Google scrutinised over competition and privacy issues

It’s not been a good week for Google. The firm has attracted the attentions of European antitrust authorities, while executives in Italy have been indicted for breaching local privacy laws.

Both incidents highlight just how much power, real or perceived, Google is attributed with. Earlier this week Google confirmed that it has been notified by the European Commission of the receipt of complaints from three companies: a UK price comparison site, Foundem; a French legal search engine called ejustice.fr; and Microsoft’s Ciao! from Bing.

The crux of the complaints is that Google’s algorithms demote these sites in Google’s search results because they compete with Google to some extent. So the issue here, which the EU may choose to investigate, is whether Google is using its majority share of the search and advertising markets to suppress competition.

Julia Holtz, Google’s senior competition counsel, denies this: “Our algorithms aim to rank first what people are most likely to find useful and we have nothing against vertical search sites — indeed many vertical search engines like Moneysupermarket.com, Opodo and Expedia typically rank high in Google’s results,” Holtz said.

Meanwhile, in Italy, three Google employees, including one who left the firm in 2008, have been convicted of breaching Italian privacy regulations. The case started in 2006 when students at a school in Turin, Italy, uploaded footage of themselves bullying a schoolmate to Google Video (this was prior to the acquisition of YouTube).

Google removed the video at the request of the police, but a public prosecutor in Milan pressed on with an indictment of the Google employees. At the outcome of that trial this week, a judge in Milan issued six month suspended sentences to the Google employees for failure to comply with Italian privacy laws. This suggests that content hosting companies, like Google Video or YouTube, would be criminally responsible for the content of videos uploaded by users.

Matt Sucherman, VP and deputy general counsel for Europe, Middle East and Africa at Google, comments: “European Union law was drafted specifically to give hosting providers a safe harbour from liability so long as they remove illegal content once they are notified of its existence.”

A notice and take down regime of this kind is designed to help creativity flourish and support free speech while protecting personal privacy, Sucherman said. But, if “sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them — every piece of text, every photo, every file, every video — then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.”

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European Parliament passes telecoms reforms

After two years of wrangling, the European Parliament has formally approved the EU’s telecoms reform package, ushering in a new wave of consumer protection, and quite possibly, operator headaches.

The package, championed by Viviane Reding, EU Telecoms Commissioner, since 2007, proposes a somewhat controversial overhaul of European telecoms legislation. Prior to the parliament’s summer recess, European authorities agreed on the creation of a new European body of telecom regulators called BEREC (Body of European Regulators for Electronic Communications), the right to impose functional separation on carriers – splitting the network and services operations, and plans to harmonise radio spectrum usage among member states.

But the parliament was required to agree on the package as a whole and rejected a proposal that would have allowed national authorities to kick internet users offline for illegally downloading copyrighted material without intervention from a court. During the meeting in Strasbourg on Monday, a compromise was reached, reaffirming EU citizens’ right to privacy in that “national authorities cannot restrict internet access for public policy reasons unless there has been a prior, fair and impartial procedure and effective and timely judicial review.”

European consumers will also benefit from new rights, such as the right to switch fixed or mobile operator in one working day while keeping their number; the option of signing a contract which lasts no longer than 12 months and a 24 month cap on all contracts; as well as clearer information of tariff and pricing structures; and the right to be informed about data breaches from their telecoms operator.

Under the new EU rules, national telecoms authorities will also have the power to set minimum quality levels for network transmission services so as to promote “net neutrality” for European citizens – something of a bone of contention in the operator community.

The agreement paves the way for the entry into force of the EU telecoms reform in December 2009, after which member states have 18 months to implement the rules into their national telecoms laws.

“The EU telecoms reform will bring more competition on Europe’s telecoms markets, better and cheaper fixed, mobile and internet services and faster internet connections for all Europeans. Thanks to the strong support of the European Parliament today, Europe has put citizens in the centre stage in telecoms regulation”, said Reding.