Search Battle Lynxotic Predicted is about to Breakout Big time
In a year that has already offered AppleOne, 5G, and perpetual AirTag teases, Apple Inc might have yet another major project hidden up its sleeve. According to a report from the Financial Times, the tech company has recently partaken in research and development indicative of creating a new original search engine.
For years, Google has been the default search engine on Apple devices. This is part of an ongoing deal between the two companies where Google pays Apple a pretty penny to foreground their services. Now, however, Google is facing an antitrust suit from the Department of Justice. This case claims that Google has a monopoly over search and directly sites its relationship with Apple as evidence.
If the DOJ manages to win against Google, it could be the end of its search engine arriving pre-encrypted in all iPhones, iPads, and Macs. Thus, an in-house Apple search engine comes at an opportune time. Not only will it provide Apple with a new default search platform, but it will also muster some competition against Google— one of the things that the antitrust case desperately calls for.
Any Engine at All by Apple is Earth-shattering to the Status Quo of Big Tech
Nothing is set in concrete about this speculative Apple search engine yet. All we know for sure is that the latest version of iOS 14 shows signs of increased search technology. Under the upgraded operating system, iPhone users can type in questions directly on their devices’ home screens and arrive at Internet results without any middleman. This has also led to an uptick in Apple’s spidering tools, which comb and datafy the web for a smoother search experience.
These changes in iOS 14 are subtle, but given the context, they could be laying the seeds for something much larger. Tellingly, former Google head of search John Geannandrea also oversees these recent Apple advancements. Geannandrea joined Apple three years ago, and while his main focus at the company has been Siri thus far, he obviously has the expertise and experience for helming a Google-like project.
Some believe that Siri is the base of Apple’s increased search interests. Perhaps the new technologies are simply working to refine the voice assistant rather than setting up a wholly alternative Google competitor. At the same time, though, with the proper expansion, Siri could very well evolve into a worthy Google rival, especially if it becomes the one-stop search engine on all Apple devices.For now, users will just have to wait while events unfold. Experts say that the antitrust case against Google will go on for years, and if Apple is indeed developing its own search engine alternative, it will likely take just as long.
Internet giants finally receiving long overdue legal scrutiny
After months of investigation and inquiry, the United States’ Justice Department has formally accused Google of illegally sustaining a monopoly over search and search advertising in America. The Department filed the lawsuit on October 20th in the U.S. District Court, beginning what could be a turning point in the Internet economy.
Republicans and Democrats alike have been watching big tech companies for a while now, scrutinizing the big four—Google, Apple, Facebook, and Amazon – as they’ve grown into corporate behemoths and played cat-and-mouse with American antitrust laws. Only now is the federal government (along with over forty states and jurisdictions that have investigated Google) finally making a move to attempt to keep these juggernauts in check.
Antitrust laws essentially make sure that American businesses cannot develop into illegal monopolies. Monopolies are illegal if they are established or maintained through improper conduct, sfor example, exclusionary or predatory acts.
Conventionally, the laws protect consumers from situations where a single company holds all of the supply. In the current digital age, though, most of these services are nominally free to consumers. Nevertheless, they can still become hegemonic at the expense of competition.
Because the site’s ascendency has left consumers with the impression that they are unaffected, superficially, Google personnel have long been able to refute the fact that they hold a proper monopoly. However, given that eighty percent of Internet searches go through Google, many politicians (and users) suspect something legally dubious at hand.
As is also the case with Amazon and Facebook there are, like an iceberg of crimes hiding beneath the waterline, these giant firms are engaged in many practices are highly anticompetitive. The behaviors, however rampant, have either gone unnoticed or, in a purported attempt to bolster internet commerce in a general way, have been intentionally overlooked by governing bodies for decades.
In order for the case to effectively convict Google on antitrust laws, the Justice Department must prove two things. First, that Google has dominance over search. Second, that it actively stifles competition in the search market through deals with other companies.
The fact that Google has dominance over search is quite hard to argue against nowadays. To sell the second part of the case, however, the DOJ will have to look into Google’s business behaviors and deals with other companies such as Apple.
Google essentially pays Apple up to $11 billion to be the default search engine on all iPhones, iPads, and Macs. This is just one example of Google buying its way to the top of the market and making sure that other search engines do not stand a chance.
Of course, Google denies doing anything illegal or sidestepping antitrust laws. The company argues that users actually retain choice when it comes to search engines, but people consistently go to Google for quality. As for the deals with companies like Apple, Google likens it to a cereal brand paying a grocery store for a better spot on the shelf. To Google, it’s simple business.
The courts, however, might not find it quite so simple, as many politicians are reframing antitrust laws in their perspective toward the case and the online marketplace.
This is not the end of the story but barely the beginning with many revelations yet to come
American antitrust laws, and how they are applied, are severely outdated. Most of them were written over a century ago when computers (let alone the Internet) were hardly a concept. Despite a few public outings where tech moguls have had to answer before Washington, the Federal government has not taken much action against these massive modern institutions. Exceptions include a 2001 antirust case against Microsoft for maintaining a monopoly over PC software and a former near-trial against Google when the Federal Trade Commission investigated the Alphabet Inc. for antitrust in the early 2010s.
Meanwhile, other countries have been far more active in holding big tech accountable. The European Union enforces much more timely antitrust policies, and has brought three cases against Google in recent years.
In America, however, Google has been riding off of the free market since its very conceptualization at Stanford University in 1998. The same could be said for Amazon, or Facebook and their respective, nearly mythic, ostensibly humble origins. While this nation’s laws and economy give companies the unique ability to grow, thrive, and expand into global phenomenon, they also have a duty to protect the people and even the playing field when those same companies abuse freedom or gain too much power.
This case will not be a short ride. It will likely take years, but such is the slow, magnificent, changing tide of justice and progress.
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Amazon finally Admits to Facilitating Safety Issues and Fakes in Online Product Listings
Chinese products listed on the e-commerce site have been known to present a multitude of issues for US sellers on the platform. Consumers are also put into potential risks whenever purchasing an item from overseas on Amazon’s site. Counterfeits, unsafe goods, and items that lack the necessary US FDA approval, despite including the logo, are among some of the problems that have frequently occurred.
On the U.S. site, Amazon doesn’t require a seller’s locations to be disclosed, which makes it harder for Chinese sellers to be held accountable when fake and unsafe goods are identified after shipping.
When consumers attempted to sue Amazon in court proceedings in the past, Amazon’s argument was that they held no burden on product liability, claiming that the items in question were neither manufactured nor sold directly by the company and that they merely allowed those items to be listed for sale.
An extremely dangerous case happened when a customer purchased a hoverboard on Amazon from a third party seller and the board exploded and resulted in the buyer’s house catching on fire and burning down. In that 2016 court proceeding, Amazon won the case and was not held responsible.
However, for the first time ever, Amazon is finally admitting that such risks actually exist. The 2018 Securities and Exchange Commission (SEC) file stated “Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies”
Whether Amazon can be held liable in court for damages that result from this passivity appears to be another story.
Mysterious Third-Party Chinese Vendors Lack Accountability on Amazon’s Seller Platform
Chinese sellers within the Amazon marketplace could represent a significant portion of the third-party sellers. Although Amazon does not publicly disclose any data of sellers’ location on the Amazon.com US site, according to Market Place Pulse, approximately 38% of the top sellers are based in China and 44% of China sellers were calculated among the 5 marketplaces (France, Germany, Italy, UK and Spain).
The majority of Chinese sellers, more than 79%, utilize Amazon Fulfillment (FBA) services that allow for customers to receive items quickly. This has resulted in US sellers struggling to compete in the market while also allowing customers to experience the same shipping experience regardless of the products’ origin.
Legitimate US Companies Can’t Compete with Rampant Flock of Fraudulent Chinese Vendors
This insurgence of sellers from China are affecting US sellers that have sold products imported from overseas because they are not able to provide competitive prices against Chinese suppliers that are now selling the same products on the site.
In an interview with the WSJ, a US based company that sells goose-feather duvets claims that they’ve struggled to compete with Chinese sellers that claim to sell the same quality goods but are counterfeits. This US company bought the Chinese “equivalent” and had the materials tested and found that they were duck feathers, instead of its proclaimed goose-feathers, and were being sold at a fraction of the price.
These deceptive listings not only hurt the customers that believe that they are purchasing one thing but actually receive another, but they are also killing a number of legitimate companies’ chances to make a living. The company brought the testing results to Amazon’s attention and the counterfeits were removed. However, the burden of responsibility in locating vendors that sell “fakes” should not be on the third party seller’s shoulders.
Consumers have also been deceived into thinking a product is great based on 5 star feedback when, in actuality, a string of companies have been proven to directly influence inauthentic reviews by bribing customers with gift cards in exchange for a high rating.
Most significant aspect is not the tiny fine, but the requirement that Amazon change it’s marketplace seller agreement on 7 of 11 practices that were deemed unfair
In a related development to our opinion piece published yesterday, the commercial court in Paris fined the giant US firm for clauses in it’s mandatory agreement for sellers that were found to be abusive and unfair.
In an exclusive story published (in French) by Next INpact the verdict was explained based on ongoing local coverage of the story.
In the article, which you can read in a google-generated translation provided below, it is noted that, similar to the US marketplace, in France approximately 60% of the income for Amazon’s online retail sales is generated by third-party sellers, using the Amazon Marketplace. Total sales are approximately 5 billion Euros per year.
Screen Shot of the Court Document (can be downloaded as PDF below
Of the 11 clauses that were scrutinized in the suit – 7 of them were deemed to be in violation of:
”Article L442-6 of the Commercial Code prohibits “to submit or attempt to subject a trading partner to obligations creating a significant imbalance in the rights and obligations of the parties”.
– Next Inpact reporting on the verdict in the commercial court of paris
Some examples of the offending clauses are summarized in the verdict, which will sound very familiar to US marketplace sellers:
“one of them allows Amazon to modify at any time, without notice, and in its absolute discretion the contract binding to sellers.
Result: either the seller resigns or he loses a significant share of turnover. A clause deemed “exorbitant of French law and contrary to all uses” concludes the decision.”
Nextinpact.com
“Another clause pinned, the one that allows Amazon to terminate a contract with immediate effect “for any reason and at any time by simple notification.
‘A contractual condition much too “general, discretionary and imprecise”, considers the court which notes the absence of notice and proportionality.”
“In the end, the court ruled that 7 of the 11 clauses pinned by Bercy were clearly unbalanced to the detriment of third-party sellers.“
nextinpact.com
With US anti-trust actions potentially moving forward at anytime, it is doubtful that this ruling, although representing little more than a “parking fine”, will be overlooked by prosecutors seeking to build a future case against the giant retailer.
As follows the full, rough, translation of the original article:
EXCLUSIVE.
The Paris Commercial Court sentenced Amazon to a fine of 4 million euros. The platform is also obliged to amend seven clauses under penalty. In question, the existence of a significant imbalance to the detriment of third-party sellers passing through this marketplace. Next INpact releases the judgment of 2 September 2019. In 2015 and 2016, the Directorate-General for Competition, Consumption and Fraud Control launched several surveys of marketplaces accessible in France. The goal? Gauge this sector and update any anti-competitive or restrictive practices.
Three companies stand out, all related to Amazon: Amazon Payments Europe, Amazon Service Europe and Amazon France Services, respectively APE, ASE and AFS. In December 2017, Bercy revealed his procedure initiated before the Commercial Court in July 2017. The administration recalled the ban on restrictive practices. Article L442-6 of the Commercial Code prohibits “to submit or attempt to subject a trading partner to obligations creating a significant imbalance in the rights and obligations of the parties”.
It claimed for this purpose in particular a civil fine of 9.5 million euros. The importance of this amount is easily explained. The company generates in France a turnover of over 5 billion annually.
And more than the majority of sales (60%) are made by third-party sellers, those using its marketplace. During its investigation, the DGCCRF identified several clauses that constitute a significant imbalance. They relate to contracts linking third party vendors with Amazon.
The jurisdiction of the French courts
Over the 49 pages, only APE, which deals with the part “payment”, could finally be put out of cause, not the other two companies. In this respect, Amazon France Service has been considered as a commercial partner of ASE, associated in the development of marketplaces.
ASE has also tried another circumvention: to oppose to the court the clause that attributes jurisdiction to the Luxembourg courts, while ensuring that two thirds of its sellers would be installed abroad.
The blow of the sword touched the water: the provisions in question being police laws, they are not subject to contractual conditions.
A significant imbalance
In the body of the decision, three points were sought: the existence of an economic bid, obviously unbalanced contract clauses and finally a possible rebalancing for the benefit of sellers in the benefits of using this platform.
The criterion of the tender was retained without difficulty, by the combination of several ingredients. Vendors face non-negotiable clauses. Amazon enjoys an economic power without equivalent.
The site is even essential for small third-party sellers, boosted by the network effect (or snowball).
“Amazon is obviously one of the” superstars “of the Internet, which this network phenomenon explains the exponential growth.
11 clauses were identified by the Minister of the Economy in his procedure.
For example, one of them allows Amazon to modify at any time, without notice, and in its absolute discretion the contract binding to sellers. It is up to the seller to look for this information published in the conditions of the site.
Unhappy, he can still terminate the contract, “but then without having had time to find a substitute,” said the court.
Result: either the seller resigns or he loses a significant share of turnover. A clause deemed “exorbitant of French law and contrary to all uses” concludes the decision.
Amazon was unsuccessful in arguing that trading with 170,000 vendors was impossible in an automated process. What the court told him was that “the automated system, precisely because it is, would work just as well with notice.”
With a certain malice, he also recalls that billions of transactions are made every day and that Amazon is in perfect ability to send them a letter on the order, and another on the state of delivery.
discretionary clauses
Another clause pinned, the one that allows Amazon to terminate a contract with immediate effect “for any reason and at any time by simple notification.”
A contractual condition much too “general, discretionary and imprecise”, considers the court which notes the absence of notice and proportionality.
Similarly, Amazon offers the possibility of imposing limits on salespeople based on “performance factors” without explaining their scope and the consequences of non-compliance with the evaluation criteria.
Still in the same vein, the platform is sanctioned for having the freedom to prohibit or restrict access to the site “at its sole discretion”. According to Amazon, the idea is to fight against the sale of dangerous products.
Only problem, the consular judges have not found this clarification in the contract. Same fate for the part that authorizes ASE to refund a customer even in case of non-return of the product of the third-party seller.
An imbalance not compensated by the benefits removed
In a logic of “balance”, the court then examined whether the imbalance of most pinned clauses was not offset by a series of benefits for sellers:
consumer confidence for Amazon, tools sharpened to facilitate management commercial operations, in addition to the storage of products.
The judges mainly recalled that these different benefits are not offered, but have as counterpart “the level of the various commissions paid to ASE by the third vendors”.
And these different benefits also benefit ASE for its own products and attract more and more third party sellers.
“On the other hand,” he says, “some of the shortcomings, especially those relating to business performance indicators, are such as to allow Amazon Service Europe to use a stipulation to, after testing a new product on a market. launched by a third-party seller, favoring the sale of his own to determine that of the third-party seller after aligning his price “.
7 censored clauses, 4 million euros fine
In the end, the court ruled that 7 of the 11 clauses pinned by Bercy were clearly unbalanced to the detriment of third-party sellers.
Amazon will have to modify them. 3 will remain intact, and one has been modified during the procedure. Amazon will have to modify them within 6 months, on pain of 10,000 euros per day.
Rather than the 9.5 million euros defended by Bercy, the court has finally revised down the fine to 4 million euros, especially given the good faith of Amazon, and different “positive steps” since the opening of the procedure.
Note however that the DGCCRF had requested the parameters of the algorithm used, from the United States, to highlight the products in the “Buy Box” Amazon … In vain.
The court finally refused the publication on the grounds that the press release of Bercy dated December 18, 2017 had been very widely (disseminated) and that this judgment should suffer a similar fate.
