Wall Street Journal
The European Union’s competition regulator is intent on forcing changes to Google’s business practices and levying significant fines for breaching the bloc’s antitrust rules.
For more than five years, the European Commission has been inspecting Google’s business operations on concerns the Silicon Valley company is abusing its dominance and shutting out rivals in various markets. The investigations have resulted in formal charges in several areas of Google’s practices, including over the company’s conduct with its comparison shopping service and its Android mobile operating system. The commission intends to establish that Google and Alphabet have “infringed” on EU antitrust rules, and it will seek to end these actions and fine the companies for the alleged infringements.
[Commentary] Citigroup projects that spending on political ads on Facebook could surpass spending on Google in 2016, reversing the historical pattern. This is no small accomplishment, considering how powerful search advertising remains, as a conduit for motivated donors and volunteers. This reflects both Facebook’s vast reach and the tools it offers advertisers to target ever-narrower segments of its users. For campaigns striving to get supporters to the polls, as well as change minds, this ability to “micro-target” is manna from heaven. As with conventional advertising, it is now happening with unprecedented scale and precision in politics.
Hackers used an army of hijacked security cameras and video recorders to launch several massive internet attacks last week, prompting fresh concern about the vulnerability of millions of “smart” devices in homes and businesses connected to the internet.
Facebook is teaming up with the World Bank and the Organization for Economic Cooperation and Development to pioneer a new way of collecting data, taking the first step on a path to what they hope will be broader, less expensive and more timely insights into the state of the global economy.
The three partners launched a new measure of business sentiment based on questioning companies that use their Facebook pages to connect with customers. Known as the Future of Business Survey, the report has been in testing since February and received responses to 15 queries from a total of 90,000 small and midsize firms across 22 countries. Its first public release shows that those businesses are more optimistic about their prospects than other companies surveyed by more traditional means.
Pay-TV providers could lose nearly $1 billion in revenue as 800,000 customers cut the cord over the next 12 months, according to a new study from the firm cg42. The study, which is based on an online survey of 1,119 US customers, estimates that pay-TV providers lose about $1,248 per cord-cutter annually. That’s because the average cord-cutter saves $104 a month—about 56 percent of their bill--from dropping cable TV. Some analysts say that if consumers ditch cable TV they could wind up paying even more for the combination of standalone high-speed Internet and streaming services. But the study found the opposite -- that going without pay TV service yields savings. That’s in part because people tend not to spend much more than $15 on streaming services even after cutting the cord.
A “cord-haver” spends about $187 a month on average prior to cutting the cord, including cable TV, phone, Internet access and streaming services. Meanwhile, a typical “cord-never” -- someone who never had a pay-TV connection -- spends about $71 on streaming services and home Internet combined, and the average cord-cutter spends $83. “The consumer is discovering they don’t need the mean, evil cable company to get the content that they want, and they can get it for a better deal,” said Steve Beck, managing partner at cg42. A $1 billion loss of revenue is small for the entire pay TV industry, but it is a warning sign. According to the survey, the vast majority of people who cut the cord or never had pay-TV in the first place don’t exactly thirst for traditional television, despite the draw of live sports. About 83 percent of cord-cutters surveyed said they can access “most or all” of the content they want to watch without a pay-TV subscription, and about 87 percent of cord-nevers said the same.
The two biggest cable companies said they will soon start selling wireless service but they will be entering a competitive market with handcuffs.
The CEOs at Comcast and Charter Communications both discussed plans to begin reselling Verizon Wireless service as early as 2017. But the Verizon contract only allows the companies to sell cellphone service as part of a bundle, not as a stand-alone product. That means consumers won’t be able to switch to Comcast or Charter for cellular service without also buying either cable television or home internet, too.
As it grapples with a massive global smartphone recall that is estimated to cost more than $1 billion, Samsung Electronics Co. is moving swiftly to sell stakes in other technology companies to raise cash. The world’s biggest smartphone maker said Sept 18 it has sold shares in computer-drive maker Seagate Technology PLC, chip maker Rambus Inc., Dutch semiconductor-equipment maker ASML Holding NV and Japanese electronics maker Sharp Corp.
The divestments come as Samsung said it would recall 2.5 million Galaxy Note 7 smartphones globally after reports of the phones catching fire. While Samsung didn’t disclose how much it would raise from the share sales, any cash generated from the sale would help it pay down ballooning costs from the smartphone industry’s biggest recall to date. Under the guiding hand of heir apparent Lee Jae-yong, Samsung has been moving to shed noncore assets to raise cash as the company seeks to expand into other areas including biopharmaceuticals.
The Consumer Product Safety Commission announced a formal recall of the Galaxy Note 7 phone, which has sparked fires and a global crisis for Samsung Electronics Co. The CPSC said consumers “should immediately stop using and power down the recalled Galaxy Note 7 devices.” The agency said users can request a Galaxy Note 7 with a different battery, a refund or a replacement device. Samsung, in a separate statement, said it expected to have the new Note 7 devices at most US retail locations by Sept 22. Samsung already had been pursuing a global recall effort of its own, after reports surfaced of overheating and exploding batteries in its new top-of-the-line phone. But the company’s recall effort has been plagued by problems, including conflicting consumer information and communications troubles with regulators. According to the CPSC, Samsung has received 92 reports of the batteries overheating in the US, including 26 reports of burns and 55 reports of property damage, including fires in cars and a garage.
[Commentary] A recent court ruling could mean big things for privacy regulations governing telecommunications, cable and internet companies—mostly because it highlights what those regulations may not cover. The Ninth Circuit Court of Appeals ruled that the FTC cannot regulate any aspect of a common carrier’s business. That includes cable companies and other broadband providers, which are classified as common carriers under new net neutrality rules. Meanwhile, the Federal Communications Commission, which regulates common carriers, doesn’t have jurisdiction over non-communications services. As companies with common carrier status expand into new lines of business such as mobile video and online advertising, the decision could be interpreted to mean that some of their business lines are left effectively unregulated when it comes to privacy. And that void could push lawmakers to act. Any gap in the law should worry investors because of the uncertainty over what might fill it.
The nation’s top television regulator is preparing a major push to win support for a compromise version of his proposal to open up the market for television set-top boxes, apparently. Federal Communications Commission Chairman Tom Wheeler has made a priority in 2016 of breaking the cable industry’s longtime grip on the lucrative market for those boxes. The devices have long been used to translate cable signals into TV programs, but several companies see a market for devices or services that offer integrated access to both cable TV and independent video-streaming services like Netflix Inc. or Hulu LLC. Chairman Wheeler’s plan would require cable companies to make their feeds available to other device makers through apps. Regulators hope the increased competition will help drive down prices. Proponents also say it would give a major boost to internet-based media. By some estimates, the set-top-box business brings in $21 billion a year in rental fees for cable and other pay-TV providers, which dominate the market. Consumer advocates estimate that customers overall pay $6 billion to $14 billion more for the boxes than they would if there were greater competition. But Chairman Wheeler remains at risk of being blocked by objections from cable and media companies, say several people familiar with the matter, despite extensive concessions to the cable industry and others that condemned the original plan.
Big media companies worry that the new generation of devices that Chairman Wheeler’s plan would foster might pose a long-term threat to their business model, such as by offering unlicensed internet versions of their content. They are expected to file detailed comments with the agency early this week. Some cable companies, meanwhile, worry about the potential for what they view as unaccustomed FCC meddling in their complex deals with their program suppliers.