EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

12.16.07

The Role of the Federal Trade Commission (FTC) as Industry Observer (Updated)

Posted in America, Antitrust, Asia, Courtroom, Deception, Europe, Finance, Hardware, Law, Microsoft at 3:14 am by Dr. Roy Schestowitz

Ineffective service urges following the money

Any profound technical assessment of competing products is likely to end up considering factors like marketing, competitive/anticompetitive tricks, and even lobbying. Nowadays, it takes more than good (even superior) products to win. Just consider astroturfing which Microsoft used to defeat OS/2.

”Today we turn our attention to another scandalous set of cases where another regulatory body fails to do its vital job.”In an engineering world, from an entirely pragmatic point-of-view one can drift towards (and be distracted by) companies. Therein, certain behaviours ascend to another level, which is politicians.

This would not be the first time that we find irregular and irrational behaviour, especially in the Department of Justice, whose involvements in software antitrust issues is burdened by a long history of failures.

Today we turn our attention to another scandalous set of cases where another regulatory body fails to do its vital job. It’s not the SEC which was mentioned last week, but it’s the FTC, which repeatedly ignores the abuses by Intel, among other large companies with an army of lobbyists.

A case that was brought to the news a few days ago might be that last straw which breaks the camel’s back. There is some exemplary evidence that shows the role of inter-personal relationships. In other words, companies can have insiders in government, which in turn enables them to act viciously without proper scrutiny. The watchdogs are asleep by choice. Blame nepotism, favouritism, or just favours (strategic charity, financial incentives, et cetera).

This time, as usual, it is Deborah Platt Majoras that makes the headlines (mind the fact the many of the links below have expired or will have expired by next week, but articles are quoted verbatim and are no older than one year).

FTC head won’t recuse from Google deal

The Electronic Privacy Information Center and the Center for Digital Democracy said in a petition Wednesday that Majoras’ husband, John M. Majoras, is a partner at the Jones Day law firm.

Isn’t that quite a huge conflict of interests?

Consider another couple of new articles:

1. FTC Chair Asked to Step Down From DoubleClick Review

U.S. Federal Trade Commission Chairman Deborah Platt Majoras is consulting with the agency’s ethics officer to see if she should recuse herself from a review of Google’s planned acquisition of online ad network DoubleClick.

2. Sources: FTC extends Google-DoubleClick review

Antitrust regulators with the Federal Trade Commission have received an extension to review the controversial $3.1 billion Google-DoubleClick megamerger, according to sources.

It is worth adding that Microsoft is the key driver for scrutiny here. Microsoft was caught lobbying in the press, the activist and the political level in order to put this merger under great pressure. Hypocrisy knows no bounds because Microsoft was both willing and prepared to pay twice as much for the same company. It got rejected by DoubleClick investors, so envy and arrogance ought to be considered as possible explanations.

This brings back memories of the blind eye that was turned to Intel just a couple of months ago, despite the decision made in other courts around the world.

Intel dodges formal U.S. antitrust probe – report

Head of F.T.C. nixes Intel probe, despite investigations in Europe and South Korea.

Apart from similar investigations in Europe, China, and Japan, there is always the recent one in South Korea to learn from.

1. S. Korea sends Intel antitrust statement-company

South Korea began investigating Intel’s marketing and rebate practices for computer processors two years ago after similar probes by Japan and the European Union.

2. Korean antitrust probe of Intel ends, penalties to be decided soon

Although neither Intel nor the KFTC provided details on the findings, sources told the Korea Times said that the antitrust regulators did plan to impose penalties on the chipmaker. “The FTC gained some evidence backing up suspicions that Intel has offered discounts to computer makers in exchange for sealing exclusive deals, and coerced dealers not to buy products from rivals such as Advanced Micro Devices (AMD),” said one source.

3. Intel: South Korean Antitrust Probe Over

South Korean media have reported the inquiry has centered on allegations Intel abused its market dominance by pressuring computer makers to avoid using chips made by Intel’s rivals.

Here is the FTC’s response:

1. US FTC staff not held back on Intel-commissioner

FTC Chairman Deborah Majoras, a Republican, has rejected requests by lawmakers, other commissioners and Advanced Micro Devices Inc to open a formal antitrust investigation into its much larger rival Intel, the New York Times reported on Monday.

2. Report: FTC rejects calls for antitrust probe of Intel

The New York Times reported on Monday that FTC Chairman Deborah Majoras has rejected requests to escalate at informal review into a formal investigation, citing unnamed government officials and lawyers involved in the matter.

3. FTC won’t step up Intel antitrust probe

Intel, the world’s biggest maker of computer chips, has been cited for anti-competitive behavior for allegedly offering large discounts to computer makers in exchange for their not using products from AMD, the paper said.

Those faulting Intel include regulators with the European Commission and Korea, the Times said. Japanese officials also made similar accusations in 2005, it said. Intel controls some 80 percent to 90 percent of the microchip market, it said.

On the same note, when Intel came under fire for a questionable acquisition, Intel did not require much effort to escape an iron fist.

1. Intel Gets FTC’s OK on Flash Chip Merger

Intel Corp. has received antitrust clearance to form a new flash memory firm with STMicroelectronics NV.

This came after what appeared at the time like symbolic requests, namely:

2. Intel urged to give more data on flash unit deal

…U.S. Federal Trade Commission has requested additional information on the company’s deal with STMicroelectronics…

3. Intel to Reply Soon to Antitrust Queries

It is not common for the Federal Trade Commission, which issued a second request for information to Intel last week, to ask for more information on such mergers.

Other watchdogs have been frustrated with the FTC’s decisions. Consider this one:

US antitrust group urges Intel investigation

The American Antitrust Institute (AAI), a Washington DC lobby group, has written an open letter to the Federal Trade Commission urging an investigation of Intel’s allegedly monopolistic business practices.

[...]

AAI say its insistence of an investigation is based on allegations by AMD in a private case and information obtained by the EC’s complaint, which have not been made public

Remember that the AAI also slammed the Department of Justice for its tactless approach of defending Microsoft a couple of months ago. It seems like the AAI is the only watchdog that isn’t toothless yet.

How is it all possible? Well, in the past we showed financial links between Microsoft and politicians, so the DoJ. Nepotism was hardly a surprise. We have also listed Intel’s abuses against AMD and others (partial list here), but where does Intel get all that power from? In particular, how is Intel able to dodge such investigations? Lobbying might be the answer, so here are some articles to consider:

1. Why Brussels is Abuzz with Lobbyists

As the EU sets more rules, corporations are building their presence and paying for clout

2. Intel Hires Lobbying Firm

Computer chip maker Intel Corp. has hired FBA Inc. to lobby the federal government, according to a federal disclosure form.

Intel was also listed among the companies here:

3. Marketing Group Spent $350,000 Lobbying

The Direct Marketing Association spent $350,000 in the first half of 2007 to lobby the federal government, according to a disclosure form.

There’s also Intel’s involvement with Bill Clinton.

This seems like a normal type of practice, which it should not be. People who are paid to rewrite laws and pressure for political change ruin the spirit of democracy. When it comes to lobbying, the law requires only disclosures, yet does not forbid the activity as a whole. Another example from the beginning of the year:

Micron Opening Lobbying Office in DC

Micron Technology Inc., on Thursday said it has opened a government affairs office in Washington to lead the computer memory maker’s lobbying efforts on patent reform, international trade, research funding and other issues.

[...]

Carroll, 33, worked for the last six years as trade policy director for semiconductor maker Intel Corp., which she joined in 1998 as European government affairs policy manager based in Brussels, Belgium.

Of course, a company like Intel can always use the same excuses as Microsoft, claiming that it merely ‘innovates’ and the whole world is against it for no apparent reason. Case of point:

Intel’s Otellini accuses the EU of being anti-American

Still, he sighed, the worst case scenario is that he might have to write a cheque, even if fines in the current case could be as high as $3.2 billion

The EU may indeed be anti-America, but only is “anti-America” means “against kickbacks”.

The bottom line of this post ought to say that the FTC is a lost cause, so any time it’s mentioned in the context of large monopolistic companies, it ought to be questioned or dismissed promptly. The same goes for the DoJ, but not the AAI. In the context of formats, ECMA is still seen as somewhat a marketing puppet (pay to play), whereas ISO paints itself as a victim which nevertheless lost its spine (and thus its credibility).

Update: going further off topic, the Department of Justice has had other serious issues relating to trust. It goes only several months back. The recent Department of Justice scandal is depicted here.

This was also discussed a couple of months ago.

Try to imagine the picking of federal agents whose inclination favours those who fund them. Here are some references of interest:

Kroes slams US [DoJ] criticism of EU Microsoft ruling

Kroes said that it was “unacceptable” that a representative of the US judiciary should criticise a court of law outside his jurisdiction.

“It is absolutely not done,” she told journalists on Wednesday.

“The European commission does not pass judgement on US rulings and we should expect the same from the US.”

Microsoft sets spinners on court verdict

Microsoft may have lost in court, but it quickly tried to win the war of media reaction via organisations like CompTIA, the Computing Technology Industry Association and ACT (the Association for Competitive Technology) which both intervened in court on its side.

Microsoft Paid Lobbyist $160,000

Microsoft Paid Paid Bingham McCutchen $160,000 to Lobby Federal Gov’t in First Half of 2007

US politicians go to bat for Microsoft

Report Says Nonprofits Sold Influence to Abramoff

E-mails released by the committee show that Abramoff, often with the knowledge of the groups’ leaders, exploited the tax-exempt status and leveraged the stature of the organizations to build support among conservatives for legislation or government action sought by clients including Microsoft Corp., mutual fund company DH2 Inc., Primedia Inc.’s Channel One Network, and Brown-Forman, maker of Jack Daniel’s whiskey.

Politicians in Microsoft’s Pocket

Continuing on the theme of which politicians are receiving money from who. Here is a list of candidates who took money from MSFT.

Politics and tech companies: follow the money

Microsoft took first place with $651,100 given out, while Hewlett-Packard gave only $185,550, and Gateway gave a paltry $2,000. Microsoft’s donations certainly illustrate well the true size of the company and the extent of its political concerns.

Microsoft Finds Legal Defender in Justice Dept.

Nearly a decade after the government began its landmark effort to break up Microsoft, the Bush administration has sharply changed course by repeatedly defending the company both in the United States and abroad against accusations of anticompetitive conduct, including the recent rejection of a complaint by Google.

[...]

In the most striking recent example of the policy shift, the top antitrust official at the Justice Department last month urged state prosecutors to reject a confidential antitrust complaint filed by Google that is tied to a consent decree that monitors Microsoft’s behavior. Google has accused Microsoft of designing its latest operating system, Vista, to discourage the use of Google’s desktop search program, lawyers involved in the case said.

Lessig: Required Reading: the next 10 years

Yet governments continue to push ahead with this idiot idea — both Britain and Japan for example are considering extending existing terms. Why?

The answer is a kind of corruption of the political process. Or better, a “corruption” of the political process. I don’t mean corruption in the simple sense of bribery. I mean “corruption” in the sense that the system is so queered by the influence of money that it can’t even get an issue as simple and clear as term extension right.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

A Single Comment

  1. Noclegi Polsce said,

    December 17, 2007 at 11:09 am

    Gravatar

    The more I am interested it politics, the more I get. Nervous new scandals appear all the time. Does it have to be this way? I think I’ll give up watching it all.

What Else is New


  1. Links 17/1/2018: HHVM 3.24, WordPress 4.9.2

    Links for the day



  2. No Patents on Life (CRISPR), Said EPO Boards of Appeal Just a Few Hours Ago

    Broad spectacularly loses its key case, which may soon mean that any other patents on CRISPR too will be considered invalid



  3. Only Two Weeks on the Job, Judge Patrick Corcoran is Already Being Threatened by EPO Management

    The attack on a technical judge who is accused of relaying information many people had already relayed anyway (it was gossip at the whole Organisation for years) carries on as he is again being pushed around, just as many people predicted



  4. EPO Board of Appeal Has an Opportunity to Stop Controversial Patents on Life

    Patent maximalism at the EPO can be pushed aback slightly if the European appeal board decides to curtail CRISPR patents in a matter of days



  5. Links 16/1/2018: More on Barcelona, OSI at 20

    Links for the day



  6. 2018 Will be an Even Worse Year for Software Patents Because the US Supreme Court Shields Alice

    The latest picks (reviewed cases) of the Supreme Court of the United States signal another year with little or no hope for the software patents lobby; PTAB too is expected to endure after a record-breaking year, in which it invalidated a lot of software patents that had been erroneously granted



  7. Patent Trolls (Euphemised as “Public IP Companies”) Are Dying in the United States, But the Trouble Isn't Over

    The demise of various types of patent trolls, including publicly-traded trolls, is good news; but we take stock of the latest developments in order to better assess the remaining threat



  8. EPO Management and Team UPC Carry on Lying About Unified Patent Court, Sinking to New Lows in the Process

    At a loss for words over the loss of the Unitary Patent, Team UPC and Team Battistelli now blatantly lie and even get together with professional liars such as Watchtroll



  9. China Tightens Its Knot of Restrictive Rules and Patents

    Overzealous patent aggressors and patent trolls in China, in addition to an explosion in low-quality patents, may simply discourage companies from doing production/manufacturing there



  10. Microsoft's Patent Racket Has Just Been Broadened to Threaten GNU/Linux Users Who Don't Pay Microsoft 'Rents'

    Microsoft revisits its aggressive patent strategy which it failed to properly implement 12 years ago with Novell; it wants to 'collect' a patent tax on GNU/Linux and it uses patent trolls to make that easier



  11. EPO Scandals Played a Considerable Role in Sinking the Unified Patent Court (UPC)

    Today's press coverage about the UPC reinforces the idea that the EPO saga, culminating in despicable attacks on Patrick Corcoran (a judge), may doom the UPC once and for all (unless one believes Team UPC)



  12. J Nicholas Gross Thinks Professors Stop Being Professors If They're Not Patent Extremists Like Him

    The below-the-belt tactics of patent trolls and their allies show no signs of abatement and their tone reveals growing irritation and frustration (inability to sue and extort companies as easily as they used to)



  13. The US Supreme Court Has Just Denied Another Chance to Deal With a Case Similar to Alice (Potentially Impacting § 101)

    There is no sign that software patents will be rendered worthwhile any time in the near future, but proponents of software patents don't give up



  14. Litigation Roundup: Nintendo, TiVo, Apple, Samsung, Huawei, Philips, UMC

    The latest high-profile legal battles, spanning a growing number of nations and increasingly representing a political shift as well



  15. Roundup of Patent News From Canada, South America and Australia

    A few bits and pieces of news from around the world, serving to highlight patent trends in parts of the world where the patent offices haven't much international clout/impact



  16. Links 15/1/2018: Linux 4.15 RC8, Wine 3.0 RC6

    Links for the day



  17. PTAB is Being Demeaned, But Only by the Very Entities One Ought to Expect (Because They Hate Patent Justice/Quality)

    The latest rants/scorn against PTAB -- leaning on cases such as Wi-Fi One v Broadcom or entities like Saint Regis Mohawk Tribe, Apple etc. -- are all coming from firms and people who profit from low-quality patents



  18. If Ericsson and Its Patent Trolls (Like Avanci and Unwired Planet) Cannot Make It, the Patent Microcosm Will Perish

    The demise of patent-asserting/patent assertion business models (trolling or enforcement by proxy) may see front groups/media supportive of it diminishing as well; this appears to be happening already



  19. European Patent Office Causes Physical Harm to Employees, Then Fires Them

    Another one (among many) EPO documents about the alarming physical wellbeing of EPO employees and the management’s attitude towards the issue



  20. Battistelli Was Always (Right From the Start and Since Candidacy) All About Money

    “I have always admired creative people, inventors, those who, through their passion and their work, bring about scientific progress or artistic evolution. I was not blessed with such talent myself,” explained the EPO‘s President when pursuing his current job (for which he was barely qualified and probably not eligible because of his political work)



  21. “Under the Intergovernmental EPC System It is Difficult to Speak of a Functional Separation of Powers”

    An illustration of the glaring deficiency that now prevails and cannot be tolerated as long as the goal is to ensure democratic functionality; absence of the role of Separation of Powers (or Rule of Law) at the EPO is evident now that Battistelli not only controls the Council (using EPO budget) but also blatantly attacks the independence of the Boards of Appeal



  22. The Patent Microcosm Thinks It's Wonderful That IP3 is Selling Stupid Patents, Ignores Far More Important News

    IP3, which we've always considered to be nothing but a parasite, does what it does best and those who love stupid patents consider it to be some sort of victory



  23. Automotives, Artificial Intelligence, Internet of Things and Industry 4.0 Among the Buzz Terms Used to Bypass Alice and the EPC Nowadays

    In order to make prior art search a lot harder and in order to make software patents look legitimate (even in various courtrooms) the patent microcosm and greedy patent offices embrace buzzwords



  24. Blockchain Becomes the Target Not Only of Financial Institutions With Software Patents But Also Trolls

    Blockchain software, which is growing in importance and has become ubiquitous in various domains other than finance, is perceived as an opportunity for disruption and also patent litigation; CNBC continues to publish puff pieces for Erich Spangenberg (amid stockpiling of such patents)



  25. EPC Foresaw the Administrative Council Overseeing the Patent Office, Jesper Kongstad Made It “Working Together”

    An old open letter from the EPO shows the famous moment when Jesper Kongstad and Battistelli came up with a plan to empower both, rendering the Administrative Council almost subservient to the Office (complete inversion of the desired topology)



  26. 2010: Blaming the Messenger (SUEPO) for Staff Unhappiness at the European Patent Office (EPO)

    Tactics of SUEPO (EPO union) blaming go further back than Battistelli and can be found in the previous administration as well



  27. 2010: Deterioration of Working Conditions (e.g. Office Space) for EPO Staff

    Old EPO proposals which suggested the reduction of office space for EPO staff (among other things) — something which later happened to DG3, following the ‘exile’ to Haar



  28. Budget at the EPO Decided Before Consultation

    An old consultation meeting (GAC) at the EPO coincided with a meeting (MAC) which is perceived as ignoring the actual consultation — something which clearly should not be happening



  29. Less Than Half a Year in the Job, Battistelli Already Disobeys/Disregards Rulings From ILO's Tribunal

    As EPO President, Battistelli shows poor comprehension or lack of respect for the rule of law just months after taking the job



  30. Only Half a Year in the Job, Battistelli Breaks EPO Nomination Rules

    oing back to the dawn of the Battistelli era, irregularities appear very early on


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts