This week’s collection of interesting antitrust pieces regarding technology include Google’s troubles abroad in China and the European Union, SAP’s recent defense against competitor Versata’s antitrust lawsuit, a look at the way changes to European Union anti-competition laws would affect the smartphone marketplace, and a lawyer/would-be politician who is the subject of a lawsuit by 23 lawyers claiming non-payment of attorney fees after a successful jointly-filed legal action against Microsoft.
Google/China – China Is Still Reviewing Google’s License | The Wall Street Journal
Google’s efforts to regain a foothold in China are meeting some resistance from Chinese licensing officials and the company is running into a different kind of trouble in Europe; that of the anticompetitive kind. Jason Dean and Peppi Kiviniemi provide additional information on the search engine/advertising giant’s on-going struggle to prove its business practices are fair and its policy on search results in China are benign and in keeping with Communist censorship regulations. They write:
Wang Lijian, spokesman for China’s Ministry of Industry and Information Technology, said Google’s application for annual renewal of its Internet content provider license came close to the end-of-June deadline, pushing back the approval process.
“As Google submitted the application in late June, it is impossible to finish the examination in such a short time,” Mr. Wang said.
Apparently, the Chinese government is still a little peeved about Google’s decision a few months ago to redirect its Chinese address, google.cn, to a site located in Hong Kong, which was uncensored and incensed Chinese information regulation authorities. In Europe the company is fighting to convince European Commission officials that its search function is not monopolistic and that companies such as Microsoft, who have been assisting the EC with legal legwork, aren’t acting altruistically. Here are the related passages from Dean and Kiviniemi’s article:
The commission began investigating Google in late February, spurred on by complaints from three competitors, including Microsoft Corp. The probe is concentrating on the company’s dominance in online searches and search advertising.
However, [Mr.Joaquin Almunia, the EU competition commissioner] noted that understanding the competitive landscape of online markets is a complex task with its innovative business models that are constantly evolving.
The real question remains the actual degree of barriers to entry to competitors, Mr. Almunia said. How easy is it for consumers to switch from one service to another, and can a company use its strong position in one area such as online search, to prevent competitors from advancing in a related market, are questions the commission is asking.
In their defense, Google claims it is doing its best to comply with informational requests from the EC:
Google said in a statement it was working with the commissioner and his team to answer their questions, “including how Google’s search ranking works to produce the most relevant and useful search results for users, and remains confident it operates within European competition law.”
SAP – EU anticompetition complaint lodged against SAP | Bloomberg Businessweek
Chris Kanaracus offers some coverage on a recent action by software company Versata against SAP for making it hard to inter-operate with their ERP (enterprise resource planning) products and who also have been accused of copying Versata’s software applications. Here’s the scoop:
Versata compared SAP’s actions to the ones that resulted in the landmark antitrust case against Microsoft. An E.U. ruling in Versata’s favor would open up the market for pricing software and give customers choice, it said.
“We are evaluating the complaint and offering no comment until that is complete,” SAP spokesman Andy Kendzie said in an e-mail.
Versata had previously filed a patent suit against SAP in connection with the alleged product cloning. A jury awarded the company roughly US$139 million in damages last year, although the case is not yet finalized.
It appears that SAP is looking down the barrel of another difficult legal battle, but there is still a chance that the company might squeak by with a little fancy footwork and maybe some kind of pre-trial licensing agreement.
Smartphones – The dangers of a “significant” change in EU AntiTrust Laws | all about symbian
A small change in the wording of European Union antitrust law could have some major and lasting effects. Ewan Spence takes a look at the proposed change from the point-of-view that free market factors should determine which software applications smartphone manufacturers decide to support and not be dictated by some restrictive law from on high. He writes:
Having a law that allows a regulatory body to force Company A to put Company B’s product on their platform is a very slippery slope. Having thought about the issue, it’s not one that I want to see on the statute books. What I would like to see is that Company A openly provides the documentation and information that would allow Company B to develop for the platform, and that the hardware (and software) of the platform would not put up a roadblock to the developed software.
In other words, the opportunity for any company should be there, but there should be no compulsion to force its inclusion on any hardware. That should be up to the market. If people want Flash, they can install it.
Spence also uses a Microsoft open-type product to make his point, none other than Windows Media Player:
Yes, it does mean that a closely tied competitive advantage (such as the symbiotic relationship of iPhone and iTunes) is minimised, but it opens up other areas of development and growth. Look at Microsoft’s Windows Media Player: by keeping it open to pretty much any hardware that follows the Media Device Protocol, it continues to prove useful, a consistent interface for users, and a standard that manufacturers and developers (including Symbian) can follow, knowing that it provides the broadest reach for connectivity.
Increased market penetration and adoption sound like good reasons to leave a platform open to developers who stick to the rules of engagement and should *not* dictate any certain company to mandatorily include support for other companies’ applications, according to Spence. An argument could be made for either, or many, of the stances surrounding smartphone software developer environments but ultimately it will be consumers who make the choice by voting with their dollars and sense.
Microsoft – Lawsuit seeks arbitration for attorney fees in Microsoft settlement case | Simple Thoughts
A lawsuit filed by 23 states against Microsoft is causing much concern to the lawyers involved in the class-action case. According to Michael J. Crumb, the Iowa lawyer who initiated the action owes the other involved parties the payment of attorney fees. So much concern, in fact, that the group has filed a lawsuit against Roxanne Conlin of Des Moines for non-payment of the fees after winning a judgment against the Redmond, Washington software giant.
The lawsuit claims that attorneys in 23 states provided advice, pleadings, participation and prosecution in the class-action case in their states, and in the Iowa case against Microsoft.
The group formed The Microsoft Litigation Consortium. The lawsuit filed last month in Polk County District Court said the group signed an agreement with Conlin that called for the consortium to receive 20 percent of attorney fees awarded in the case. It also said disputes were to be resolved through arbitration.
“The attorney fees awarded to (Conlin) at the conclusion of litigation were not shared … in violation of the … agreement,” the lawsuit states.
The lawsuit said that Conlin has refused to comply with the agreement and that “on multiple occasions (the consortium) has requested that (Conlin) comply with the … agreement and arbitrate the dispute regarding the fees.”
Conlin claims that the ill-timed action by the group is unfounded and likely related to her current bid for Republican U.S. Sen. Charles Grassley’s seat in the fall. Be sure to read the rest of Crumb’s piece for more on this potentially unsettling kerfluffle.
Bonus antitrust piece o’ the week: A Practical Guide To Merger And Acquisition Antitrust Clearance by W. Joseph Price of Kelley Drye & Warren LLP via The Metropolitan Corporate Counsel.