2.1 billion, in fines and penalties from the European Union from 2004 to 2008.

Google learned from Microsoft's mistakes. It worked with authorities in both the United States and Europe to reach a deal rather than fight a desperate legal action. That approach appears to have paid off: last month, after a meeting with Eric E. Schmidt, Google's executive chairman, Mr. Almunia said that the sides had “substantially reduced our differences.”

In its deal with the F.T.C., Google agreed to make concessions in two areas that concerned European regulators. In one, it will allow rivals to opt out of allowing Google to “scrape,” or copy, text from their sites. Google will probably offer the same concession to European authorities.

But in a second area of European concern - whether Google deliberately favors its own content in search results - the F.T.C. did not require changes.

Mr. Almunia has also demanded that Google put fewer restrictions on advertising distribution deals, an area his American counterparts did not explore.

The company will make a detailed set of proposed remedies in January. The European Commission will then allow the complainants to review them in a period of what is known as “market testing.” Antitrust lawyers say a final denouement could arrive by spring, depending on how hostile Google's rivals are to the proposed remedies.

FairSearch, an alliance of Google rivals, accused the F.T.C. of rushing its decision. It said in a statement that closing the F.T.C. investigation “with only voluntary commitments from Google is disappointing and premature.”

The outcome in Europe may also be affected by Google's dominance there. Google's share of the United States search market was 67 percent in November, according to comScore, a digital analytics company, while its share in Europe was 83 percent that month.

A version of this article appeared in print on January 5, 2013, on page B6 of the New York edition with the headline: Google Is Expected to Face Tougher Antitrust Scrutiny in Europe Than in U.S..

Their Apps Track You. Will Congress Track Them?

Their Apps Track You. Will Congress Track Them?


THERE are three things that matter in consumer data collection: location, location, location.

E-ZPasses clock the routes we drive. Metro passes register the subway stations we enter. A.T.M.'s record where and when we get cash. Not to mention the credit and debit card transactions that map our trajectories in comprehensive detail - the stores, restaurants and gas stations we frequent; the hotels and health clubs we patronize.

Each of these represents a kind of knowing trade, a conscious consumer submission to surveillance for the sake of convenience.

But now legislators, regulators, advocacy groups and marketers are squaring off over newer technology: smartphones and mobile apps that can continuously record and share people's precise movements. At issue is whether consumers are unwittingly acquiescing to pervasive tracking just for the sake of having mobile amenities like calendar, game or weather apps.

For Senator Al Franken, the Minnesota Democrat, the potential hazard is that by compiling location patterns over time, companies could create an intimate portrait of a person's familial and professional associations, political and religious beliefs, even health status. To give consumers some say in the surveillance, Mr. Franken has been working on a locational privacy protection bill that would require entities like app developers to obtain explicit one-time consent from users before recording the locations of their mobile devices. It would prohibit stalking apps - programs that allow one person to track another person's whereabouts surreptitiously.

The bill, approved last month by the Senate Judiciary Committee, would also require mobile services to disclose the names of the advertising networks or other third parties with which they share consumers' locations.

“Someone who has this information doesn't just know where you live,” Mr. Franken said during the Judiciary Committee meeting. “They know the roads you take to work, where you drop your kids off at school, the church you attend and the doctors that you visit.”

Yet many marketers say they need to know consumers' precise locations so they can show relevant mobile ads or coupons at the very moment a person is in or near a store. Informing such users about each and every ad network or analytics company that tracks their locations could hinder that hyperlocal marketing, they say, because it could require a new consent notice to appear every time someone opened an app.

“Consumers would revolt if this was the case, and applications could be rendered useless,” said Senator Charles Grassley, the Iowa Republican, who promulgated industry arguments during the committee meeting. “Worse yet, free applications that rely on advertising could be pushed by the consent requirement to become fee-based.”

Mr. Franken's bill may seem intended simply to protect consumer privacy. But the underlying issue is the future of consumer data property rights - the question of who actually owns the information generated by a person who uses a digital device and whether using that property without explicit authorization constitutes trespassing.

In common law, a property intrusion is known as “trespass to chattels.” The Supreme Court invoked the legal concept last January in United States v. Jones, in which it ruled that the government had violated the Fourth Amendment - which protects people against unreasonable search and seizure - by placing a GPS tracking device on a suspect's car for 28 days without getting a warrant.

Some advocacy groups view location tracking by mobile apps and ad networks as a parallel, warrantless commercial intrusion. To these groups, Mr. Franken's bill suggests that consumers may eventually gain some rights over their own digital footprints.

“People don't think about how they broadcast their locations all the time when they carry their phones. The law is just starting to catch up and think about how to treat this,” says Marcia Hofmann, a senior staff lawyer at the Electronic Frontier Foundation, a digital rights group based in San Francisco. “In an ideal world, users would be able to share the information they want and not share the information they don't want and have more control over how it is used.”

Even some marketers agree.

One is Scout Advertising, a location-based mobile ad service that promises to help advertisers pinpoint the whereabouts of potential customers within 100 meters. The service, previously known as ThinkNear and recently acquired by Telenav, a personalized navigation service, works by determining a person's location; figuring out whether that place is a home or a store, a health club or a sports stadium; analyzing weather and other local conditions; and then showing a mobile ad tailored to the situation.

Eli Portnoy, general manager of Scout Advertising, calls the technique “situational targeting.” He says Crunch, the fitness center chain, used the service to show mobile ads to people within three miles of a Crunch gym on rainy mornings. The ad said: “Seven-day pass. Run on a treadmill, not in the rain.”

When a person clicks on one of these ads, Mr. Portnoy says, a browser-based map pops up with turn-by-turn directions to the nearest location. Through GPS tracking, Scout Advertising can tell when someone starts driving and whether that person arrives at the site.

Despite the tracking, Mr. Portnoy describes his company's mobile ads as protective of privacy because the service works only with sites or apps that obtain consent to use people's locations. Scout Advertising, he adds, does not compile data on individuals' whereabouts over time.

Still, he says, if Congress were to enact Mr. Franken's location privacy bill as written, it “would be a little challenging” for the industry to carry out, because of the number and variety of companies involved in mobile marketing.

“We are in favor of more privacy,” Mr. Portnoy says, “but it has to be done within the nuances of how mobile advertising works so it can scale.”

A SPOKESMAN for Mr. Franken said the senator planned to reintroduce the bill in the new Congress. It is one of several continuing government efforts to develop some baseline consumer data rights.

“New technology may provide increased convenience or security at the expense of privacy and many people may find the trade-off worthwhile,” Justice Samuel Alito wrote last year in his opinion in the Jones case. “On the other hand,” he added, “concern about new intrusions on privacy may spur the enactment of legislation to protect against these intrusions.”

E-mail: slipstream@nytimes.com.

A version of this article appeared in print on January 6, 2013, on page BU3 of the New York edition with the headline: Their Apps Track You. Will Congress Track Them?.

F.T.C. Set Rules of War Over Google Patents

On Google, F.T.C. Set Rules of War Over Patents

The Federal Trade Commission's antitrust investigation of Google focused mainly on the company's lucrative search business, while its inquiry into the tech giant's handling of patents seemed an afterthought.

Yet even as Google made only a few voluntary promises on search, it agreed to a legal settlement on patents that Jon Leibowitz, the commission chairman, called a “landmark enforcement action” that applies to huge high-tech markets like smartphones and tablet computers.

The commission action by no means spells the end of the smartphone patent wars, a global conflict in which major corporations including Apple, Samsung and Google have spent billions amassing patent portfolios and then suing and countersuing one another in courts around the world. But legal experts say Google's settlement with the F.T.C. signals progress in clarifying the rules of engagement in high-tech patent battles, and thus could ease them.

“The agreement represents a significant stride forward in reducing the confusion and uncertainty that currently surrounds how these patents can be used,” said Colleen Chien, a patent expert at the Santa Clara University School of Law.

The commission's settlement with Google, announced on Thursday, focused on patents covering communications and data transmission technologies that are crucial for the basic operation of smartphones and tablets - what are known as standard-essential patents. (There are many other patents in mobile devices, covering physical design and software features.) The legal gamesmanship of the epic smartphone patent battles, according to economists and technology experts, consumes time and investment that could be better used to develop new products. In his comments on Thursday, Mr. Leibowitz pointed to those concerns. “Today's commission action,” he said, “will also relieve companies of some of the costly and inefficient burden of hoarding patents for purely defensive purposes, savings that we hope can be invested in job-creating research and development.”

Under the settlement, Google agreed to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

The issue arose from Google's $12.5 billion purchase of Motorola Mobility, announced in 2011 and completed last year. Google acquired Motorola partly to defend itself and the smartphone makers that use its Android software after rivals had already loaded up on patents.

With the acquisition, Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms. Those commitments were made to technology standards organizations, intended to assure that basic technical innovations are widely available, stimulating growth in the industry.

Over the years, according to Mr. Leibowitz, companies took Motorola at its word and developed products assuming they could routinely license Motorola's patents. But Motorola later refused to license its standard-essential patents and sought court injunctions to stop shipment of rival products.

“After Google purchased Motorola,” Mr. Leibowitz said, “it continued these same abusive practices.”

In recent months, the F.T.C. has issued position papers and filed friend-of-the-court briefs, opposing the motions for injunctions using standard patents. The Justice Department and European regulators have echoed the commission's stance.

“Regulators around the world have become increasingly sensitive to just how important technical standards and standards-setting bodies are to the modern system of economic innovation,” said Josh Lerner, an economist at Harvard Business School.

The threat of court injunctions to stop shipment of products, economists say, is the factor that drives up the cost of patent wars. Because an injunction could be devastating, companies will pay dearly to remove that risk, settling with a plaintiff or spending on patents to build a defensive arsenal.

Some courts have recently resisted granting injunctions based on standard patents. Google's settlement with the F.T.C., said Carl Shapiro, a former chief economist in the Justice Department's antitrust division, “helps solidify the move to stop injunctions in standard-essential patent cases, which is great.”

Dr. Shapiro, a professor at the University of California, Berkeley, said that courts had also been more hesitant recently to grant injunctions in cases that did not involve standard patents. In suits involving smartphones and tablets - amalgams of hardware, software and telecommunications technologies covered by many thousands of patents - judges are sometimes less likely to halt the shipment of a device based on a few infringing patents.

Last month, for example, Lucy Koh, a Federal District Court judge in San Jose, Calif., denied Apple's motion for an injunction against Samsung products. In August, a jury in that court found that Samsung products infringed on a handful of Apple design and software patents, and awarded Apple $1.05 billion in damages.

Judge Koh declined to grant Apple's motion for injunction, essentially saying that Apple's claim was outweighed by the public interest in keeping Samsung shipments flowing. Apple is appealing the ruling.

“The courts seem to be moving toward taking a dimmer view of injunctions generally,” Dr. Shapiro said. “That's a big deal.”

A version of this article appeared in print on January 5, 2013, on page B1 of the New York edition with the headline: On Google, F.T.C. Set Rules of War Over Patents.

Today\'s Scuttlebot: Gambling Software Arrest and Silicon Valley Dress-Up

The technology reporters and editors of The New York Times scour the Web for important and peculiar items. For Friday, selections include Facebook's reply to a subpoena for personal information, an examination of online activism and a programmer in the United States facing criminal charges for licensing software to online casinos in other countries.