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The Policy and Commentary Blog of The Heartland Institute
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Why Google Can’t Criticize EU Much for Ruling it Dominant & Anticompetitive

February 08, 2016, 10:02 AM

In the next several weeks, expect the EC’s Competition Directorate to decide that Google is in fact dominant with >90% share of Internet search in Europe and that Google has abused its search dominance by biasing its own Shopping service over competitors. It also could formally charge Google for abuse of its search dominance in contractually tying Google Search and other search-driven apps like Maps, YouTube, etc. to Android to extend its search dominance to mobile search and to the operating system market where Android now owns >80% share.

In taking a most extreme and ultimately indefensible legal and PR position, that the EU antitrust case is “wrong as a matter of fact, law and economics,” Google has painted itself into a corner, PR-wise and politically, much more than many appreciate. Why?

First, the U.S. DOJ has already officially found Google dominant in search/search-advertising — twice.

It will be very hard for Google to credibly argue that its >90% share of Internet search is not dominance when the EU legal threshold for dominance is just ~40%.

It will also be hard for Google to get the USG to publicly pound the table on their behalf, because it is public knowledge that both the Bush DOJ and the Obama DOJ both officially found Google dominant after in-depth investigations.

The Bush DOJ determined in 2008: “The Department’s investigation revealed that Internet search advertising and Internet search syndication are each relevant antitrust markets and that Google is by far the largest provider of such services, with shares of more than 70 percent in both markets.” The Obama DOJ determined in 2010: “…Google, the firm that now dominates these markets … [“Internet search and paid search advertising”].”

Second, on a factual level, the FTC’s staff report on Google antitrust showed that both the FTC staff investigators, and even Google, viewed Google as dominant.

We learned from the inadvertent release of the FTC staff report that recommended an antitrust case against Google, that FTC investigators concluded that: “Google is clearly the dominant provider of ‘general’ search services in the U.S.” (p. 68).

The FTC also discovered an admission by Google’s Chief Economist, Hal Varian, who stated: “We’re the dominant incumbent in the industry” (footnote 547). In addition, the FTC uncovered email evidence Larry Page personally supported the search bias self-dealing that Google now denies: “Larry [Page] thought product [Google’s shopping service] should get more exposure” (footnote 120).

Third, Google can’t claim to be innocent victim of EU antitrust charges when it is obviously a rare serial antitrust recidivist.   

In 2008, Google dropped its proposed Google-Yahoo Ad Agreement because the DOJ threatened a Section 1 & 2 monopolization case for trying to extend its >70% dominance of Internet search advertising and search syndication to a >90% share via the collusive proposal with Yahoo.

In 2009, the DOJ opposed the proposed Google Book Settlement as anticompetitive, and in 2011, a U.S. Court agreed and rejected the settlement as anti-competitive — a legal position by the way, that was officially supported by Germany and France in their opposition filings.

In 2010, the DOJ and Court prohibited Google and six other companies from continuing to engage is anticompetitive employee solicitation agreements.

In 2013, both the FTC and the EU settled with Google to prohibit it from continuing to anti-competitively abuse its Standard Essential Patent (SEP) portfolio, after the DOJ warnedGoogle to not do so when it approved Google’s acquisition of Motorola.

Fourth, U.S. State AGs are asking the FTC for a new look at the Google antitrust case.

A recent bipartisan letter from the Attorney Generals of Utah and the District of Columbia said: “We encourage the commission to consider new information and developments that have become available both domestically and internationally since closing its Google investigationper Bloomberg.

This is timely and significant because of the pending EU decisions on Google Search-bias and the Android-tying/app-bias investigation, and also because the Fifth Circuit Court of Appeals is expected to rule in the coming weeks against Google’s Section 230 lawsuit claiming that state Attorney Generals have no law enforcement jurisdiction to investigate or prosecute Google for violation of state laws. 41 State AGs, including Utah and DC’s, oppose Google’s audacious claim of special legal immunity from state law enforcement.

Fifth, new Android mobile search financials spotlight Google’s market power of tying search to Android.

We recently learned fromthe Oracle v. Google-Android copyright infringement case that Android enjoyed monopoly-size >70% gross profit margins in 2014. We just learned from Google’s earnings, that Google’s mobile search dominance also made Google most valuable company in the world.

Google’s CEO Sundar Pichai said: “Above all, our Q4 results show the great momentum and opportunity we have in mobile search…” Given what we now know from the Oracle 2014 Google-Android financials and Google’s 2015 financials that exceeded revenue and profit expectations, Google Android probably now generates over a third of Google’s revenues and over 40% of Google’s profits. This is not normal competitive growth; this is anticompetitive Google-Android contractual tying in requiring Google Search to be the default and prominent search engine on Android devices – to drive dominance in mobile search.

Finally, neither Google nor the USG want to beg media or EU questions into why the USG is aggressively defending Google in public when the DOJ has previously found Google dominant and anticompetitive.

To the extent that Boss Google uses its influence machine to get the USG, FTC or the DOJ to publicly defend Google against the EU as not dominant, or as an innocent victim of the EU’s antitrust charges, they will put the put the USG, FTC, and DOJ in the embarrassing position of answering logical public accountability questions it does not want asked.

Like why is Google allowed to create at least the perception of a conflict of interest by enthroning so many of its former employees or consultants in so many Federal Government positions of commercial importance to Google?

Why did the DOJ not require Google to fully comply with the requirements in its $500m criminal forfeiture, Non-Prosecution Agreement, when Google broke five laws during the probation period?

Why did the FTC shut down the Google antitrust investigation abruptly over the advice of the FTC’s professional investigators, and why did the FTC put out a press release defending Google at Google’s behest?

 

[Originally published at the Precursor Blog]

Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.

Categories: On the Blog

Demand Lawmakers Enact a Permanent Smart Meter Opt Out for Illinoisans

February 08, 2016, 9:54 AM

Although the installation of Smart Meters by ComEd has already been completed in some areas of Illinois – despite protests from concerned citizens – a recent news account alerted Lake County residents that they have been targeted next for Smart Meter installation.

An article published in the Daily Herald on January 29, 2016, stated how Libertyville, IL, is in the next round of communities in Lake County to have standard analog meters replaced by “smart” devices. Quoted in the article was David Doherty, director of the Smart Meter transformation for ComEd, who explained how “Smart Meters collect energy usage information that can be read remotely, allowing the company to determine and react to power outages more quickly.  The meters also will send a signal when a customer loses power.”

According to company literature that is distributed by ComEd to community leaders in advance of Smart Meter installation: “Smart Meters will provide consumers benefits from the new technology, allowing consumers to access their power usage online so habits can be altered, as needed, to better manage their energy consumption. Smart Meters will likewise provide access to optional pricing programs, such as switching use to times when it costs less to produce.”

Spin vs Truth 

The above benefits most likely sound entirely logical to Illinoisans, especially when coupled with this canned statement frequently made by Smart Meter installers when questioned by home owners about the need for a Smart Meter: Smart Meters will eliminate the need for meter readers.  

But Beware, Illinoisans!  What you are receiving from ComEd is spin instead of facts. It was in July of last year when I took the CUBFacts Smart Meter information (Citizen Utility Board) propaganda sheet with its ComEd supplied facts to the woodshed for its inaccurate information.  In my article, “Beware of Propaganda to Quell Inconvenient Truths About Smart Meters”, the CUBFacts Smart Meter Information sheet was evaluated for misleading statements and edited accordingly.  What is in bold was taken directly from CUBFacts, followed each time by my explanation of what really is true!

It is important to your family’s health security and privacy to say NO to a Smart Meter installation when you are accordingly notified.  Take the op-out delay that is being offered. Realize that the opt-out choice is not a permanent one and that Smart Meter installation is just being delayed until 2018 with no opportunity to oppose installation after that. Other states offer a permanent opt-out to their utility customers. ComEd customers in Illinois do not have that option.

ComEd Lobbyist Contrived No-opt out Law

As to the history of the law that makes Wireless Smart Meters mandatory in Illinois: ComEd lobbyists wrote the law; it was passed by the General Assembly against vehement and persistent opposition from the Attorney General, AARP, and informed citizens aware of the risks. ComEd spent 16 million dollars convincing the General Assembly to over-ride Governor Quinn’s Veto. When elected, Governor Rauner then signed another bill favoring ComEd over the rights of citizens to have a choice. 

It is tragic for consumers that Chicago’s powerful and politically-connected ComEd was able to convince the General Assembly to pass a law that could potentially threaten homes, harm lives, adversely impact nature, invade privacy, and, in a broader scope, undermine the state’s security by making the electric grid more vulnerable to cyber-attack.

Doesn’t every ComEd customer deserve the right to have a choice to opt-out permanently in the face of the real and present dangers that having a Smart Meter on the side of their house or business could engender? It is unjust and un-American to force Wireless Smart Meters on every home without alerting residents to the many risks and offering them a choice.

Reasons to Reject Smart Meters

1. Health and Environment – Smart Meters are installed in a Mesh Network which relays data from one house to another and eventually on to a collector unit, which is an additional wireless network that sends the data back to the utility. ComEd says that Radio Frequency (RF) emissions only take place 4 times a day every 6 hours.

That may be true for one household’s data measurements. However, Smart Meters also send and receive network management messages every few seconds around the clock. In a California Court the utility admitted that a Smart Meter emits from 10 to 190,000 bursts a day. Each burst is sending RF/microwave radiation into the home and throughout the neighborhood. The power level of each burst is about 1,000 milliwatts, making Smart Meters one of the most powerful RF radiators in a community

What this means to ComEd Customers?:  that a Class 2B Carcinogen (the category for wireless RF emissions, by the International Agency for Research on Cancer ‘IARC” of the World Health Organization) is being mandated on ALL homes in the ComEd service territory. Even worse, there is NO PERMANENT OPT-OUT OPTION AVAILABLE.

People who have already had their Smart Meter installed are complaining of headaches, ringing in the ears, rashes, nausea, insomnia, chest pressure, heart palpitations, nose bleeds, and weakness, etc. There is a potential threat to those with medical implants and weakened immune systems. The well-being of pets is also of concern. Studies that have been done on wildlife, trees, plants, and bees show that they will also suffer from the RF/microwave emissions blanketing the state.  

Breaking news on January, 29, 2016:  the Pennsylvania Utility Commission is allowing a hearing to go forward of a nurse who says Smart Meter made her sick.  What makes this so interesting is that PECO is an Exelon Company, like ComEd.  

2. Privacy Invasion — Without your consent, the computer inside the Smart Meter collects private energy behavior patterns that will be available to government agencies and could be at some point be for sale to marketers. A hacker or thief could use this data to know whether or not the home is occupied and if high-end electronics are in the home. 

3. Hacking and Cyber-Security – Vulnerabilities in wireless data transmission can pose national security risks to the electric grid. A former CIA Director calls the Smart Grid “really, really STUPID”. ComEd will be installing 4,000,000 access points to the Internet; every private home and business in their service territory.

4. Higher Bills – Smart Meters monitor usage 24/7 as a means of instituting Time-of-Use pricing. Due to escalating charges for peak time usage, bills can double, or worse. Time-of-Use pricing boosts ComEd profits while penalizing those who need lower electric rates the most—stay-at-home moms, the elderly, the unemployed, and those with disabilities. Anyone who is unable to change their behavior, such as washing dishes and doing laundry at off-peak hours, will not benefit from having a Smart Meter.

5. Appliances: RF Radiation and Privacy Invasion – New appliances come with mandated wireless RF transmitters that emit RF signals to the wireless Smart Meter around-the-clock. Manufacturers can also keep track of information about their appliances for future marketing through the wireless transmissions.  Because the Smart Appliance Services are provided through wireless networks and the Internet, communications could be intercepted by others.  

6. Lack of Control – The utility owns and maintains 100% control over computer hardware and software upgrades inside Smart Meters. With Demand Response, a utility company can selectively turn on/off appliances or an entire household.

7. Loss of Property and Safety – There has been hundreds of reports of electrical fires caused by arching and sparking within the Smart Meter. Homes with older wiring may be more susceptible to the risk of fire.  

Corix, the company ComEd is using for installation gives their employees, who have no prior electrical experience, two weeks of classroom instruction and one week of field work. In California, more than a 100 GE Smart Meters (manufacturer ComEd selected) have exploded right on homes due to a power surge. And, Smart Meters have been known to “fry” electronics. 

Should you still have doubts about the dangers posed by Smart Meters, this website deserves careful study. Under the name of SkyVision Solutions, this site  (www.smartgridawareness.org) is dedicated to raising public awareness about the costs and risks associated with smart grid systems as well as the potential hazards related to Radio Frequency Radiation emissions from Smart Meters.

Here is the link to my https://youtu.be/aoodNMI3nzc appearance on a local Comcast TV cable show talking about the dangers posed by Smart Meters, with a warning about cell phones. Both wireless devices produce electromagnetic radiation. There is mounting evidence that that RF-EMF radiation is carcinogenic. The fact that exposure to our population is increasing at an exponential rate, the potential consequences are catastrophic.

Action Required 

1)  Call the ComEd Smart Meter installation line (866) 368-8326 and request a DELAY if a Smart Meter has not already been installed. If one has been installed, call and have it be replaced with a non-transmitting meter.

2)  Contact Governor Bruce Rauner and your elected Illinois General Assembly legislators. Insist the Utility Modernization law be amended and the ICC ruling requiring mandatory compliance be changed. Demand a PERMANENT TRUE OPT-OUT, NOT JUST A DELAY! 

ALL WIRELESS DEVICES, INCLUDING CELL PHONES, ARE VOLUNTARY AND CAN BE TURNED OFF WHEN NOT IN USE. SMART METERS ARE MANDATORY AND ARE ON 24/7, FOREVER.

[Originally published at Illinois Review]

Categories: On the Blog