Stories from Abroad

[Commentary] The problem with regulating technology companies is that, faced with tough new rules, they can eventually innovate their way out, often by switching to newer, unregulated technologies. The risk of targeted regulation informed by little other than economic doctrines might even be fuelling a corporate quest for eternal disruption: instead of surrendering to the regulators, technology firms prefer to abandon their old business model. It’s through this lens that we should interpret the likely fallout from the €2.4bn fine imposed on Alphabet, Google’s parent company, by the European commission. It arrives after a lengthy, seven-year investigation into whether the company abused its dominance to promote its own online shopping service above search results. The commission’s case seems sound; the sad fate of small online retailers, unable to compete with Alphabet over the past decade, suggests as much.

However, one should not mistake the factual correctness of the commission’s case for an informed strategic vision: if it has a clue about effective ways to limit the power of data platforms, it’s not showing it. The reality is that even though advertising-powered search still accounts for the bulk of Alphabet’s earnings, the company’s real focus these days is on finding lucrative and creative uses for the troves of data that it has already extracted, processed and turned into artificial intelligence. Alphabet’s future revolves around information-intensive services, not around running matchmaking platforms for advertising.

[Evgeny Morozov is a visiting scholar at Stanford University and a Schwartz fellow at the New America Foundation.]

Apparently, As US officials investigated in January the FSB's alleged role in election cyber attacks, US technology firms were quietly lobbying the government to soften a ban on dealing with the Russian spy agency. New US sanctions put in place by former President Barack Obama last December - part of a broad suite of actions taken in response to Russia's alleged meddling in the 2016 presidential election - had made it a crime for American companies to have any business relationship with the FSB, or Federal Security Service.

US authorities had accused the FSB, along with the GRU, Russia's military intelligence agency, of orchestrating cyber attacks on the campaign of Democratic presidential candidate Hillary Clinton, a charge Moscow denies. But the sanctions also threatened to imperil the Russian sales operations of Western tech companies. Under a little-understood arrangement, the FSB doubles as a regulator charged with approving the import to Russia of almost all technology that contains encryption, which is used in both sophisticated hardware as well as products like cellphones and laptops. Worried about the sales impact, business industry groups, including the US-Russia Business Council and the American Chamber of Commerce in Russia, contacted US officials at the American embassy in Moscow and the Treasury, State and Commerce departments, according to five people with direct knowledge of the lobbying effort.

The European Union’s antitrust watchdog has handed down a string of big decisions in recent years against top US technology firms, in what might look to US companies and officials like a trend by Brussels to train investigations on large American companies.

EU officials deny any bias. “We don’t go against Google because it’s an American company but because it’s a company abusing its dominant position in our market.… If it were in Brazil, we wouldn’t care,” a senior EU official said, referring to the EU’s €2.42 billion ($2.71 billion) fine June 27 against Google for unfairly favoring its shopping ads in its search results. EU competition officials are, to a large extent, constrained by antitrust rules and legal precedents when making decisions against any companies, be they American, European or otherwise. But unlike Washington, where U.S. enforcers need to prove their cases before a judge, the EU’s competition directorate acts as prosecutor, judge and jury in competition cases—and only needs to convince itself. Experts say American tech companies are currently getting increased scrutiny because they happen to dominate the industry. This comes at a time when one of the top priorities for the European Commission, the bloc’s executive body, is to ensure the EU’s common market functions more efficiently online and across borders.

Canadian courts can force internet search leader Google to remove results worldwide, the country's top court ruled June 28, drawing criticism from civil liberties groups arguing such a move sets a precedent for censorship on the internet.

In its 7-2 decision, Canada's Supreme Court found that a court in the country can grant an injunction preventing conduct anywhere in the world when it is necessary to ensure the injunction's effectiveness. "The internet has no borders - its natural habitat is global," the Supreme Court wrote in its judgment. "The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates - globally."

The "Reuters Institute Digital News Report 2017" confirms that the screens-of-preference for younger audiences are mobile and dynamic. But identifying the platform does not necessarily tell you the source of the news. Consumers may look at an online or social media site to find reporting from established journalism sources (e.g. CNN, The New York Times, Fox) or just as easily from ersatz self-proclaimed bloggers or alt news sources.

The 136-page report delves more deeply into the distinction between the reception platforms and the actual content of the news. The Reuters Institute, which conducted the global research (30 countries on five continents) with the University of Oxford, acknowledges that the findings are "a reminder that the digital revolution is full of contradictions and exceptions." The results are also a roadmap toward future news consumption patterns, quantifying current usage patterns and offering eye-opening ideas for media providers about where to focus for future news packaging. The findings raise questions, such as whether today's 18-to-24 year-olds (only 24% of whom now consider TV as a primary news source) will migrate to TV sets by the time they are 55+ years old.

A new wave of powerful cyberattacks hit Europe on June 27 in a possible reprise of a widespread ransomware assault in May that affected 150 countries. Ukraine reported ransom demands targeting the government and key infrastructure, and the Danish Maersk conglomerate said many of its systems were down. The Russian oil giant Rosneft was also hit, as was the British advertising and marketing multinational WPP. Norway’s National Security Authority said an “international company” there was affected.

Ukraine first reported the cyberattacks, saying they targeted government ministries, banks, utilities and other important infrastructure and companies nationwide, airport departure tables and demanding ransoms from government employees in the cryptocurrency bitcoin. By midafternoon, breaches had been reported at computers governing the municipal energy company and airport in Ukraine’s capital, Kiev, the state telecommunications company Ukrtelecom, the Ukrainian postal service and the State Savings Bank of Ukraine. Payment systems at grocery stores were knocked offline, as well as the turnstile system in the Kyiv metro.

The Broadcasting Board of Governors 2016 Annual Report details the agency’s activities and growing impact around the world. As detailed in the report, the BBG networks have played a critical role in supporting the pursuit of freedom and democracy, providing balanced election coverage for voters in emerging and fragile democracies; life-saving information to the hundreds of thousands of people trying to flee oppression, war and economic strife; and clear, unbiased and uncensored news to people living under authoritarian regimes and violent extremists. BBG networks are news leaders, covering stories left untold in environments that lack press freedom and fostering civil dialogue in places overwhelmed with disinformation. They are leading channels for information about the United States as well as independent platforms for freedom of expression and a free press.

The European Commission has hit Google with a €2.42 billion (approximately $2.73 billion) antitrust fine for abusing its dominance in search, a decision with potentially far-reaching implications for both the tech sector and already strained transatlantic relations.

The European Commission ended its seven-year competition investigation, concluding that the search group had abused its near-monopoly in online search to “give illegal advantage” to its own shopping service. Margrethe Vestager, the EU’s competition commissioner, said Google “denied other companies the chance to compete” and left consumers without “genuine choice”. “Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results and demoting those of competitors. What Google has done is illegal under EU antitrust rules.” The company has 90 days to make changes and must “refrain from any measure that has the same or an equivalent object or effect”, the commission said.

Businesses leaders expressed surprise that the Department of Justice is appealing a case about when law enforcement should have access to data stored in other countries. The case pits the DOJ against Microsoft over an issue both sides have indicated requires a legislative fix: whether or not a domestic warrant can require a company to retrieve data stored on a foreign server.

Both chambers of Congress had taken up the issue with hearings involving the DOJ, industry and other stakeholders, and both chambers had expressed a sense of urgency to resolve the conflict. The DOJ filed paperwork for the appeal on June 23. The government is appealing lower court rulings that law enforcement cannot obtain data stored in a foreign nation with a warrant. Rather, the ruling says law enforcement needs to follow the foreign nation's policies for searching and seizing evidence. This has long been the case with physical evidence and the United States has several treaties known as Mutual Legal Assistance Treaties (MLATs) to provide a diplomatic apparatus to request evidence be retrieved and sent stateside.

Brussels plans to hit Google with a fine of more than $1.2 billion for abusing its dominance in search, a decision that is likely to inflame already strained transatlantic relations. European Union antitrust officials have formally recommended that the search giant be found in breach of competition regulations for using its near-monopoly in online search to steer customers unfairly to its own Google Shopping service. The final decision is expected to be made on June 28 by the EU college of commissioners, the collective decision-making body, apparently. The decision relates to one of three competition claims against the company being investigated by EU authorities and would be the first sanction by a leading competition regulator on the way Google operates.