Wired: Antitrust Actions in Foreign Countries Cause Tech Giants to Change Business Practices Worldwide

Masters of the Universe being sworn in to testify
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A recent article from Wired outlines how tech giants including Google and Apple are finding themselves increasingly under the scrutiny of global antitrust regulators. When countries like South Korea force tech giants to change policies within the country such as easing their stranglehold over app developers, the changes often occur on a global level.

Wired reports in an article titled “Google Is Getting Caught in the Global Antitrust Net,” that the Masters of the Universe are increasingly finding themselves at the mercy of antitrust regulators around the globe as their services become even more dominant in the marketplace. In recent months, foreign countries are not only hitting tech titans with fines — which the massive companies can easily afford to pay — but are also forcing the companies to change how they do business.

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Google's Senior Vice President Sundar Pichai gives a keynote address during the opening day of the 2015 Mobile World Congress (MWC) in Barcelona on March 2, 2015. Phone makers will seek to seduce new buyers with even smarter Internet-connected watches and other wireless gadgets as they wrestle for dominance at the world's biggest mobile fair starting today. AFP PHOTO / LLUIS LLENE (Photo by Lluis GENE / AFP) (Photo by LLUIS GENE/AFP via Getty Images)

Google’s Senior Vice President Sundar Pichai gives a keynote address during the opening day of the 2015 Mobile World Congress (MWC) in Barcelona on March 2, 2015. Phone makers will seek to seduce new buyers with even smarter Internet-connected watches and other wireless gadgets as they wrestle for dominance at the world’s biggest mobile fair starting today. (AFP PHOTO / LLUIS LLENE)

Wired reports:

Increasingly, however, foreign countries are going beyond slap-on-the-wrist fines. Instead, they’re forcing tech companies to change how they do business. In February, Australia passed a law giving news publishers the right to negotiate payments from dominant internet platforms—effectively, Facebook and Google. In August, South Korea became the first country to pass a law forcing Apple and Google to open their mobile app stores to alternate payment systems, threatening their grip on the 30 percent commission they charge developers. And in a case with potentially huge ramifications, Google will soon have to respond to the Turkish competition authority’s demand to stop favoring its own properties in local search results.

The consequences of cases like these can ripple far beyond the borders of the country imposing the new rule, creating natural experiments that regulators in other countries might emulate. The fact that Google and Facebook have acquiesced to Australia’s media bargaining code, for example, might accelerate similar efforts in other countries, including TaiwanCanada, and even the US. Luther Lowe, who as Yelp’s senior vice president of public policy has spent more than a decade lobbying for antitrust action against Google, refers to this phenomenon, approvingly, as “remedy creep.”

In other cases, the companies being forced to change their business model abroad might decide to adopt the shift globally before they’re forced to. After settling an investigation by Japan’s Fair Trade Commission, Apple decided to implement the solution—allowing audio, video, and reading apps to link to their own websites to accept payment—globally.

Anu Bradford, a professor of international and antitrust law at Columbia University, commented: “Sometimes it’s the market driving it: The companies decide it’s too costly to make different compliance strategies in different markets. Or, sometimes, it’s in anticipation of copycat regulation: They know it’s out there, and they’re not going wait for the Russians or Turkish to do their own case.”

Wired notes that the Turkish case against Google could be the company’s biggest challenge as it focuses heavily on how Google uses its power as an internet traffic gatekeeper. The case related to local search, which is how Google lists businesses when users search for terms such as “restaurants near me,” or “hardware store.” Nearly half of all Google searches are made up of local searches according to some analysts.

For some time, critics of Google have claimed that the company unfairly uses its dominance to manipulate local search results to influence users towards its own services. One longtime Google competitor, Yelp, initiated the case in Turkey by filing a complaint with the Turkish competition authority.

Google claims that its local search results are designed to help users, but Turkish regulators believe that Google “has violated Article 6 of the Turkish Competition Law by abusing its dominant position in the general search services market to promote its local search and accommodation price comparison services in a way to exclude its competitors.”

In April, the Turkish regulator imposed a $36 million fine on Google, but also issued a preliminary ruling ordering the tech giant to find a way to display local search results without favoring itself over competitors.

Read more at Wired here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com

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