Washington was reacting Tuesday to the news that Google has been hammered by the European Commission with a record fine for using its dominant position in search to anti-competitively favor its comparison shopping service over others.

Google had not returned a request for comment at press time.

Related: European Commission Fines Google $2.7 Billion

The Information Technology & Innovation Foundation (ITIF), a tech policy think tank, jumped to Google's aid.

"Today’s ruling is bad for consumers and bad for innovation," said ITIF president Robert Atkinson. "The EU has effectively decided that some companies have become too big to innovate. The EU’s actions have created a cloud of uncertainty that will make large tech companies overly cautious about making changes to the user experience and service offerings that would benefit consumers."

The Computer & Communications Industry Association, of which Google is a member, took aim at the EC decision.

“The Commission’s Decision marks a worrying step away from the key objectives of competition law enforcement," said CCIA Europe director Jakob Kucharczyk. "Companies should not be punished for introducing innovative products that consumers and advertisers value. Providing direct answers to users’ search queries is unquestionably a product improvement. All major search engines do it. Courts and competition authorities around the globe have found that there are procompetitive justifications for such product improvements.

“It seems the Commission’s case is mainly focused on competitors who disagree with Google competing on the merits," Kucharczyk continued. "We fail to see the evidence for consumer harm and for quality-related product degradation. If the result of this investigation is to force Google to undo more than 10 years of search engine evolution, EU competition enforcement would clearly not live up to its promise of spurring innovation.

“Leaving aside the commission’s very narrow market definitions, Europe’s e-commerce sector is thriving," he added. "The success of companies like Zalando, Asos or Trivago show consumers have increasing choices to find, compare and buy products online. Investments into e-commerce ventures have steadily increased. All of that is not indicative of a market suppressed by a dominant player.”

Thomas Lenard, senior fellow and president emeritus at the Technology Policy Institute, suggested the EC had gotten off track.

"The focus of the European Commission’s action against Google today appears to be harm to competitors rather than harm to consumers, which should be the focus of antitrust enforcement," Lenard said. "The EC should demonstrate in concrete terms how consumers have been harmed."

Google has maintained that it is simply helping consumers find products they are looking for more quickly and easily.

Scott Cleland, president of Precursor LLC and chair of the ISP-backed NetCompetition, saw it quite differently.

"The EU is right," said Cleland, long a strong critic of the search giant. "Google is a monopoly. It abuses its search monopoly by self dealing and predatorily foreclosing competition. This seven-year EU process has been fair, competent and patient to get it right."

Cleland suggested U.S. regulators should take a page from the EU, and said he expects that they will.

"Sadly the EU is cleaning up the mess created by U.S. non-enforcement of antitrust law caused by obvious political interference and protection orchestrated by Google's outsized political clout," Cleland said. "This decision will trigger a domino effect of additional enforcement against Alphabet-Google in the EU, the U.S. and around the world in search, advertising, Android and Google Play.

"This is the first inning of Google's new official monopoly abuse reality," he added.

“All competition authorities should take questions of platform dominance seriously," said Public Knowledge President Gene Kimmelman. "Although we are not in a position to assess the merits of this particular case, we appreciate the European Commission focusing on these important issues. In these types of cases, antitrust officials must ensure that no company use its market power to foreclose competition, or to leverage its success in one market to gain an unfair advantage in another.

“This case is likely to have much wider implications than the comparison shopping dispute highlighted in the Commission’s statement. We believe effective antitrust enforcement must offer marketplace solutions that benefit consumers and enable competition and innovation to flourish. However this case is ultimately resolved, we believe it is critical that any online platform with excessive market power should not be allowed to discriminate unfairly against competitors while being allowed to develop product and service innovations that benefit consumers."

"Google's market power is one of the most critical challenges for competition policymakers in the world today," said
Barry C. Lynn, director of the Open Markets program at New America. "By requiring that Google give equal treatment to rival services instead of privileging its own, [European Commissioner for Competition Margrethe] Vestager is protecting the free flow of information and commerce upon which all democracies depend. We call upon U.S. enforcers, including the Federal Trade Commission, the Department of Justice, and states attorneys general, to build upon this important precedent, both in respect to Google and to other dominant platform monopolists including Amazon. U.S. enforcers should apply the traditional American approach to network monopoly, which is to cleanly separate ownership of the network from ownership of the products and services sold on that network, as they did in the original Microsoft case of the late 1990s."

Sen. Amy Klobuchar (D-Minn.), the ranking member of the Subcommittee on Antitrust, Competiton Policy and Consumer Rights, said she would be keeping an eye on dominant players.

“Dominant internet platforms increasingly affect not just the products we buy and the information we seek, but innovation and economic opportunities for small businesses," she said following the decision. "I am committed to pursuing these issues to ensure that the internet is an engine to increase economic opportunity and protect consumers in the 21st century economy.”

Washington — Federal Communications Commission chairman Ajit Pai is proposing major deregulation of broadband business data services (BDS) — such as credit card readers, ATMs and institutional hookups — and that’s good news for cable ISPs looking to get a bigger piece of that business without government restrictions.

While former FCC chairman Tom Wheeler’s proposal initially imposed potential new rate regulations on cable Internet-service providers and reimposed them on incumbent providers, Pai mostly sees a booming, competitive business in business broadband.

“The extensive record compiled by the commission’s excellent staff shows substantial and growing competition in many areas of the country, thanks to new market entrants like cable companies,” Pai said in a blog post.

Pai is extending his deregulatory view to that marketplace with a proposed report and order he plans to vote on at the April meeting.

‘VIGOROUS’ MARKET
Generally, the new takeaway from that proposal is that competition for most business broadband services is “robust and vigorous” and legacy regulations are “more likely to impede the introduction of new services and raise prices than to benefit consumers.”

That’s in contrast to the Wheeler proposal, which was predicated on the assumption that incumbent providers were levying “artificially high prices being charged to small businesses, schools, libraries and, ultimately, consumers.”

Scott Cleland, chairman of the ISP-backed NetCompetition, said, “Everything the Pai FCC has signaled so far is much less regulation of the BDS market not more, and that is very good news for more competitive infrastructure investment.”

Cable is recognized as a major force in the order, a dramatic change in the market over the past decade. “Cable providers have emerged as formidable competitors in this market,” citing stats from MoffettNathanson principal and senior analyst Craig Moffett that cable’s annual BDS growth rate has been 20% over the past few years, as it takes on the incumbents and competitive local-exchange carriers.

That translated to a $12 billion piece of the BDS market in 2015, said the FCC, with a projection for that share to double by 2019.

Cable operators, including NCTA: The Internet & Television Association, had pushed the FCC this time around to clarify that some broadband business services are private carriage not subject to the requirements of Title II of the Communications Act, such as “just and reasonable” rate regulation.

The order delivers that clarification, or at least it proposes to do so, confirming that cable operators can offer BDS service as a private carriage service not subject to Title II regulations. That would allow smaller operators that might not typically offer BDS to provide one-off offerings for specific customers.

Cable operators had sought that flexibility under the Wheeler proposal, but the idea did not get traction.

The FCC also concluded that having a competitor “nearby” is sufficient to qualify a market as competitive or, as the order puts it: “Traditional and nontraditional providers of business data services constrain an incumbent’s pricing outside of immediate geographies used to describe market concentration” in the Wheeler proposal.

The order cites cable as such a competitor, using as an example a cable company with “nearby” fiber nodes and the ability to provide Ethernet service over either fiber or hybrid fiber coax.

While the thrust of the order is to deregulate the price cap on incumbent carriers such as AT&T and Verizon Communications, a deregulatory tide lifts all boats.

At first blush, it might appear to be an advantage to have your competitors reregulated. A cable executive speaking on background, though, said that subjecting competitors to rate regulation is frequently “not a good thing.”

For instance, he suggested, were the FCC to cap rates at cost for an MSO’s ILEC competitor, cable operators would be forced to compete at that capped price. Thus, the free market of rates Pai is aiming for is preferable to self-regulating at a competitor’s level.

Being able to provide BDS as a non-common carrier service is one advantage, as is not subjecting cable operators to a new category of rate regulations should they invest to compete against the ILECs.

CLEC PUSHBACK
INCOMPAS, which represents the competitive telecoms that backed Wheeler’s regulatory approach to ILECs, was pushing back last week, looking for proof of the FCC’s assertion that most markets (92%) were sufficiently competitive to preclude price regulations to prevent monopoly and duopoly pricing.

Invoking the transparency chairman Pai has been pushing, INCOMPAS called on the FCC to release that information before the April 20 vote.

“It is critical to a thoughtful and reasoned consideration of this order to be able to assess exactly what that means, and how many small and medium-sized businesses and critical community institutions could face dramatic price hikes,” INCOMPAS said.

SIDEBAR: Tale of the Tape
According to an FCC summary, the agency’s new business data order, scheduled for a vote April 20, would:
■ “Confirm that certain competitive offerings constitute private carriage.”
■ ”Find that competition for lower-speed services (DS1s and DS3s) is robust in some, but not all, counties, and apply a competitive market test to determine where actual and potential competition is likely to constrain prices and lead to additional investment.”
■ “In areas with sufficient competition, modernize rules to facilitate additional infrastructure investment and next-generation services by ending tariffing and other legacy pricing regulations.”
■ “In areas without sufficient competition, maintain price caps …”
■ “Grant carriers additional flexibility to offer discounts in such areas to schools, libraries, r ural healthcare clinics, and other special access customers.”
■ “Ensure continued Commission oversight by prohibiting the use of agreements that would bar disclosure of contract terms to the FCC going forward.”
— John Eggerton