Category Archives: Core values

First Impressions of Google AdSense Decision

By Viktorija Morozovaite

The Google AdSense decision has come out on the 20th of March, 2019. With imposition of €1.49 billion fine it marked an end to the third European Commission’s investigation into tech giant’s practices, each resulting in spectacular penalties (together rounding up to €8.2 billion – a sum equivalent to Benelux countries’ annual contribution to the EU budget) and advancing the debate between competition practitioners and academics worldwide. Admittedly, the outcome did not come as a surprise to many – over the past decade, European Commission seem to have become the nemesis of giant tech companies with investigations into practices of Google, Apple, Facebook and Amazon. While the full decision is not published yet and it is difficult to comment on its merits, this blog post aims at distilling some of the ongoing issues, placing the decision in the broader context.

Decision

The investigation concerned online search advertising intermediation market. Through AdSense platform, Google acted as advertising broker, between advertisers and website owners that want to profit from the space around their search results’ pages. Google is also active in online search adverts market. In fact, it is platform’s most profitable core business area (see). According to the Commission, Google was found to be dominant in both of these markets (70% and 75% market shares held in each respectively for over 10 years).

By acting as a gatekeeper to the online search adverts market, as well as competing within the same market, Google inevitably holds a peculiar position and special responsibility precluding it from favouring own services to advance its dominance. In this decision, Art. 102 infringement was found on the basis that Google conducted its online search advertising intermediation services through imposing individually negotiated contractual obligations with the most commercially important publishers. Commissioner Margrethe Vestager stated that this way, ‘Google has cemented its dominance in online search adverts and shielded itself from competitive pressure’ (see). The agreements included the following anti-competitive clauses:

  • Exclusivity provision (since 2006) – most commercially important partners were prevented from ‘placing any search adverts from competitors on their search results pages’.
  • Premium placement (since 2009, designed to gradually replace exclusivity provisions) – direct partners were required to take on a minimum number of ads from Google and display it on the most profitable ad space.
  • Written approval was required from Google before publishers would make changes in the way in which competitors’ ads were displayed (since 2009).

Type of abuse

It is clear that in Google AdSense, Commission focused on exclusionary nature of the abuses, aimed to foreclose competitors and arguably protect its market position in the core (in this case, online search advertising) business area. While the conduct generally seems to neatly fit within the ‘exclusive dealing’ category (see para 32, Communication), it is not unlikely that the full decision would incorporate the echoes of ‘essential facility’ reasoning, due to the structurally important Google’s position in the platform ecosystem (in this case, through intermediating online search advertising services).

Theory of harm

When establishing the theory of harm, the Commission seems to have focused on impeded consumer choice, as a result of Google’s restrictive agreements with key commercial partners. According to the decision, by, in effect, excluding rivals in online search advertising market, Google not only deterred competition but also stifled innovation which resulted in less choice of alternative types of ads. It is plausible to see consumer choice being treated as a value that ought to be protected in digital markets, especially those dominated by giant techs. In fact, in multi-sided markets context, a shift from price to other parameters of competition (choice, innovation, quality) becomes necessary. For instance, in Google AdSense, consumers are operating in the zero-price side of the market, where they apparently pay no monetary price for the service (on zero-price markets, see). Thus, developing a theory of harm becomes a more nuanced exercise than finding an increase in price. However, in this particular case it will be interesting to see how the decision deals with establishing and measuring the alleged consumer harm. Questions arise whether there is more utility for consumers in having a greater variety of ads i.e. is more choice always pro-consumer? Would rivals’ ads result in more or less qualitative service? These questions, of course, although important are not novel and have been pertinent in Google decisions saga.

Remedies

Regarding online search advertising intermediation market, Google was ordered to ‘at a minimum, stop its illegal conduct, to the extent it has not already done so, and to refrain from any measure that has the same or equivalent object or effect’ (see). It is noteworthy that Google has stopped its illegal practices a few months after the issued Statement of Objections in July 2016. Therefore, it seems that the Commission did not have to decide upon ordering potential effective remedies. While in this particular case it may seem unproblematic, this has been a point of critique in the previous Google decisions, considering that lack of clear steps do not comply with the principle of legal certainty (Akman 2017).

During the questions time, when asked to elaborate on the fact that there have not been effective remedies put in place and ‘cease and desist’ order may not result in restoring competition, Commissioner Vestager reinstated that while this is one of the things highly featuring in the decision-making process, in fast-moving markets, even with a speedy Commission’s reaction ‘the risk is that the market would have moved on and it is very difficult to restore competition as it were’ (see).  

Even though is it appreciated that each case should be assessed individually and that it is difficult to predict development of the fast-moving digital markets, moving forward it may be desired to incorporate clearer steps as to how platforms as Google may reach compliance with European competition law. Nevertheless, this involves further research in the nature and characteristics of the digital markets as well as more clearly defined competition law enforcement strategies (for recent reports, see this and this).

Bringing it all together

To understand the outcome of Google AdSensedecision it is important to put it in the broader context. The so-called ‘Google saga’ began in 2010, with European Commission opening a probe into Google’s search and comparison-shopping services. In 2015, the official proceedings were opened in relation to Google’s Android operating system, followed by an inquiry into search advertising intermediation market just a year later. In addition to heavy fines, Google Shopping and Google Android decisions resulted in an outright divide of competition law circles, criticizing or praising the difficult (policy) choices made by the Commission each time (to name a few, see: Akman 2018, 2017; Picker 2018Hoppner et al 2018). However, Google AdSense does not seem to have ‘stirred up the waters.’ While the decision was not unpredictable per se, the Commission’s reasoning (or its themes) could be expected to overlap with the previous Google decisions, thus having a crystallizing effect in regard to emerging competition law enforcement trends.

For instance, the decisions dealt with markets where Google, on the one hand, was a provider of a certain service and, on the other, an intermediary providing access point to that very same market. Indeed, a significant body of research recognises a central role that giant techs play in the platform ecosystem (to name a few, see: Van Dijck et al 2018Gillespie 2018Petit 2016). Without appropriate balance being struck between competition law and regulation, competition enforcement may appear to be the only means of curbing platform’ power. Arguably, that balance is not present yet. While economic, social and even political influence (and ramifications) of the Big Tech is undeniable, the question that competition practitioners and academics have grappled with for over a decade now is whether competition law is the right means to curb this power? And, if so, is it suitable to address the challenges posed by digitalisation? 

All in all, in Google AdSense, Commission delivered a clearly identifiable exclusionary abuse, established a theory of harm that could still be subject to debate as well as omitted the question of effective remedies. The decision itself was in many ways predictable and fits well within the rest of ‘Google saga’. One is left to eagerly await the full details of the reasoning regarding this outcome.

EU-Japan Economic Partnership Agreement: Data Protection in the Era of Digital Trade and Economy

By Machiko Kanetake and Sybe de Vries

© European Union, 2017

On 12 December 2018, the European Parliament approved the EU-Japan Economic Partnership Agreement (EPA) which the parties have been negotiating since April 2013. The Agreement, sometimes called as the “cars-for-cheese” deal in a symbolic sense, aims to vitalize economies which represent approximately 30% of global gross domestic product. The Commission presented the final text to the Council on 18 April 2018, which authorized, on 6 July, the signing of the deal. The parties have signed the agreement on 17 July, and, on 8 December 2018, the National Diet of Japan approved the agreement. In light of the Court of Justice’s Opinion 2/15 on the EU-Singapore Free Trade Agreement, the Commission assumes that the EU-Japan EPA does not require ratification by individual EU member states since the agreement is within the EU’s exclusive competence. Investment protection standards and investment protection dispute resolution, which fall under shared competences, have been subject to separate negotiations. The EPA, which is expected to enter into force on 1 February 2019, is arguably the biggest trade-related achievement of the current Commission, which ends its mandate in 2019.

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Robot Love / Robotgov

By Stijn van Deursen and Stefan Kulk

Robots are on the rise. They make life easier, they make economic processes more efficient, and they are even becoming objects of love and lust. At the same time, new ethical and legal questions arise. Should robots have rights? Can we send them to war? And, who is responsible for any ‘mistakes’ that robots make? They also make us question ourselves, and may teach us something about humanity. We can all agree that robots are not human. But what distinguishes us from ‘them’?

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Legal Status of Robots: The RENFORCE/UGlobe Seminar and Why I Decided to Sign the Open Letter

Photo credits: iStock/Global_PhonlamaiPhoto

Should a robot enjoy any legal status independent of its human creators? If so, what kind of legal status would that be? Should the robot enjoy its/her/his “rights”? One’s answers to these futuristic questions might in part depend on whether one’s image of autonomous robots comes from the film Bicentennial Man (1999) based on Isaac Asimov’s novel or a more recent movie Ex Machina (2014). In the film version of Bicentennial Man, a highly autonomous robot played by Robin Williams exhibits humorous, friendly, and warm-hearted characteristics that co-exist with human communities. By contrast, in Ex Machina, a beautiful human-looking robot ended up deceiving a man and achieving freedom by taking advantage of the trust that the man developed towards the robot. While we cannot tell if such a self-governing robotic machine could ever be built, these two movies depict diametrically opposed scenarios that robots can have both beneficial and disturbing consequences to human beings. Continue reading

Cambridge Analytica and Facebook Fallout: The Renforce/UGlobe Seminar

On 11 April 2018, Facebook founder and CEO Mark Zuckerberg appeared at the US congressional hearings. At the heart of the testimony was the Cambridge Analytica fallout on the misuse of Facebook users’ data, which continues to reveal the vulnerabilities of social media companies and their impact on politics. The business model of social media companies is based on the sale of advertisements and the provision of apps which allow the social media platforms to make the most of users’ data. Their businesses’ unique strength resides in the “targeted advertising” of potential consumers — and voters. While Facebook and other similar social media generate an enormous benefit of sharing information, the companies’ reliance on users’ data triggers an unprecedented risk of information misuse, not only in a commercial sense, but also for political campaigns.

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Disrupting Technologies – A UGlobe Dialogue on Bulk Interception of Communications

Photo credits: iStock/Global_PhonlamaiPhoto

The UGlobe Dialogue Series “Disrupting Technologies?” hosted its first event on 15 March 2018, in the week before the Referendum on a new Dutch Law on the Intelligence and Security  Services (the Wet op de inlichtingen- en veiligheidsdiensten, Wiv). This new law would extend the possibilities of secret services to monitor online behavior. Technology has changed since the usage of fixed telephony and dialup internet-access in the 1990s to the widespread use of smartphones, 4G and Wi-Fi-hotspots in 2018.  So changes in the law regulating the intelligence services are necessary, and in view of the upcoming referendum it is necessary to engage in a debate on the new competences regarding these new technologies and the framework of supervision of these intelligence and security services. Continue reading

Call for Papers

The Utrecht Journal of International and European Law (UJIEL), is issuing a Call for Papers to be published in its forthcoming Special Issue on European Law (February 2018). The Board of Editors invites proposals from research institutes and projects who wish to showcase the work of their researchers in an Open Access Special Issue. Institutes and projects seeking collaboration are invited to email us at utrechtjournal@urios.org.

For further information please consult our website:www.utrechtjournal.org

Deadline for Submissions: 25 August 2017

The Utrecht Journal of International and European Law is an Open Access, peer-reviewed, biannual law journal of Urios, the Utrecht Association for International and European Law. It was founded in 1981 in Utrecht, The Netherlands. Our latest special issue was prepared in co-operation with The Public International Law & Policy Group (PILPG), a global pro bono law firm and Nobel Peace Prize nominee (http://www.utrechtjournal.org/15/volume/33/issue/84/).

Dutch DPA shares new data about the Right to be Forgotten

Three years ago, the European Court of Justice gave judgment in the Google Spain-case, which established the so-called ‘right to be forgotten.’ This right enables individuals to require from search engines that they remove irrelevant search results for searches on their name. Continue reading

Circumventing the EU’s Export Control on Cyber Surveillance

Data Security Breach

On 10 April, Al Jazeera revealed how “surprisingly simple” it can be to circumvent sanctions and export control on cyber surveillance technologies. Al Jazeera’s four-month undercover investigation exposed the practices of merchants who sell spyware technologies as a “wi-fi router” and thereby readily escape from authorities’ export control radar. The investigation brought to light, for instance, an Italian communications company’s readiness to execute a 20-million euro deal to export to Iran an IP-intercept system which could be used for spying citizens. The company may be able to evade the EU’s export control by labelling the intercept Continue reading

EU citizenship: a slipping anchor to hold on to rights? Brexit and the consequences for EU citizens with British nationality

This summer many European citizens woke up in shock. Whilst reading the newspaper, listening to the radio, scrolling on Facebook, having breakfast, we learnt that a small majority of the voters in the Brexit referendum voted to leave the European Union. Not only does the (potential) Brexit have consequences for the internal market and the economic and social rights of EU citizens, but it also threatens their status as such. This is shocking for EU citizens with the nationality of another Member State residing in the United Kingdom, because their status will be redefined. For instance, in the future they will no longer be able to rely on equal treatment based on EU citizenship in the United Kingdom. Possibly even more shocked were British nationals, who might now actually lose their status as EU citizens, either living in the United Kingdom or elsewhere in the European Union. This will significantly impact their possibilities to work, study, and take up residence in another EU Member State. Continue reading