Is Alphabet-Google 'too big to jail'? The Lords find out

Or is it just a Microsoft lobbying campaign?


Europe's examination of Big Tech's dominant platforms – like Alphabet-Google and Amazon – is only just beginning, but Parliament got a teaser of the battles ahead this week, as two antitrust professors sharply disagreed on the merits of the enquiry.

Professors David Evans, of UCL, and Ariel Ezrachi, of Oxford University, at least agreed on one thing: that regulating competition in today's online market place was tricky.

Authorities are aware of the dangers of getting it wrong," Ezrachi said, "so not to send a signal that would chill competition".

The two academics had been invited to give evidence before the House of Lords' EU Internal Market Sub Committee.

Evans thought the market place was so vigorous and the platforms' hold over users so weak, that it was all a fuss about nothing. Why regulate, he said, when "everything changes every couple of years?" He blamed it all on Microsoft for "lobbying".

Ezrachi gave five reasons that there may be cause for concern – and these highlighted key differences in Europe's approach to competition compared to the approach in the United States. Europe was more aggressive with monopolists and tended to intervene when the processes of competition were threatened, while US authorities didn't, he explained. With the platforms, "data driven network effects" were a potential factor in harming competition.

"Economics of scale make you much stronger, much quicker… which erects barriers to newcomers. It doesn't mean the market is not dynamic," he said. What he called "superplatforms" have so much data from big analytics, they get a unique and real-time view of the market.

Today's platforms like Amazon can engage in targeted tracking, resulting in almost perfect price discrimination, Ezrachi explained. That raises a potential transfer of welfare from the pockets of consumers to platform operators. And Ezrach also wondered if the market dominated by the big plantations was actually as dynamic as all that. "Behind the veil" there is slightly less competition.

The two disagreed politely about whether punters can switch from one platform to another.

"The empirical evidence suggest that most users, if search results are not what they expect, will not try to change," Ezrachi told the Committee. “The switching costs [to another search engine ]… are perceived to be much higher.”

He noted that Google clearly values being the default – paying around $1bn to Apple to be the default in iOS last year, according to Morgan Stanley.

Google had twice paid fines and people carried on using Google. "We're not sophisticated consumers," the professor noted.

The trickiest issue for regulators could be quality. Consumers like to get free stuff, and it's hard for consumers to know those free services could actually be a lot better.

Evans didn't have much time for the complaints.

"If you benefit one group of stakeholders make sure the benefits outweigh the penalties suffered by consumers or small business," he said. A line we can expect to hear from Alphabet (Google) over the next few months and years.

Federal regulators' lack of interest in pursuing Google, despite its dominant position and complaints about market abuse, was the subject of a congressional probe this year. Politically appointed FTC commissioners declined to take action, against their staff's advice.

"It is way beyond coincidence that several former employees of, or consultants to, Google, are positioned in most every major federal policy or law enforcement area of commercial interest to Google Inc," notes critic Scott Cleland, in a post entitled "Does US antitrust law apply to Google?"

State attorneys continue to probe Google's conduct, but with federal regulators reluctant to worry the Chocolate Factory, the Digital Citizens' Alliance group wonders if Google is "too big to jail".

Europe's probe into platforms will hinge on whether it can make a convincing case for quality suffering, and whether the data dominance of Amazon and Google means they own so much of the market as to exclude competitors we can't even imagine yet. ®


Other stories you might like

  • Demand for PC and smartphone chips drops 'like a rock' says CEO of China’s top chipmaker
    Markets outside China are doing better, but at home vendors have huge component stockpiles

    Demand for chips needed to make smartphones and PCs has dropped "like a rock" – but mostly in China, according to Zhao Haijun, the CEO of China's largest chipmaker Semiconductor Manufacturing International Corporation (SMIC).

    Speaking on the company's Q1 2022 earnings call last Friday, Zhao said smartphone makers currently have five months inventory to hand, so are working through that stockpile before ordering new product. Sales of PCs, consumer electronics and appliances are also in trouble, the CEO said, leaving some markets oversupplied with product for now. But unmet demand remains for silicon used for Wi-Fi 6, power conversion, green energy products, and analog-to-digital conversion.

    Zhao partly attributed sales slumps to the Ukraine war which has made the Russian market off limits to many vendors and effectively taken Ukraine's 44 million citizens out of the global market for non-essential purchases.

    Continue reading
  • Colocation consolidation: Analysts look at what's driving the feeding frenzy
    Sometimes a half-sized shipping container at the base of a cell tower is all you need

    Analysis Colocation facilities aren't just a place to drop a couple of servers anymore. Many are quickly becoming full-fledged infrastructure-as-a-service providers as they embrace new consumption-based models and place a stronger emphasis on networking and edge connectivity.

    But supporting the growing menagerie of value-added services takes a substantial footprint and an even larger customer base, a dynamic that's driven a wave of consolidation throughout the industry, analysts from Forrester Research and Gartner told The Register.

    "You can only provide those value-added services if you're big enough," Forrester research director Glenn O'Donnell said.

    Continue reading
  • D-Wave deploys first US-based Advantage quantum system
    For those that want to keep their data in the homeland

    Quantum computing outfit D-Wave Systems has announced availability of an Advantage quantum computer accessible via the cloud but physically located in the US, a key move for selling quantum services to American customers.

    D-Wave reported that the newly deployed system is the first of its Advantage line of quantum computers available via its Leap quantum cloud service that is physically located in the US, rather than operating out of D-Wave’s facilities in British Columbia.

    The new system is based at the University of Southern California, as part of the USC-Lockheed Martin Quantum Computing Center hosted at USC’s Information Sciences Institute, a factor that may encourage US organizations interested in evaluating quantum computing that are likely to want the assurance of accessing facilities based in the same country.

    Continue reading
  • Bosses using AI to hire candidates risk discriminating against disabled applicants
    US publishes technical guide to help organizations avoid violating Americans with Disabilities Act

    The Biden administration and Department of Justice have warned employers using AI software for recruitment purposes to take extra steps to support disabled job applicants or they risk violating the Americans with Disabilities Act (ADA).

    Under the ADA, employers must provide adequate accommodations to all qualified disabled job seekers so they can fairly take part in the application process. But the increasing rollout of machine learning algorithms by companies in their hiring processes opens new possibilities that can disadvantage candidates with disabilities. 

    The Equal Employment Opportunity Commission (EEOC) and the DoJ published a new document this week, providing technical guidance to ensure companies don't violate ADA when using AI technology for recruitment purposes.

    Continue reading
  • How ICE became a $2.8b domestic surveillance agency
    Your US tax dollars at work

    The US Immigration and Customs Enforcement (ICE) agency has spent about $2.8 billion over the past 14 years on a massive surveillance "dragnet" that uses big data and facial-recognition technology to secretly spy on most Americans, according to a report from Georgetown Law's Center on Privacy and Technology.

    The research took two years and included "hundreds" of Freedom of Information Act requests, along with reviews of ICE's contracting and procurement records. It details how ICE surveillance spending jumped from about $71 million annually in 2008 to about $388 million per year as of 2021. The network it has purchased with this $2.8 billion means that "ICE now operates as a domestic surveillance agency" and its methods cross "legal and ethical lines," the report concludes.

    ICE did not respond to The Register's request for comment.

    Continue reading
  • Fully automated AI networks less than 5 years away, reckons Juniper CEO
    You robot kids, get off my LAN

    AI will completely automate the network within five years, Juniper CEO Rami Rahim boasted during the company’s Global Summit this week.

    “I truly believe that just as there is this need today for a self-driving automobile, the future is around a self-driving network where humans literally have to do nothing,” he said. “It's probably weird for people to hear the CEO of a networking company say that… but that's exactly what we should be wishing for.”

    Rahim believes AI-driven automation is the latest phase in computer networking’s evolution, which began with the rise of TCP/IP and the internet, was accelerated by faster and more efficient silicon, and then made manageable by advances in software.

    Continue reading
  • Pictured: Sagittarius A*, the supermassive black hole at the center of the Milky Way
    We speak to scientists involved in historic first snap – and no, this isn't the M87*

    Astronomers have captured a clear image of the gigantic supermassive black hole at the center of our galaxy for the first time.

    Sagittarius A*, or Sgr A* for short, is 27,000 light-years from Earth. Scientists knew for a while there was a mysterious object in the constellation of Sagittarius emitting strong radio waves, though it wasn't really discovered until the 1970s. Although astronomers managed to characterize some of the object's properties, experts weren't quite sure what exactly they were looking at.

    Years later, in 2020, the Nobel Prize in physics was awarded to a pair of scientists, who mathematically proved the object must be a supermassive black hole. Now, their work has been experimentally verified in the form of the first-ever snap of Sgr A*, captured by more than 300 researchers working across 80 institutions in the Event Horizon Telescope Collaboration. 

    Continue reading
  • Shopping for malware: $260 gets you a password stealer. $90 for a crypto-miner...
    We take a look at low, low subscription prices – not that we want to give anyone any ideas

    A Tor-hidden website dubbed the Eternity Project is offering a toolkit of malware, including ransomware, worms, and – coming soon – distributed denial-of-service programs, at low prices.

    According to researchers at cyber-intelligence outfit Cyble, the Eternity site's operators also have a channel on Telegram, where they provide videos detailing features and functions of the Windows malware. Once bought, it's up to the buyer how victims' computers are infected; we'll leave that to your imagination.

    The Telegram channel has about 500 subscribers, Team Cyble documented this week. Once someone decides to purchase of one or more of Eternity's malware components, they have the option to customize the final binary executable for whatever crimes they want to commit.

    Continue reading

Biting the hand that feeds IT © 1998–2022