Antitrust law

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DOJ subpoenas Nvidia in deepening AI antitrust probe, report says

AI chips, antitrust, Antitrust law, Artificial Intelligence, competition law, GPUs, Jensen Huang, monopoly, NVIDIA, Policy, run:ai / /
DOJ subpoenas Nvidia in deepening AI antitrust probe, report says

The Department of Justice is reportedly deepening its probe into Nvidia. Officials have moved on from merely questioning competitors to subpoenaing Nvidia and other tech companies for evidence that could substantiate allegations that Nvidia is abusing its “dominant position in AI computing,” Bloomberg reported.

When news of the DOJ’s probe into the trillion-dollar company was first reported in June, Fast Company reported that scrutiny was intensifying merely because Nvidia was estimated to control “as much as 90 percent of the market for chips” capable of powering AI models. Experts told Fast Company that the DOJ probe might even be good for Nvidia’s business, noting that the market barely moved when the probe was first announced.

But the market’s confidence seemed to be shaken a little more on Tuesday, when Nvidia lost a “record-setting $279 billion” in market value following Bloomberg’s report. Nvidia’s losses became “the biggest single-day market-cap decline on record,” TheStreet reported.

People close to the DOJ’s investigation told Bloomberg that the DOJ’s “legally binding requests” require competitors “to provide information” on Nvidia’s suspected anticompetitive behaviors as a “dominant provider of AI processors.”

One concern is that Nvidia may be giving “preferential supply and pricing to customers who use its technology exclusively or buy its complete systems,” sources told Bloomberg. The DOJ is also reportedly probing Nvidia’s acquisition of RunAI—suspecting the deal may lock RunAI customers into using Nvidia chips.

Bloomberg’s report builds on a report last month from The Information that said that Advanced Micro Devices Inc. (AMD) and other Nvidia rivals were questioned by the DOJ—as well as third parties who could shed light on whether Nvidia potentially abused its market dominance in AI chips to pressure customers into buying more products.

According to Bloomberg’s sources, the DOJ is worried that “Nvidia is making it harder to switch to other suppliers and penalizes buyers that don’t exclusively use its artificial intelligence chips.”

In a statement to Bloomberg, Nvidia insisted that “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” Additionally, Bloomberg noted that following a chip shortage in 2022, Nvidia CEO Jensen Huang has said that his company strives to prevent stockpiling of Nvidia’s coveted AI chips by prioritizing customers “who can make use of his products in ready-to-go data centers.”

Potential threats to Nvidia’s dominance

Despite the slump in shares, Nvidia’s market dominance seems unlikely to wane any time soon after its stock more than doubled this year. In an SEC filing this year, Nvidia bragged that its “accelerated computing ecosystem is bringing AI to every enterprise” with an “ecosystem” spanning “nearly 5 million developers and 40,000 companies.” Nvidia specifically highlighted that “more than 1,600 generative AI companies are building on Nvidia,” and according to Bloomberg, Nvidia will close out 2024 with more profits than the total sales of its closest competitor, AMD.

After the DOJ’s most recent big win, which successfully proved that Google has a monopoly on search, the DOJ appears intent on getting ahead of any tech companies’ ambitions to seize monopoly power and essentially become the Google of the AI industry. In June, DOJ antitrust chief Jonathan Kanter confirmed to the Financial Times that the DOJ is examining “monopoly choke points and the competitive landscape” in AI beyond just scrutinizing Nvidia.

According to Kanter, the DOJ is scrutinizing all aspects of the AI industry—”everything from computing power and the data used to train large language models, to cloud service providers, engineering talent and access to essential hardware such as graphics processing unit chips.” But in particular, the DOJ appears concerned that GPUs like Nvidia’s advanced AI chips remain a “scarce resource.” Kanter told the Financial Times that an “intervention” in “real time” to block a potential monopoly could be “the most meaningful intervention” and the least “invasive” as the AI industry grows.

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All the possible ways to destroy Google’s monopoly in search

android, antitrust, Antitrust law, Apple, Bing, chrome, department of justice, duckduckgo, Features, Google, google monopoly, microsoft, mozilla, online search, online search industry, Policy, samsung / /
All the possible ways to destroy Google’s monopoly in search

Aurich Lawson

After US District Judge Amit Mehta ruled that Google has a monopoly in two markets—general search services and general text advertising—everybody is wondering how Google might be forced to change its search business.

Specifically, the judge ruled that Google’s exclusive deals with browser and device developers secured Google’s monopoly. These so-called default agreements funneled the majority of online searches to Google search engine result pages (SERPs), where results could be found among text ads that have long generated the bulk of Google’s revenue.

At trial, Mehta’s ruling noted, it was estimated that if Google lost its most important default deal with Apple, Google “would lose around 65 percent of its revenue, even assuming that it could retain some users without the Safari default.”

Experts told Ars that disrupting these default deals is the most obvious remedy that the US Department of Justice will seek to restore competition in online search. Other remedies that may be sought range from least painful for Google (mandating choice screens in browsers and devices) to most painful (requiring Google to divest from either Chrome or Android, where it was found to be self-preferencing).

But the remedies phase of litigation may have to wait until after Google’s appeal, which experts said could take years to litigate before any remedies are ever proposed in court. Whether Google could be successful in appealing the ruling is currently being debated, with anti-monopoly advocates backing Mehta’s ruling as “rock solid” and critics suggesting that the ruling’s fresh takes on antitrust law are open to attack.

Google declined Ars’ request to comment on appropriate remedies or its plan to appeal.

Previously, Google’s president of global affairs, Kent Walker, confirmed in a statement that the tech giant would be appealing the ruling because the court found that “Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search,’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.'”

“Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal,” Walker said. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”

But Mehta found that Google was wielding its outsize influence in the search industry to block rivals from competing by locking browsers and devices into agreements ensuring that all searches went to Google SERPs. None of the pro-competitive benefits that Google claimed justified the exclusive deals persuaded Mehta, who ruled that “importantly,” Google “exercised its monopoly power by charging supra-competitive prices for general search text ads”—and thus earned “monopoly profits.”

While experts think the appeal process will delay litigation on remedies, Google seems to think that Mehta may rule on potential remedies before Google can proceed with its appeal. Walker told Google employees that a ruling on remedies may arrive in the next few months, The Wall Street Journal reported. Ars will continue monitoring for updates on this timeline.

As the DOJ’s case against Google’s search business has dragged on, reports have long suggested that a loss for Google could change the way that nearly the entire world searches the Internet.

Adam Epstein—the president and co-CEO of adMarketplace, which bills itself as “the largest consumer search technology company outside of Google and Bing”—told Ars that innovations in search could result in a broader landscape of more dynamic search experiences that draw from sources beyond Google and allow searchers to skip Google’s SERPs entirely. If that happens, the coming years could make Google’s ubiquitous search experience today a distant memory.

“By the end of this decade, going to a search engine results page will seem quaint,” Epstein predicted. “The court’s decision sets the stage for a remedy that will dramatically improve the search experience for everyone connected to the web. The era of innovation in search is just around the corner.”

The DOJ has not meaningfully discussed potential remedies it will seek, but Jonathan Kanter, assistant attorney general of the Justice Department’s antitrust division, celebrated the ruling.

“This landmark decision holds Google accountable,” Kanter said. “It paves the path for innovation for generations to come and protects access to information for all Americans.”

All the possible ways to destroy Google’s monopoly in search Read More »

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Google loses DOJ’s big monopoly trial over search business

Antitrust law, department of justice, Google, google monopoly trial, google search, Policy / /

Huge loss for Google —

Google’s exclusive deals maintained monopolies in two markets, judge ruled.

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Google loses DOJ’s big monopoly trial over search business

Google just lost a massive antitrust trial over its sprawling search business, as US district judge Amit Mehta released his ruling, showing that he sided with the US Department of Justice in the case that could disrupt how billions of people search the web.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his opinion. “It has violated Section 2 of the Sherman Act.”

The verdict will likely come as a shock to Google, which had long argued that punishing Google for being the best in search would be “unprecedented” and frequently pointed to the DOJ’s lack of direct evidence. However, Mehta found the limited direct evidence compelling, especially “Google’s admission that it does not ‘consider whether users will go to other specific search providers (general or otherwise) if it introduces a change to its Search product.'”

“Google’s indifference is unsurprising,” Mehta wrote. “In 2020, Google conducted a quality degradation study, which showed that it would not lose search revenue if were to significantly reduce the quality of its search product. Just as the power to raise price ‘when it is desired to do so’ is proof of monopoly power, so too is the ability to degrade product quality without concern of losing consumers.”

He also wrote that the DOJ’s indirect evidence “easily establishes Google’s monopoly power in search” and concluded that “the fact that Google makes product changes without concern that its users might go elsewhere is something only a firm with monopoly power could do.”

Google didn’t lose every battle in this big fight with the DOJ. Mehta ruled that Google did not have monopoly power in search advertising, agreed that there was no market for general search advertising, and declined to sanction Google for allegedly destroying evidence by “failing to preserve its employees’ chat messages.”

Google’s president of global affairs, Kent Walker, provided a statement to Ars, confirming that Google plans to appeal.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Walker said. “We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search,’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.’ Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use.”

Google monopolizes two markets, judge ruled

Mehta ruled that Google spending billions on exclusive distribution agreements with companies like Apple helped the tech giant maintain monopolies in two markets, general search services and general text advertising.

The US government had argued that Google used these exclusive deals to block out competitors like Bing or DuckDuckGo, “by ensuring that all of Android and Apple and mobile users are offered Google, either as the default general search engine or the only general search engine, Google’s deals with Android and Apple clearly have a significant effect in preserving its monopoly.” The DOJ successfully argued that blocks rivals from reaching the “critical level necessary” to “pose a real threat to Google’s monopoly.”

Mehta noted that Google’s dominance had “gone unchallenged for well over a decade,” partly due to a “largely unseen advantage over its rivals: default distribution.” He found that Google’s exclusive distribution deals foreclosed a “substantial share” of the markets and allowed Google to earn more revenues. Google then shared spiking revenues with device and browser developers—spending up to $26 billion in 2021 alone for exclusive deals, the trial revealed.

Google did all this, Mehta said, to ensure that “most devices in the United States come preloaded exclusively with Google” and to force “Google’s rivals to find other ways to reach users.” The DOJ successfully argued that this posed “significant barriers that protect Google’s market dominance in general search,” with rivals having to overcome “high capital costs—”to the tune of billions of dollars,” Mehta wrote—”Google’s control of key distribution channels, brand recognition, and scale.”

Barriers to entry in general text advertising are similarly “high,” Mehta said, with new entrants facing “the same major obstacles as would the developer of a new” search engine.

One of the most scrutinized exclusive deals was between Google and Apple, which was estimated at $20 billion in 2022. “This is nearly double the payment made in 2020,” Mehta noted, suggesting that Google increasingly valued the deal locking its search engine as the default in Safari as a way to shore up its search dominance.

“Google has long recognized that, if Apple were to develop and deploy its own search engine as the default” search tool “in Safari, it would come at great cost to Google,” Mehta wrote. Without the deal, Google “would lose around 65 percent of its revenue, even assuming that it could retain some users without the Safari default” placement. But “Apple has decided not to enter general search,” Mehta said, likely because it “would forego significant revenues” and potentially face user backlash if it stopped partnering with Google. Similarly high revenue loss would occur if “Google were to lose the Android defaults,” Mehta said.

None of the pro-competitive benefits that Google claimed justified the exclusive deals persuaded Mehta, who ruled that “importantly,” Google “exercised its monopoly power by charging supracompetitive prices for general search text ads”—and thus earned “monopoly profits.”

“That Google makes changes to its text ads auctions without considering its rivals’ prices is something that only a firm with monopoly power is able to do,” Mehta wrote. And “Google in fact has profitably raised prices substantially above the competitive level. That makes ‘the existence of monopoly power” “clear.”

Ultimately, Mehta ruled that “Google has no true competitor” in general search and without any “genuine” competition, “over the last decade, Google’s grip on the market has only grown stronger.” Further, he found that “Google understands there is no genuine competition for the defaults because it knows that its partners cannot afford to go elsewhere,” disagreeing with Google’s arguments that the default deals were not exclusive.

“The key question then is this: Do Google’s exclusive distribution contracts reasonably appear capable of significantly contributing to maintaining Google’s monopoly power in the general search services market?” Mehta wrote. “The answer is ‘yes.'”

This is a developing story and is being updated.

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AI’s future in grave danger from Nvidia’s chokehold on chips, groups warn

AI chips, ai industry, Antitrust law, Artificial Intelligence, department of justice, intel, Jensen Huang, monopoly, NVIDIA, Policy / /

Controlling “the world’s computing destiny” —

Anti-monopoly groups want DOJ to probe Nvidia’s AI chip bundling, alleged price-fixing.

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AI’s future in grave danger from Nvidia’s chokehold on chips, groups warn

Sen. Elizabeth Warren (D-Mass.) has joined progressive groups—including Demand Progress, Open Markets Institute, and the Tech Oversight Project—pressuring the US Department of Justice to investigate Nvidia’s dominance in the AI chip market due to alleged antitrust concerns, Reuters reported.

In a letter to the DOJ’s chief antitrust enforcer, Jonathan Kanter, groups demanding more Big Tech oversight raised alarms that Nvidia’s top rivals apparently “are struggling to gain traction” because “Nvidia’s near-absolute dominance of the market is difficult to counter” and “funders are wary of backing its rivals.”

Nvidia is currently “the world’s most valuable public company,” their letter said, worth more than $3 trillion after taking near-total control of the high-performance AI chip market. Particularly “astonishing,” the letter said, was Nvidia’s dominance in the market for GPU accelerator chips, which are at the heart of today’s leading AI. Groups urged Kanter to probe Nvidia’s business practices to ensure that rivals aren’t permanently blocked from competing.

According to the advocacy groups that strongly oppose Big Tech monopolies, Nvidia “now holds an 80 percent overall global market share in GPU chips and a 98 percent share in the data center market.” This “puts it in a position to crowd out competitors and set global pricing and the terms of trade,” the letter warned.

Earlier this year, inside sources reported that the DOJ and the Federal Trade Commission reached a deal where the DOJ would probe Nvidia’s alleged anti-competitive behavior in the booming AI industry, and the FTC would probe OpenAI and Microsoft. But there has been no official Nvidia probe announced, prompting progressive groups to push harder for the DOJ to recognize what they view as a “dire danger to the open market” that “well deserves DOJ scrutiny.”

Ultimately, the advocacy groups told Kanter that they fear Nvidia wielding “control over the world’s computing destiny,” noting that Nvidia’s cloud computing data centers don’t just power “Big Tech’s consumer products” but also “underpin every aspect of contemporary society, including the financial system, logistics, healthcare, and defense.”

They claimed that Nvidia is “leveraging” its “scarce chips” to force customers to buy its “chips, networking, and programming software as a package.” Such bundling and “price-fixing,” their letter warned, appear to be “the same kinds of anti-competitive tactics that the courts, in response to actions brought by the Department of Justice against other companies, have found to be illegal” and could perhaps “stifle innovation.”

Although data from TechInsights suggested that Nvidia’s chip shortage and cost actually helped companies like AMD and Intel sell chips in 2023, both Nvidia rivals reported losses in market share earlier this year, Yahoo Finance reported.

Perhaps most closely monitoring Nvidia’s dominance, France antitrust authorities launched an investigation into Nvidia last month over antitrust concerns, the letter said, “making it the first enforcer to act against the computer chip maker,” Reuters reported.

Since then, the European Union and the United Kingdom, as well as the US, have heightened scrutiny, but their seeming lag to follow through with an official investigation may only embolden Nvidia, as the company allegedly “believes its market behavior is above the law,” the progressive groups wrote. Suspicious behavior includes allegations that “Nvidia has continued to sell chips to Chinese customers and provide them computing access” despite a “Department of Commerce ban on trading with Chinese companies due to national security and human rights concerns.”

“Its chips have been confirmed to be reaching blacklisted Chinese entities,” their letter warned, citing a Wall Street Journal report.

Nvidia’s dominance apparently impacts everyone involved with AI. According to the letter, Nvidia seemingly “determining who receives inventory from a limited supply, setting premium pricing, and contractually blocking customers from doing business with competitors” is “alarming” the entire AI industry. That includes “both small companies (who find their supply choked off) and the Big Tech AI giants.”

Kanter will likely be receptive to the letter. In June, Fast Company reported that Kanter told an audience at an AI conference that there are “structures and trends in AI that should give us pause.” He further suggested that any technology that “relies on massive amounts of data and computing power” can “give already dominant firms a substantial advantage,” according to Fast Company’s summary of his remarks.

AI’s future in grave danger from Nvidia’s chokehold on chips, groups warn Read More »

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Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says

Amazon, Antitrust law, cloud infrastructure, cloud market, cloud service providers, European Union, Google, microsoft, Policy / /
Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says

Google tried to derail a Microsoft antitrust settlement over anticompetitive software licensing in the European Union by offering a $500 million alternative deal to the group of cloud providers behind the EU complaint, Bloomberg reported.

According to Bloomberg, Google’s offer to the Cloud Infrastructure Services Providers in Europe (CISPE) required that the group maintain its EU antitrust complaint. It came “just days” before CISPE settled with Microsoft, and it was apparently not compelling enough to stop CISPE from inking a deal with the software giant that TechCrunch noted forced CISPE to accept several compromises.

Bloomberg uncovered Google’s attempted counteroffer after reviewing confidential documents and speaking to “people familiar with the matter.” Apparently, Google sought to sway CISPE with a package worth nearly $500 million for more than five years of software licenses and about $15 million in cash.

But CISPE did not take the bait, announcing last week that an agreement was reached with Microsoft, seemingly frustrating Google.

CISPE initially raised its complaint in 2022, alleging that Microsoft was “irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments” by spiking costs to run Microsoft’s software on rival cloud services. In February, CISPE said that “any remedies and resolution must apply across the sector and to be accessible to all cloud customers in Europe.” They also promised that “any agreements will be made public.”

But the settlement reached last week excluded major rivals, including Amazon, which is a CISPE member, and Google, which is not. And despite CISPE’s promise, the terms of the deal were not published, apart from a CISPE blog roughly outlining central features that it claimed resolved the group’s concerns over Microsoft’s allegedly anticompetitive behaviors.

What is clear is that CISPE agreed to drop their complaint by taking the deal, but no one knows exactly how much Microsoft paid in a “lump sum” to cover CISPE legal fees for three years, TechCrunch noted. However, “two people with direct knowledge of the matter” told Reuters that Microsoft offered about $22 million.

Google has been trying to catch up with Microsoft and Amazon in the cloud market and has recently begun gaining ground. Last year, Google’s cloud operation broke even for the first time, and the company earned a surprising $900 million in profits in the first quarter of 2024, which bested analysts’ projections by more than $200 million, Bloomberg reported. For Google, the global cloud market has become a key growth area, Bloomberg noted, as potential growth opportunities in search advertising slow. Seemingly increasing regulatory pressure on Microsoft while taking a chunk of its business in the EU was supposed to be one of Google’s next big moves.

A CISPE spokesperson, Ben Maynard, told Ars that its “members were presented with alternative options to accepting the Microsoft deal,” while not disclosing the terms of the other options. “However, the members voted by a significant majority to accept the Microsoft offer, which, in their view, presented the best opportunity for the European cloud sector,” Maynard told Ars.

Neither Microsoft nor Google has commented directly on the reported counteroffer. A Google spokesperson told Bloomberg that Google “has long supported the principles of fair software licensing and that the firm was having discussions about joining CISPE, to fight anticompetitive licensing practices.” A person familiar with the matter told Ars that Google did not necessarily make the counteroffer contingent on dropping the EU complaint, but had long been exploring joining CISPE and would only do so if CISPE upheld its mission to defend fair licensing deals. Microsoft reiterated a past statement from its president, Brad Smith, confirming that Microsoft was “pleased” to resolve CISPE’s antitrust complaint.

For CISPE, the resolution may not have been perfect, but it “will enable European cloud providers to offer Microsoft applications and services on their local cloud infrastructures, meeting the demand for sovereign cloud solutions.” In 2022, CISPE Secretary-General Francisco Mingorance told Ars that although CISPE had been clear that it intended to force Microsoft to make changes allowing all cloud rivals to compete, “a key reason behind filing the complaint was to support” two smaller cloud service providers, Aruba and OVH.

Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says Read More »

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Users must prove Amazon ripped them off to revive Buy Box rigging suit

Amazon, amazon buy box, amazon marketplace, amazon sellers, Antitrust law, consumer protection act, fulfilled by amazon, Policy / /

Better come with receipts —

Users want Amazon held accountable for hiding cheaper items with faster delivery.

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Users must prove Amazon ripped them off to revive Buy Box rigging suit

A court has dismissed a proposed class-action lawsuit alleging that Amazon’s Buy Box was rigged to rip off customers seeking the best deals on the platform.

The suit followed 2022 antitrust probes in the European Union and United Kingdom that found that Amazon’s Buy Box hid cheaper items with faster delivery times to preference Fulfilled By Amazon (FBA) sellers since at least 2016.

As a result, Amazon had to change its Buy Box practices and earn back the trust of customers and sellers, the company said in a 2022 blog. Among changes, Amazon agreed to treat all sellers equally when featuring offers in the Buy Box and to promote a second competing offer when a comparable deal is available at either a lower price or with a faster delivery time.

Those steps apparently didn’t satisfy users who sued: Jeffrey Taylor and Robert Selway. They asked courts to find a “reasonable inference of injury” since they were Amazon customers for years while the price rigging occurred. They claimed that “but for Amazon’s deceptive conduct concerning the Buy Box algorithm, Plaintiffs and members of the Class would have purchased the lower priced offers from non-FBA sellers with equivalent or better delivery.”

But this week, a US district judge in Seattle, Marsha Pechman, told users suing that it wasn’t enough to show evidence of Amazon’s proven misconduct. To satisfy a claim under Washington’s Consumer Protection Act (CPA), they needed to provide receipts from transactions showing that Amazon charged them higher prices while cheaper items were available. Instead, their complaint seemingly contradicted their claim, only showing one example of a Buy Box screenshot that Pechman said showed a hand soap that was offered by other sellers for prices significantly higher than Amazon’s featured offer.

“Plaintiffs have not adequately shown that they made any specific transaction with Amazon, let alone one from the Buy Box,” Pechman wrote in her order. And they “do not allege any specific purchases in which they were deceived via the Buy Box, let alone provide receipts.”

This doesn’t necessarily end the fight to hold Amazon accountable, though. The judge granted leave for users to amend their complaint and either provide “information regarding specific orders (i.e., receipts)” or “make allegations regarding discrete transactions with Amazon.”

Now, the Amazon users have 30 days to track down receipts or otherwise show evidence of specific transactions where they were injured, Pechman wrote.

“Without a showing of a specific transaction, Plaintiffs cannot possibly allege that they themselves were overcharged for any particular purchase—which is the injury in dispute,” Pechman wrote.

It will likely be challenging for the Amazon users to establish that they paid higher prices for items purchased on the platform years ago, and Pechman admitted this much in her order.

“The Court recognizes that Plaintiffs may be unable to ultimately prove that they overpaid for specific purchases,” Pechman wrote, but the CPA requires more than a “mere possibility of injury.”

Ars could not immediately reach plaintiffs’ lawyers for comment. Amazon declined to comment.

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Microsoft risks huge fine over “possibly abusive” bundling of Teams and Office

alfaview, anticompetitive behavior, Antitrust law, Digital Markets Act, European Commission, European Union, Google, microsoft, monopoly, Policy, SaaS, slack, software as a service / /
A screen shows a virtual meeting with Microsoft Teams at a conference on January 30, 2024 in Barcelona, Spain.

Enlarge / A screen shows a virtual meeting with Microsoft Teams at a conference on January 30, 2024 in Barcelona, Spain.

Microsoft may be hit with a massive fine in the European Union for “possibly abusively” bundling Teams with its Office 365 and Microsoft 365 software suites for businesses.

On Tuesday, the European Commission (EC) announced preliminary findings of an investigation into whether Microsoft’s “suite-centric business model combining multiple types of software in a single offering” unfairly shut out rivals in the “software as a service” (SaaS) market.

“Since at least April 2019,” the EC found, Microsoft’s practice of “tying Teams with its core SaaS productivity applications” potentially restricted competition in the “market for communication and collaboration products.”

The EC is also “concerned” that the practice may have helped Microsoft defend its dominant market position by shutting out “competing suppliers of individual software” like Slack and German video-conferencing software Alfaview. Makers of those rival products had complained to the EC last year, setting off the ongoing probe into Microsoft’s bundling.

Customers should have choices, the EC said, and seemingly at every step, Microsoft sought instead to lock customers into using only its software.

“Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications,” the EC wrote. This alleged abusive practice “may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings.”

For Microsoft, the EC’s findings are likely not entirely unexpected, although Tuesday’s announcement must be disappointing. The company had been hoping to avoid further scrutiny by introducing some major changes last year. Most drastically, Microsoft began “offering some suites without Teams,” the EC said, but even that wasn’t enough to appease EU regulators.

“The Commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition,” the EC said, concluding that “the conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area.”

Microsoft will now be given an opportunity to defend its practices. If the company is unsuccessful, it risks a potential fine up to 10 percent of its annual worldwide turnover and an order possibly impacting how the leading global company conducts business.

In a statement to Ars, Microsoft President Brad Smith confirmed that the tech giant would work with the commission to figure out a better solution.

“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the commission’s remaining concerns,” Smith said.

The EC’s executive vice-president in charge of competition policy, Margrethe Vestager, explained in a statement why the commission refuses to back down from closely scrutinizing Microsoft’s alleged unfair practices.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors by tying it to its popular productivity suites for businesses,” Vestager said. “And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation” in these markets.

Changes coming to EU antitrust law in 2025

The EC initially launched its investigation into Microsoft’s allegedly abusive Teams bundling last July. Its probe came after Slack and Alfaview makers complained that Microsoft may be violating Article 102 of the Treaty on the Functioning of the European Union (TFEU), “which prohibits the abuse of a dominant market position.”

Nearly one year later, there’s no telling when the EC’s inquiry into Microsoft Teams will end. Microsoft will have a chance to review all evidence of infringement gathered by EU regulators to form its response. After that, the EC will review any additional evidence before making its decision, and there is no legal deadline to complete the antitrust inquiry, the EC said.

It’s possible that the EC’s decision may come next year when the EU is preparing to release new guidance to more “vigorously” and effectively enforce TFEU.

Last March, the EC called for stakeholder feedback after rolling out “the first major policy initiative in the area of abuse of dominance rules.” The initiative sought to update TFEU for the first time since 2008 based on reviewing relevant case law.

“A robust enforcement of rules on abuse of dominance benefits both consumers and a stronger European economy,” Vestager said at that time. “We have carefully analyzed numerous EU court judgments on the application of Article 102, and it is time for us to start working on guidelines reflecting this case law.”

Microsoft risks huge fine over “possibly abusive” bundling of Teams and Office Read More »

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Judge mulls sanctions over Google’s “shocking” destruction of internal chats

Antitrust law, department of justice, Google, google monopoly trial, google search ads, Policy, search engines, us v google / /
Kenneth Dintzer, litigator for the US Department of Justice, exits federal court in Washington, DC, on September 20, 2023, during the antitrust trial to determine if Alphabet Inc.'s Google maintains a monopoly in the online search business.

Enlarge / Kenneth Dintzer, litigator for the US Department of Justice, exits federal court in Washington, DC, on September 20, 2023, during the antitrust trial to determine if Alphabet Inc.’s Google maintains a monopoly in the online search business.

Near the end of the second day of closing arguments in the Google monopoly trial, US district judge Amit Mehta weighed whether sanctions were warranted over what the US Department of Justice described as Google’s “routine, regular, and normal destruction” of evidence.

Google was accused of enacting a policy instructing employees to turn chat history off by default when discussing sensitive topics, including Google’s revenue-sharing and mobile application distribution agreements. These agreements, the DOJ and state attorneys general argued, work to maintain Google’s monopoly over search.

According to the DOJ, Google destroyed potentially hundreds of thousands of chat sessions not just during their investigation but also during litigation. Google only stopped the practice after the DOJ discovered the policy. DOJ’s attorney Kenneth Dintzer told Mehta Friday that the DOJ believed the court should “conclude that communicating with history off shows anti-competitive intent to hide information because they knew they were violating antitrust law.”

Mehta at least agreed that “Google’s document retention policy leaves a lot to be desired,” expressing shock and surprise that a large company like Google would ever enact such a policy as best practice.

Google’s attorney Colette Connor told Mehta that the DOJ should have been aware of Google’s policy long before the DOJ challenged the conduct. Google had explicitly disclosed the policy to Texas’ attorney general, who was involved in DOJ’s antitrust suit over both Google’s search and adtech businesses, Connor said.

Connor also argued that Google’s conduct wasn’t sanctionable because there is no evidence that any of the missing chats would’ve shed any new light on the case. Mehta challenged this somewhat, telling Connor, “We just want to know what we don’t know. We don’t know if there was a treasure trove of material that was destroyed.”

During rebuttal, Dintzer told Mehta that Google’s decision to tell Texas about the policy but not the federal government did not satisfy their disclosure obligation under federal rules of civil procedure in the case. That rule says that “only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may” the court “presume that the lost information was unfavorable to the party.”

The DOJ has asked the court to make that ruling and issue four orders sanctioning Google. They want the court to order the “presumption that deleted chats were unfavorable,” the “presumption that Google’s proffered justification” for deleting chats “is pretextual” (concealing Google’s true rationale), and the “presumption that Google intended” to delete chats to “maintain its monopoly.” The government also wants a “prohibition on argument by Google that the absence of evidence is evidence of adverse inference,” which would stop Google from arguing that the DOJ is just assuming the deleted chats are unfavorable to Google.

Mehta asked Connor if she would agree that, at “minimum,” it was “negligent” of Google to leave it to employees to preserve chats on sensitive discussions, but Connor disagreed. She argued that “given the typical use of chat,” Google’s history-off policy was “reasonable.”

Connor told Mehta that the DOJ must prove that Google intended to hide evidence for the court to order sanctions.

That intent could be demonstrated another way, Mehta suggested, recalling that “Google has been very deliberate in advising employees about what to say and what not to say” in discussions that could indicate monopolistic behaviors. That included telling employees, “Don’t use the term markets,” Mehta told Connor, asking if that kind of conduct could be interpreted as Google’s intent to hide evidence.

But Connor disagreed again.

“No, we don’t think you can use it as evidence,” Connor said. “It’s not relevant to the claims in this case.”

But during rebuttal, Dintzer argued that there was evidence of its relevance. He said that testimony from Google employees showed that Google’s chat policy “was uniformly used as a way of communicating without creating discoverable information” intentionally to hide the alleged antitrust violations.

Judge mulls sanctions over Google’s “shocking” destruction of internal chats Read More »

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Apple deal could have been “suicide” for Google, company lawyer says

Antitrust law, Apple, department of justice, Google, google monopoly trial, monopoly, Policy, us v google / /

Woulda coulda shoulda? —

Judge: What should Google have done to avoid the DOJ’s crosshairs?

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John Schmidtlein, partner at Williams & Connolly LLP and lead litigator for Alphabet Inc.'s Google, arrives to federal court in Washington, DC, US, on Monday, Oct. 2, 2023.

Enlarge / John Schmidtlein, partner at Williams & Connolly LLP and lead litigator for Alphabet Inc.’s Google, arrives to federal court in Washington, DC, US, on Monday, Oct. 2, 2023.

Halfway through the first day of closing arguments in the Department of Justice’s big antitrust trial against Google, US District Judge Amit Mehta posed the question that likely many Google users have pondered over years of DOJ claims that Google’s market dominance has harmed users.

“What should Google have done to remain outside the crosshairs of the DOJ?” Mehta asked plaintiffs halfway through the first of two full days of closing arguments.

According to the DOJ and state attorneys general suing, Google has diminished search quality everywhere online, primarily by locking rivals out of default positions on devices and in browsers. By paying billions for default placements that the government has argued allowed Google to hoard traffic and profits, Google allegedly made it nearly impossible for rivals to secure enough traffic to compete, ultimately decreasing competition and innovation in search by limiting the number of viable search engines in the market.

The DOJ’s lead litigator, Kenneth Dintzer, told Mehta that what Google should have done was acknowledge that the search giant had an enormous market share and consider its duties more carefully under antitrust law. Instead, Dintzer alleged, Google chose the route of “hiding” and “destroying documents” because it was aware of conflicts with antitrust law.

“What should Google have done?” Dintzer told Mehta. “They should have recognized that by demanding locking down every default that they were opening themselves up to a challenge on the conduct.”

The most controversial default agreement that Google has made is a 21-year deal with Apple that Mehta has described as the “heart” of the government’s case against Google. During the trial, a witness accidentally blurted out Google’s carefully guarded secret of just how highly it values the Apple deal, revealing that Google pays 36 percent of its search advertising revenue from Safari just to remain the default search tool in Apple’s browser. In 2022 alone, trial documents revealed that Google paid Apple $20 billion for the deal, Bloomberg reported.

That’s in stark contrast to the 12 percent of revenue that Android manufacturers get from their default deals with Google. The government wants the court to consider all these default deals to be anti-competitive, with Dintzer suggesting during closing arguments that they are the “centerpiece” of “a lot” of Google’s exclusionary behavior that ultimately allowed Google to become the best search engine today—by “capturing the default and preventing rivals from getting access to those defaults.”

Google’s lawyers have argued that Google succeeds on its merits. Today, lead litigator John Schmidtlein repeatedly pointed out that antitrust law is designed to protect the competitive process, not specific competitors who fail to invest and innovate—as Microsoft did by failing to recognize how crucial mobile search would become.

“Merely getting advantages by winning on quality, they may have an effect on a rival, but the question is, does it have an anti-competitive effect?” Schmidtlein argued, noting that the DOJ hadn’t “shown that absent the agreements, Microsoft would have toppled Google.”

But Dintzer argued that “a mistake by one rival doesn’t mean that Google gets to monopolize this market forever.” When asked to explain why everyone—including some of Google’s rivals—testified that Google won contracts purely because it was the best search engine, Dintzer warned Mehta that the fact that Google’s rivals “may be happy cashing Google’s checks doesn’t tell us anything.”

According to Schmidtlein, Google could have crossed the line with the Apple deal, but it didn’t.

“Google didn’t go on to say to Apple, if you don’t make us the default, no Google search on Apple devices at all,” Schmidtlein argued. “That would be suicide for Google.”

It’s still unclear how Mehta may be leaning in this case, interrogating both sides with care and making it clear that he expects all his biggest questions to be answered after closing arguments conclude Friday evening.

But Mehta did suggest at one point today that it seemed potentially “impossible” for anyone to compete with Google for default placements.

“How would anybody be able to spend billions and billions of dollars to possibly dislodge Google?” Mehta asked. “Is there any real competition for the default spot?”

According to Schmidtlein, that is precisely what “competition on the merits” looks like.

“Google is winning because it’s better, and Apple is deciding Google is better for users,” Schmidtlein argued. “The antitrust laws are not designed to ensure a competitive market. They’re designed to ensure a competitive process.”

Proving the potential anti-competitive effects of Google’s default agreements, particularly the Apple deal, has long been regarded as the most critical point in order to win the government’s case. So it’s no surprise that the attorney representing state attorneys general, Bill Cavanaugh, praised Mehta for asking, “What should Google have done?” According to Cavanaugh, that was the “right question” to pose in this trial.

“What should they have done 10 years ago when there was a recognition” that “we’re monopolists” and “we have substantial control in markets” is ask, “How should we proceed with our contracts?” Cavanaugh argued. “That’s the question that they answered, but they answered it in the wrong way.”

Seemingly if Google’s default contracts posed fewer exclusionary concerns, the government seems to be arguing, there would be more competition and therefore more investment and innovation in search. But as long as Google controls the general search market, the government alleged that users won’t be able to search the web the way that they want.

Google is hoping that Mehta will reject the government’s theories and instead rule that Google has done nothing to stop rivals from improving the search landscape. Early in the day, Mehta told the DOJ that he was “struggling to see” how Google has either stopped innovating or degraded its search engine as a result of lack of competition.

Closing arguments continue on Friday. Mehta is not expected to rule until late summer or early fall.

Apple deal could have been “suicide” for Google, company lawyer says Read More »

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Google mocks Epic’s proposed reforms to end Android app market monopoly

android, android app marketplace, Android Apps, anticompetitive behavior, Antitrust law, App Store, epic games, epic games store, gaming, Google, Google Play Store, monopoly, Policy / /
Google mocks Epic’s proposed reforms to end Android app market monopoly

Epic Games has filed a proposed injunction that would stop Google from restricting third-party app distribution outside Google Play Store on Android devices after proving that Google had an illegal monopoly in markets for Android app distribution.

Epic is suggesting that competition on the Android mobile platform would be opened up if the court orders Google to allow third-party app stores to be distributed for six years in the Google Play Store and blocks Google from entering any agreements with device makers that would stop them from pre-loading third-party app stores. This would benefit both mobile developers and users, Epic argued in a wide-sweeping proposal that would greatly limit Google’s control over the Android app ecosystem.

US District Court Judge James Donato will ultimately decide the terms of the injunction. Google has until May 3 to respond to Epic’s filing.

A Google spokesperson confirmed to Ars that Google still plans to appeal the verdict—even though Google already agreed to a $700 million settlement with consumers and states following Epic’s win.

“Epic’s filing to the US Federal Court shows again that it simply wants the benefits of Google Play without having to pay for it,” Google’s spokesperson said. “We’ll continue to challenge the verdict, as Android is an open mobile platform that faces fierce competition from the Apple App Store, as well as app stores on Android devices, PCs, and gaming consoles.”

If Donato accepts Epic’s proposal, Google would be required to grant equal access to the Android operating system and platform features to all developers, not just developers distributing apps through Google Play. This would allow third-party app stores to become the app update owner, updating any apps downloaded from their stores as seamlessly as Google Play updates apps.

Under Epic’s terms, any app downloaded from anywhere would operate identically to apps downloaded from Google Play, without Google imposing any unnecessary distribution fees. Similarly, developers would be able to provide their own in-app purchasing options and inform users of out-of-app purchasing options, without having to use Google’s APIs or paying Google additional fees.

Notably, Epic filed its lawsuit after Google removed the Epic game Fortnite from the Google Play Store because Epic tried to offer an “Epic Direct Payment” option for in-game purchases.

“Google must also allow developers to communicate directly with their consumers, including linking from their app to a website to make purchases and get deals,” Epic said in a blog post. “Google would be blocked from using sham compliance programs like User Choice Billing to prevent competing payment options inside an app or on a developer’s website.”

Unsurprisingly, Epic’s proposed injunction includes an “anti-retaliation” section specifically aimed at protecting Epic from any further retaliation. If Donato accepts the terms, Google would be violating the injunction order if the tech giant fails to prove that it is not “treating Epic differently than other developers” by making it “disproportionately difficult or costly” for Epic to develop, update, and market its apps on Android.

That part of the injunction would seem important since, last month, Epic announced that an Epic Games Store was “coming to iOS and Android” later this year. According to Inc, Epic told Game Developers Conference attendees that its app-distribution platform will be the “first ever game-focused, multiplatform store,” working across “Android, iOS, PC and macOS.”

Google mocks Epic’s proposed reforms to end Android app market monopoly Read More »

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Facebook secretly spied on Snapchat usage to confuse advertisers, court docs say

Amazon, anticompetitive behavior, Antitrust law, facebook, Google, Instagram, mark zuckerberg, Meta, online advertising, Policy, Snapchat, social media ads, youtube / /

“I can’t think of a good argument for why this is okay” —

Zuckerberg told execs to “figure out” how to spy on encrypted Snapchat traffic.

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Facebook secretly spied on Snapchat usage to confuse advertisers, court docs say

Unsealed court documents have revealed more details about a secret Facebook project initially called “Ghostbusters,” designed to sneakily access encrypted Snapchat usage data to give Facebook a leg up on its rival, just when Snapchat was experiencing rapid growth in 2016.

The documents were filed in a class-action lawsuit from consumers and advertisers, accusing Meta of anticompetitive behavior that blocks rivals from competing in the social media ads market.

“Whenever someone asks a question about Snapchat, the answer is usually that because their traffic is encrypted, we have no analytics about them,” Facebook CEO Mark Zuckerberg (who has since rebranded his company as Meta) wrote in a 2016 email to Javier Olivan.

“Given how quickly they’re growing, it seems important to figure out a new way to get reliable analytics about them,” Zuckerberg continued. “Perhaps we need to do panels or write custom software. You should figure out how to do this.”

At the time, Olivan was Facebook’s head of growth, but now he’s Meta’s chief operating officer. He responded to Zuckerberg’s email saying that he would have the team from Onavo—a controversial traffic-analysis app acquired by Facebook in 2013—look into it.

Olivan told the Onavo team that he needed “out of the box thinking” to satisfy Zuckerberg’s request. He “suggested potentially paying users to ‘let us install a really heavy piece of software'” to intercept users’ Snapchat data, a court document shows.

What the Onavo team eventually came up with was a project internally known as “Ghostbusters,” an obvious reference to Snapchat’s logo featuring a white ghost. Later, as the project grew to include other Facebook rivals, including YouTube and Amazon, the project was called the “In-App Action Panel” (IAAP).

The IAAP program’s purpose was to gather granular insights into users’ engagement with rival apps to help Facebook develop products as needed to stay ahead of competitors. For example, two months after Zuckerberg’s 2016 email, Meta launched Stories, a Snapchat copycat feature, on Instagram, which the Motley Fool noted rapidly became a key ad revenue source for Meta.

In an email to Olivan, the Onavo team described the “technical solution” devised to help Zuckerberg figure out how to get reliable analytics about Snapchat users. It worked by “develop[ing] ‘kits’ that can be installed on iOS and Android that intercept traffic for specific sub-domains, allowing us to read what would otherwise be encrypted traffic so we can measure in-app usage,” the Onavo team said.

Olivan was told that these so-called “kits” used a “man-in-the-middle” attack typically employed by hackers to secretly intercept data passed between two parties. Users were recruited by third parties who distributed the kits “under their own branding” so that they wouldn’t connect the kits to Onavo unless they used a specialized tool like Wireshark to analyze the kits. TechCrunch reported in 2019 that sometimes teens were paid to install these kits. After that report, Facebook promptly shut down the project.

This “man-in-the-middle” tactic, consumers and advertisers suing Meta have alleged, “was not merely anticompetitive, but criminal,” seemingly violating the Wiretap Act. It was used to snoop on Snapchat starting in 2016, on YouTube from 2017 to 2018, and on Amazon in 2018, relying on creating “fake digital certificates to impersonate trusted Snapchat, YouTube, and Amazon analytics servers to redirect and decrypt secure traffic from those apps for Facebook’s strategic analysis.”

Ars could not reach Snapchat, Google, or Amazon for comment.

Facebook allegedly sought to confuse advertisers

Not everyone at Facebook supported the IAAP program. “The company’s highest-level engineering executives thought the IAAP Program was a legal, technical, and security nightmare,” another court document said.

Pedro Canahuati, then-head of security engineering, warned that incentivizing users to install the kits did not necessarily mean that users understood what they were consenting to.

“I can’t think of a good argument for why this is okay,” Canahuati said. “No security person is ever comfortable with this, no matter what consent we get from the general public. The general public just doesn’t know how this stuff works.”

Mike Schroepfer, then-chief technology officer, argued that Facebook wouldn’t want rivals to employ a similar program analyzing their encrypted user data.

“If we ever found out that someone had figured out a way to break encryption on [WhatsApp] we would be really upset,” Schroepfer said.

While the unsealed emails detailing the project have recently raised eyebrows, Meta’s spokesperson told Ars that “there is nothing new here—this issue was reported on years ago. The plaintiffs’ claims are baseless and completely irrelevant to the case.”

According to Business Insider, advertisers suing said that Meta never disclosed its use of Onavo “kits” to “intercept rivals’ analytics traffic.” This is seemingly relevant to their case alleging anticompetitive behavior in the social media ads market, because Facebook’s conduct, allegedly breaking wiretapping laws, afforded Facebook an opportunity to raise its ad rates “beyond what it could have charged in a competitive market.”

Since the documents were unsealed, Meta has responded with a court filing that said: “Snapchat’s own witness on advertising confirmed that Snap cannot ‘identify a single ad sale that [it] lost from Meta’s use of user research products,’ does not know whether other competitors collected similar information, and does not know whether any of Meta’s research provided Meta with a competitive advantage.”

This conflicts with testimony from a Snapchat executive, who alleged that the project “hamper[ed] Snap’s ability to sell ads” by causing “advertisers to not have a clear narrative differentiating Snapchat from Facebook and Instagram.” Both internally and externally, “the intelligence Meta gleaned from this project was described” as “devastating to Snapchat’s ads business,” a court filing said.

Facebook secretly spied on Snapchat usage to confuse advertisers, court docs say Read More »

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Amazon hides cheaper items with faster delivery, lawsuit alleges

Amazon, antitrust, Antitrust law, European Commission, online marketplace, Policy / /

A game of hide-and-seek —

Hundreds of millions of Amazon’s US customers have overpaid, class action says.

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Amazon hides cheaper items with faster delivery, lawsuit alleges

Amazon rigged its platform to “routinely” push an overwhelming majority of customers to pay more for items that could’ve been purchased at lower costs with equal or faster delivery times, a class-action lawsuit has alleged.

The lawsuit claims that a biased algorithm drives Amazon’s “Buy Box,” which appears on an item’s page and prompts shoppers to “Buy Now” or “Add to Cart.” According to customers suing, nearly 98 percent of Amazon sales are of items featured in the Buy Box, because customers allegedly “reasonably” believe that featured items offer the best deal on the platform.

“But they are often wrong,” the complaint said, claiming that instead, Amazon features items from its own retailers and sellers that participate in Fulfillment By Amazon (FBA), both of which pay Amazon higher fees and gain secret perks like appearing in the Buy Box.

“The result is that consumers routinely overpay for items that are available at lower prices from other sellers on Amazon—not because consumers don’t care about price, or because they’re making informed purchasing decisions, but because Amazon has chosen to display the offers for which it will earn the highest fees,” the complaint said.

Authorities in the US and the European Union have investigated Amazon’s allegedly anticompetitive Buy Box algorithm, confirming that it’s “favored FBA sellers since at least 2016,” the complaint said. In 2021, Amazon was fined more than $1 billion by the Italian Competition Authority over these unfair practices, and in 2022, the European Commission ordered Amazon to “apply equal treatment to all sellers when deciding what to feature in the Buy Box.”

These investigations served as the first public notice that Amazon’s Buy Box couldn’t be trusted, customers suing said. Amazon claimed that the algorithm was fixed in 2020, but so far, Amazon does not appear to have addressed all concerns over its Buy Box algorithm. As of 2023, European regulators have continued pushing Amazon “to take further action to remedy its Buy Box bias in their respective jurisdictions,” the customers’ complaint said.

The class action was filed by two California-based long-time Amazon customers, Jeffrey Taylor and Robert Selway. Both feel that Amazon “willfully” and “deceptively” tricked them and hundreds of millions of US customers into purchasing the featured item in the Buy Box when better deals existed.

Taylor and Selway’s lawyer, Steve Berman, told Reuters that Amazon has placed “a great burden” on its customers, who must invest more time on the platform to identify the best deals. Unlike other lawsuits over Amazon’s Buy Box, this is the first lawsuit to seek compensation over harms to consumers, not over antitrust concerns or harms to sellers, Reuters noted.

The lawsuit has been filed on behalf of “all persons who made a purchase using the Buy Box from 2016 to the present.” Because Amazon supposedly “frequently” features more expensive items in the Buy Box and most sales result from Buy Box placements, they’ve alleged that “the chances that any Class member was unharmed by one or more purchases is virtually non-existent.”

“Our team expects the class to include hundreds of millions of Amazon consumers because virtually all purchases are made from the Buy Box,” a spokesperson for plaintiffs’ lawyers told Ars.

Customers suing are hoping that a jury will decide that Amazon continues to “deliberately steer” customers to purchase higher-priced items in the Buy Box to spike its own profits. They’ve asked a US district court in Washington, where Amazon is based, to permanently stop Amazon from using allegedly biased algorithms to drive sales through its Buy Box.

The extent of damages that Amazon could owe are currently unknown but appear significant. It’s estimated that 80 percent of Amazon’s 300 million userbase is comprised of US subscribers, each allegedly overpaying on most of their purchases over the past seven years. Last year, Amazon’s US sales exceeded $574 billion.

“Amazon claims to be a ‘customer-centric’ company that works to offer the lowest prices to its customers, but in violation of the Washington Consumer Protection Act, Amazon employs a deceptive scheme to keep its profits—and consumer prices—high,” customer’s lawsuit alleged.

Amazon hides cheaper items with faster delivery, lawsuit alleges Read More »