New Euro Android charges could be $40 per device

Google announced earlier this week that it was going to start charging Android smartphone makers for its apps but didn’t say how much.

Tech site The Verge, however, reckons it has got hold of some documents that detail the tariffs Google intends to impose on its blameless OEM partners to make sure it doesn’t lose a single euro of profit while it wrestles with the European Commission’s trust busters. According to this ‘confidential fee schedule’ Google could demand as much as $40 per device, it’s alleged.

But these monetary considerations could just end up being bargaining chips in a process through which Google forgoes the cash so long as OEMs play ball by preinstalling all the stuff it wants. In other words Google seems to be saying “We won’t insist our stuff is bundled with Android but we will fine anyone who doesn’t.”

In that context the actual amounts involved seem irrelevant, since Google may well write them off in exchange for docile compliance, but we’ve only done three paragraphs so we might as well have a look at how they will be calculated. Essentially OEMs will have to pay more for larger screens and for exporting to richer countries. So a top-end device into the UK could be stung for $40, while a rubbish phone into Greece might only cost an extra couple of bucks.

Google seems to be somewhat sulkily throwing down the gauntlet to the EC by saying “OK, two can play at that game – if you won’t let us bundle then we’ll punish OEMs. How do you like them apples?” The EC will presumably have a bit of a think about whether this new tactic still represents an abuse of Google’s market dominance and then act accordingly.

Google ups the ante with Europe by charging Android manufacturers for its mobile products

Under pressure to be seen to comply with an EU antitrust ruling, Google has indicated that the only way to do so is to start charging for what was previously given away.

Earlier this year Europe fined Google €4.3 billion for abusing its dominance in the smartphone OS market to force the bundling of its commercial products such as search onto every Android phone. The EC found this practice to be anticompetitive since it made it harder for any other apps to compete and this reduced consumer choice.

Accompanying its inevitable decision to appeal the fine, Google CEO Sundar Pichai insisted that the existence of Android has in fact led to more consumer choice, not less – an assertion proven by all the great Android devices you can buy. Regardless Google was given 90 days to comply with the ruling or face further fines, and we now know the nature of that compliance.

In a blog post Google VP of Platforms and Ecosystems Hiroshi Lockheimer detailed the concessions Google will be making in Europe while the appeals process is underway. In essence Google will now start charging any Android device OEM that ships into the EU for the use of its mobile apps. Furthermore it will charge separately for search and Chrome, since they’re the apps that seemed to upset the EC and, as a consequence, OEMs are free to muck about with Android itself if they want.

The justification given for this move is simple: Google needs to make up for the revenue it will lose by not being able to bundle its mobile apps with Android. “Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA. Android will remain free and open source,” said the blog.

An underlying strategy, however, may be to illustrate Google’s point about all the benefits consumers have derived from Android. By charging what it previously gave away for ‘free’ (while making loads of money via the traffic through its mobile apps, of course), Google is saying that the consequence of the EU’s ruling will be for everything to become more expensive.

This is ultimately a fight over Google’s underlying business model of given stuff away and then monetising its users. But the EC does have a point the use of a dominant position to stifle competition via forced bundling and, as the former head of Internet Explorer and Windows at Microsoft notes in the tweet below, has a strong tradition of challenging this sort of thing.

One final thing to consider against Google’s claim that, if it can’t insist all its other stuff comes bundled with Android, it has to seek direct compensation is the matter of China. Google apps have been unbundled from Android there for some time and Google doesn’t seem to be getting any compensation there. If it can do that in China, why can’t it do it elsewhere?

Europe approves merger of Tele2 and Com Hem, Kirkby will move to TDC

The merger of Swedish MNO Tele2 with Swedish cableco Com Hem has been approved but Tele2’s CEO Allison Kirkby isn’t hanging around.

Europe had a look at the merger, as it invariably does with any telecoms M&A on the continent, and concluded it raises no competition concerns. The resulting creation of a multiplay operator doesn’t take any players out of either the mobile or fixed markets and therefore there’s still enough competition to allow the EC to sleep soundly at night. It has also concluded a general investigation into the Swedish telecoms market with not further action required.

“We are nearing the closing of this merger and my ambition to create a leading integrated connectivity provider in the Baltic Sea region will soon be realized,” said Kirkby. “I am immensely proud of the Tele2 team’s efforts throughout this process, as well as our incredible achievements the past years.”

“I will leave a Tele2 that is stronger and better positioned to act as an integrated customer champion in an ever more digitalized world. Once the merger is closed, I feel confident that the Tele2 team, including its new colleagues from Com Hem, will continue to challenge the status quo and fearlessly liberate people to live a more connected life.”

Scandinavia seems to have left a strong impression on Kirkby, who has been poached by Danish telco TDC Group to be its new CEO. Right now TDC seems only to have made the announcement via a Danish press release, but we trust Google Translate enough to run with it. Kirkby will start her new gig in December, right after the merger closes.

The CEO of the merged company, which looks like it will be called Tele2, will be the current CEO of Com Hem, Anders Nilsson. “As one company, we will be able to offer a portfolio of truly integrated services, with significant benefits for Swedish individuals, households, businesses and our shareholders as a result,” he said.

“My main focus now is our preparations for a rapid and efficient integration, to the benefit of both our employees and customers. Together with the new Leadership Team, I will also make sure to draw from the strength, knowledge and spirit of both the Tele2 and Com Hem organizations, as well as the Tele2 Board of Directors. When closing comes, we will be ready to kick off the integration.”

The only other thing worth noting is that Kirkby had been one of the people thought likely to be in the running for the BT CEO job. The search continues.

Europe gets tech and ad giants to play ball on ‘online disinformation’

The European Commission’s drive to control what takes place online took one more step forward with the unveiling of a code of practice on online disinformation.

This code has apparently been signed up to by unnamed internet and advertising giants, but in its current form it appears to be nothing more than a set of vague aspirations designed to placate the EC for now. However it will probably be used as the thin end of the wedge to extract further concessions down the line.

It is an important step in tackling a problem which has become increasingly pervasive and threatens Europeans’ trust in democratic processes and institutions,” said Commissioner for Digital Economy and Society Mariya Gabriel. “This is the first time that the industry has agreed on a set of self-regulatory standards to fight disinformation worldwide, on a voluntary basis.

“The industry is committing to a wide range of actions, from transparency in political advertising to the closure of fake accounts and demonetisation of purveyors of disinformation, and we welcome this. These actions should contribute to a fast and measurable reduction of online disinformation. To this end, the Commission will pay particular attention to its effective implementation.”

Voluntary. That’s a good one. You can find out more about this voluntary code on this European Commission site. Disinformation is defined as ‘verifiably false or misleading information’. One good example of this could be describing something as ‘voluntary’ when in fact it was subject to duress. The EC and signatories will presumably argue the toss over what qualifies as ‘misleading’ for a while before everyone moves on.

Europe approves tough new digital copyright position

The European Parliament has voted to adopt a position on copyright rules that opponents inevitably fear will break the internet.

This is an incremental, but significant step towards Europe implementing laws that will impose new conditions on internet companies to compensate rights holders when they share their copyrighted material. The position was initially rejected back in July but in true EU style they decided to keep voting on it again until it went the right way.

“I am very glad that despite the very strong lobbying campaign by the internet giants, there is now a majority in the full house backing the need to protect the principle of fair pay for European creatives,” said Eurocrat Axel Voss.

“There has been much heated debate around this directive and I believe that Parliament has listened carefully to the concerns raised. Thus, we have addressed concerns raised about innovation by excluding small and micro platforms or aggregators from the scope.

“I am convinced that once the dust has settled, the internet will be as free as it is today, creators and journalists will be earning a fairer share of the revenues generated by their works, and we will be wondering what all the fuss was about.”

“Discussions between the co-legislators can now start on a legislative proposal which is a key element of the Digital Single Market strategy and one of the priorities for the European Commission,” said Eurocrats Andrus Ansip and Mariya Gabriel in a joint statement.

“Our aim for this reform is to bring tangible benefits for EU citizens, researchers, educators, writers, artists, press and cultural heritage institutions and to open up the potential for more creativity and content by clarifying the rules and making them fit for the digital world. At the same time, we aim to safeguard free speech and ensure that online platforms – including 7,000 European online platforms – can develop new and innovative offers and business models.

“The Commission stands ready to start working with the European Parliament and the Council of the EU, so that the directive can be approved as soon as possible, ideally by the end of 2018. We are fully committed to working with the co-legislators in order to achieve a balanced and positive outcome enabling a true modernisation of the copyright legislation that Europe needs.”

The usual suspects are appalled at this development with the saveyourinternet.eu site featuring the following statement: “The European Parliament blatantly disregarded your thousands of emails, calls and messages and adopted a horrible version of Article 13 on 12 September. But the battle against Article 13 isn’t over: we must now ask the EU governments to stand up for our rights!”

At its core this seems to be about sharing stuff on the internet and to what extent the owner of the stuff being shared should get some kind of royalty payment every time it’s done. On one hand the internet has wrecked industries like music and journalism by making it so difficult for them to charge people for consuming their products, but on the other the genie is out of the bottle and such sharing is endemic. Either way this debate seems likely to rage for some time yet.

EU set to impose tough new rules on social media companies

The European Commission is reportedly planning to bring in new laws that will punish social media companies if they don’t remove terrorist content within an hour of it being flagged.

The news comes courtesy of the FT, which spoke to the EU commissioner for security, Julian King, on the matter of terrorists spreading their message over social media. “We cannot afford to relax or become complacent in the face of such a shadowy and destructive phenomenon,” he said, after reflecting that he doesn’t think enough progress had been made in this area.

Earlier this year the EU took the somewhat self-contradictory step of imposing some voluntary guidelines on social media companies to take down material that promotes terrorism within an hour of it being flagged. In hindsight that move seems to have been made in order to lay the ground for full legislation, with Europe now being able to claim its hand has been reluctantly forced by the failure of social media companies to do the job themselves.

So long as the legal stipulation if for content to be taken down when explicitly flagged as terrorist by police authorities it should be pretty easy to enforce – indeed it could probably be automated. But legislation such as this does pose broader questions around censorship. How is ‘terrorist’ defined? Will there be a right of appeal? Will other organisations be given the power to demand content be taken down? Will this law be extended to other types of contentious content?

At the end of the FT piece it is noted that, while the EU still allows self-regulation on more subjective areas like ‘hate speech’ and ‘fake news’, Germany is a lot more authoritarian on the matter. Given the considerable influence Germany has over the European bureaucracy it’s not unreasonable to anticipate a time when the EU follows Germany’s lead on this matter.

Meanwhile US President Donald Trump – avid user of Twitter but loather of much of the mainstream media – got involved in the social media censorship debate via his favoured medium. You can see the tweets in question below and, while he appears to be motivated by concern that his own supporters are being selectively censored, his broader point is that censorship is bad, full stop.

Lastly Twitter CEO Jack Dorsey continues to publicly agonise about the topic of censorship and specifically how, if at all, he should apply it to his own platform. In an interview with CNN he conceded Twitter as a company has a left-leaning bias, but stressed the platform is policed according to user behaviour rather than perceived ideology. He also noted that transparency is the only answer to allegations of bias.

Europe might force Apple to ditch Lightning Cable

A leaked email suggests the European Commission will revive efforts forcing manufacturers to standardize smartphone chargers, after previous commitments were simply disregarded.

Back in 2009, 14 smartphone manufacturers signed a memorandum of understanding (MoU) committing themselves to switch to a common charging port for handsets released from 2011. The deadline passed, and while similar letters of intent emerged in 2013 and 2014, the frustration of iPhones and Androids having different chargers continues to plague the digital society. According to Reuters, EU competition chief Margrethe Vestager is sick of the situation.

“Given the unsatisfactory progress with this voluntary approach, the Commission will shortly launch an impact assessment study to evaluate costs and benefits of different other options,” the leaked email states.

As the vast majority of devices now use micro USB-B or USB-C for some newer devices, the gripe does seem to be directed at Apple. It is hardly an unusual situation that the iLeader walks to the beat of its own drum, though now it does seem Europe has had enough. It will likely take years to rollout across devices, but the Commission might well force Apple’s hand.

Apple is a stubborn company, and while this posturing from the European Commission might be a worry, nothing is likely to change in the immediate future. An impact assessment will take months, and there is bound to be some resistance to the idea as Apple kicks up a fuss.

That said, iLifers will welcome the idea as the first world frustrations of having no battery is a daunting prospect.

Europe hits Google with €4.3bn fine for Android antitrust violations

Google has been handed a record €4.3 billion by the European Commission, with the bureaucrats claiming the search giant abused the dominant position of Android to bully consumers into using its search engine.

The European Commission, hereafter known as the Gaggle of Red-tapers, has given Google 90 days to end the activities, or face non-compliance payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company. Google has been bundling its search engine and Chrome apps into the operating system, with the Gaggle also claiming it blocked manufacturers from creating devices that run forked versions of Android, and also making payments to manufacturers and telcos to ensure exclusivity on devices.

“Today, mobile internet makes up more than half of global internet traffic,” said Chief Competition Gaggler, Commissioner Margrethe Vestager. “It has changed the lives of millions of Europeans.

“Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”

The three issues here are as follows:

  • Manufacturers are required to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google’s app store, which manufacturers confirmed was a ‘must have’ feature as part of the investigation
  • Payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices
  • Prevented manufacturers wishing to pre-install Google apps from selling devices running on alternative versions of Android that were not approved by Google, known as Android Forks

EC Google antitrust diagram

Google will of course appeal the fine, and will likely use its own legal might to tie the Gaggle up in more red-tape than the boresome bureaucrats ever thought possible, but this is a notable decision. Not only has the European Commission come to the conclusion Android has a dominant position in the European market, some 80% of smartphone run on the OS, but it has determined Google actively sought to inhibit competition, and therefore negatively impact the experience and choice of the consumer.

One of the conclusions Google has found issue with is the competition between Android and Apple’s iOS. The Gaggle has decided the two are not competing with each other, due to the fact Apple devices are not tailored towards the low-end of the market, therefore Android maintains a monopoly over poorer demographics and regions. The Gaggle also notes there is a ‘cost’ to switching to iOS, including loss of data, contacts, and having to learn how to use a new OS, which counts against the search giant. Google disagrees with this point, even quoting the Gaggle’s own research that suggests 89% of respondents believe the two OS’ compete.

Another important aspect to note is the openness of Android. This is an additional bugbear of the Gaggle, pointing towards the limited opensource nature of the OS as a negative, though Google contends this point. Should Android be make more open to developers and users, the fragmentation in the ecosystem could be boggling. Google argue it needs to maintain control to ensure consistency and experience. This argument is less clear cut, as there are positives and negative outcomes on both sides.

“To be successful, open-source platforms have to painstakingly balance the needs of everyone that uses them. History shows that without rules around baseline compatibility, open-source platforms fragment, which hurts users, developers and phone makers,” Google CEO Sundar Pichai said in a blog post. “Android’s compatibility rules avoid this, and help make it an attractive long-term proposition for everyone.”

Overall, this is of course not a new argument. The European Commission found fault with Microsoft bundling Internet Explorer with its Window OS in years gone, while Google has constantly been under the microscope in Belgium. The Gaggle does not seem comfortable with the idea of relaying revenues to other aspects of the ecosystem, a business model which is becoming more common in the digital era.

For a service to be free, there has to be a value exchange. As it stands, device manufacturers get an Android licence for free under the condition Google products are set as default. Google spends an unknown amount every year to ensure Android is the best OS on the market, and monetizes the experience through its search engine. Should it be proven Google is operating illegally, the practise should be adjusted, but we would argue there would be detrimental impact to the consumer should it be stopped completely.

The only other alternative is to charge the device manufacturers for the right to use Android. We suspect this will never happen, but we have no doubt this expense would be passed onto the consumer, who will probably end up using Google anyway as the search engine is arguably the best on the market.

The payments to manufacturers and telcos is not the most above-board business we’ve ever come across, and perhaps preventing the development of Forks is suspect, though this point is much more nuanced; Google is rightly claiming fragmentation of the OS and applications would impact experience. That said, we don’t have too much of an issue with the conditional bundling of other services with the Play Store and Android OS; Google has to make money after all; it doesn’t offer software as a charity.

The European Commission will continue to argue the dominant position of Google will impact innovation, though the Google party line can be summed up pretty simply; its helping develop the ecosystem:

“The free distribution of the Android platform, and of Google’s suite of applications, is not only efficient for phone makers and operators – it’s of huge benefit for developers and consumers,” said Pichai. “If phone makers and mobile network operators couldn’t include our apps on their wide range of devices, it would upset the balance of the Android ecosystem. So far, the Android business model has meant that we haven’t had to charge phone makers for our technology, or depend on a tightly controlled distribution model.”

The outcome of this saga is unlikely to be known for months. Google’s lawyers will do everything possible to complicate the situation, lobbyists will be charged and the PR machine will start cranking, but there is the potential to have a very fundamental impact on the industry. Will Google bow to demands and lose its grip on search? Could it start charging a license fee Android? Or might it just say screw everyone else and keep Android exclusively for its own Pixel devices in Apple-esque style?

Europe steps up focus on regulating AI

The European Commission has launched a new group to support the implementation of the European strategy on artificial intelligence, including contributions to policy development and socio-economic challenges.

The group, which will have 52 members from academia, civil society, as well as industry, will aim to guide the technology world towards a responsible, ethical and profitable rollout of AI, an important pillar in the European efforts to remain relevant in the digital economy of tomorrow.

“Artificial intelligence brings huge potential benefits, but also challenges, and therefore it is essential to involve all actors, including from academia, business, and civil society,” said Commissioner for Digital Economy and Society Mariya Gabriel. “I am confident that, together, we will ensure that AI systems are developed for good and for all, respecting our values and fundamental rights.”

Meeting for the first time on June 27, the group will be headed up by Pekka Ala-Pietilä, Chairman of the Board of packaging company Huhtamaki, media company Sanoma and Netcompany as well as a member of the Supervisory Board of SAP, featuring representatives from various universities and technology heavyweights such as Google, SAP and IBM. The breadth of experience does look suitably comprehensive, though we do worry there is not enough of a presence from the private sector.

In the group, there are 15 representatives from universities, seven consultants or independent experts, eight from associations and five from the government or regulatory space. On the practical side of society, there are seven representatives from enterprise, seven from the technology world and two telcos and Nokia. We feel this is not a helpful representation of the industry, and perhaps more practical aspects of the business world will not be well enough represented.

Another worrying thing about the list is the number of absentees. Amazon, Microsoft and Facebook have not made the cut, while there are zero representatives from Asian companies. Admittedly the work needs to focus on Europe, therefore US and Asian interests will be less of a concern, but companies from these regions will have a much more significant impact on the development of the technology than the vast majority of the people currently in the group. If Europe is going to effectively manage AI, it needs to engage the people who are going to influence the technology.

The European Commission should be applauded in attempting to take a proactive stance on the management and rollout of a critically important, and potentially very dangerous, technology, but we are slightly concerned about the input here.

Europe updates its telecoms rules, GSMA moans

The Eurocracy has updated the European Electronic Communications Code but telecoms trade association GSMA thinks it doesn’t go far enough.

For some reason the EU press release saw fit to tell us “The European Parliament and the Council reached late last night a political agreement to update the EU’s telecoms rules.” They clearly want everyone to know how hard they’re working, not that that’s ever in any doubt, surely.

“This agreement is essential to meet Europeans’ growing connectivity needs and boost Europe’s competitiveness,” said Vice-President in charge of the Digital Single Market, Andrus Ansip, bravely refusing to succumb to exhaustion. “We are laying the groundwork for the deployment of 5G across Europe.”

“The new telecoms rules are an essential building block for Europe’s digital future,” said Commissioner for Digital Economy and Society, Mariya Gabriel, who presumably staggered over the finishing line with Ansip. “After several months of tough negotiations, we have agreed on bold and balanced rules to provide faster access to radio spectrum, better services and more protection for consumers, as well as greater investment in very high speed networks.”

Here’s what they managed to thrash out in the small hours of the morning, with only vintage Bordeaux to lift their spirits:

  • Ensure the availability of 5G spectrum
  • Facilitate high capacity fixed networks
  • Yet more regulations to ‘benefit and protect consumers’

But the GSMA seems ungrateful to the point of cruelty about this Herculean effort. “As shown in the past, Europe has the ability to overcome difficult decisions and ensure a more solid and scalable EU market,” said Afke Schaart, VP and Head of Europe at the GSMA. “We are disappointed that this crucial opportunity – for citizens as well as for the 5G industry – was not fully grasped, and strongly believe in the need of a better deal for Europe’s global digital competitiveness.”

Here are the specific holes Schaart picked in Europe’s endeavours:

  • Still too much investment uncertainty
  • Not enough spectrum harmonization across member states
  • Too much regulation of telcos in general, made worse by fresh retail price restrictions

There is a distinct sense of déjà vu to all this. Trade bodies and individual companies have been clamouring for more help for the European telecoms sector from the EU for ages, but the EU seems more concerned with consumer virtue-signalling. We do have some sympathy for the GSMA’s position as other parts of the world seem to be empowering their telcos just as Europe seeks to restrict its own.