None of the other FairSearch members, including several small European tech startups, have official voting rights over the group\u2019s actions, which include hiring some of Brussels\u2019 best-known legal advisers and lobbyists as part of the organization\u2019s anti-Google campaign.<\/p>\n
Oracle and Naspers\u2019 exclusive control of FairSearch raises questions about the transparency of EU lobbying and highlights the risk that competition investigations can be taken hostage by warring corporate interests.<\/p>\n
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A FairSearch General Assembly held on September 21, 2017, appointed representatives of Oracle and Naspers as board members, while a meeting of FairSearch\u2019s \u201ceffective members\u201d that same day listed Oracle and Naspers as the organization\u2019s only \u201ceffective members.\u201d<\/p>\n
It also shines a light on opaque lobbying tactics known as \u201castroturfing,\u201d in which large corporations support supposedly grassroots initiatives in the hope of winning favor with regulators and lawmakers.<\/p>\n
\u201cIt\u2019s an incredibly harmful practice,\u201d said Alberto Alemanno, author of Lobbying for Change<\/a>, a book about average citizens looking to lobby their lawmakers. \u201cAstroturfing is misunderstood and largely invisible to most people.\u201d<\/p>\n In response, FairSearch said the organization\u2019s work \u201cspeaks for itself\u201d and described POLITICO\u2019s disclosures about Oracle and Naspers as a \u201cdistraction\u201d from the debate about Google\u2019s behavior.<\/p>\n Oracle and Naspers are not alone in using proxy organizations, and it is not illegal for companies to back third-party groups.<\/p>\n \u201cGoogle\u2019s behavior has harmed consumers by stifling competition and restricting innovation\u201d \u2014Margrethe Vestager<\/em><\/p>\n<\/blockquote>\n In its fight with EU regulators, Google can also rely on a network of proxies to represent its interests, including the Developers Alliance<\/a>, a nonprofit group co-founded by the search giant. Google is one of the largest spenders on European lobbying activities, according to regulatory filings<\/a>.<\/p>\n But while other companies like Intel and Ford sit on the Developers Alliance\u2019s board, Naspers and Oracle enjoy sole legal control of FairSearch \u2014 an anti-Google coalition that stands out for the length and prominence of its action against the search giant.<\/p>\n FairSearch\u2019s campaign against Google started almost a decade ago in the United States, when it contested the company\u2019s purchase of ITA, a travel search comparison service. The organization expanded to Europe in 2013, establishing itself as a Belgian nonprofit and becoming the first complainant against Android in Europe.<\/p>\n Microsoft, whose online search product competes with that of Google, was a FairSearch board member, but left the organization in 2015. Nokia, whose digital maps service \u2014 which it sold in 2015 \u2014 remains a rival to Google\u2019s map product, is still a member, though it no longer features in the group\u2019s legal filings.<\/p>\n In its Android investigation, the Commission accused Google<\/a> of using its dominant mobile software to favor its search and other digital products over those of rivals. The company denies any wrongdoing.<\/p>\n Margrethe Vestager, the region\u2019s competition czar, could announce the results of that investigation \u2014 and a potential multibillion euro fine \u2014 as soon as the spring, according to people following the proceedings.<\/p>\n \u201cGoogle\u2019s behavior has harmed consumers by stifling competition and restricting innovation,\u201d Vestager told reporters when announcing the Android charges against Google in 2016.<\/p>\n A fresh penalty would add to the search giant\u2019s legal troubles, coming roughly a year after European enforcers fined Google \u20ac2.4 billion<\/a> for abusing a dominant position in search, as well as similar antitrust setbacks in Russia and India.<\/p>\n On April 14, 2017, FairSearch\u2019s board \u2014 made up of a representative of both Oracle and Naspers \u2014 signed off on the organization\u2019s accounts dating back to 2013. They record no income and no spending.<\/p>\n The active role played by Oracle (an American provider of cloud computing and other software services) and Naspers (a South African tech and telecommunications giant whose corporate interests include a one-third stake in Tencent, the Chinese online giant valued at more than $500 billion, and leading Russian internet portal Mail.ru<\/a>) raises questions about who will likely benefit from the expected remedies and fine.<\/p>\n Neither company has a direct stake in the mobile markets involved in the Commission\u2019s Android investigation.<\/p>\n Their wider corporate interests, though, often conflict with Google\u2019s own global digital empire. Oracle, in particular, is a longtime Google critic in Washington<\/a> and Brussels<\/a> and sued the search giant in the U.S. for up to $9 billion over alleged copyright infringements<\/a> in an ongoing case.<\/p>\n \u201cWe\u2019ve seen an expansion of tech lobbying in recent years,\u201d said Daniel Freund, head of advocacy EU integrity at Transparency International, a group that tracks lobbying efforts. \u201cWith astroturfing, it\u2019s hard to tell if a group is an independent voice or one that\u2019s acting on behalf of a company.\u201d<\/p>\n By becoming a complainant in an EU antitrust case, companies enjoy privileged access to confidential information<\/p>\n<\/blockquote>\n A spokesperson for the EU\u2019s competition authority declined to comment on FairSearch, but said the agency \u201ctakes all complaints as an information source and starting point for our own assessment of any potential competition infringement.\u201d<\/p>\n Its guidelines<\/a> say complainants like FairSearch should be direct competitors or directly affected by the potentially illegal conduct, which investigators can review on an ongoing basis. By becoming a complainant in an EU antitrust case, companies enjoy privileged access to confidential information linked to ongoing inquiries.<\/p>\n James Allen, a spokesperson for Naspers, said the company\u2019s involvement in FairSearch was based on its effort to ensure fair competition in the e-commerce sector. Oracle did not respond to multiple requests for comment.<\/p>\n Google and the Developers Alliance declined to comment.<\/p>\n Oracle and Naspers lie at the heart of FairSearch. In the organization\u2019s Belgian filings<\/a>, Karl Cox<\/a>, Oracle\u2019s vice president for global public affairs in Paris and David Tudor<\/a>, Naspers\u2019 group general counsel in Amsterdam, are listed as the group\u2019s only board members.<\/p>\n Both men are the sole individuals with legal powers to make decisions about the organization\u2019s activities. Other FairSearch companies are so-called adherent members with no voting rights, according to the group\u2019s recent statutes<\/a>.<\/p>\n The anti-Google group reported an annual budget of zero euros \u2026 although it boasted a stable of top-flight advisers<\/p>\n<\/blockquote>\n FairSearch does not promote its ties to Oracle and Naspers \u2014 whose combined net profit was about $15 billion, in their most recent annual reports \u2014 beyond a note in its submission to the EU transparency register, a database of lobbying interests.<\/p>\n In those records<\/a>, FairSearch says both companies are members alongside other smaller companies like Foundem and Twenga, online comparison shopping sites with far less financial heft to conduct a yearslong anti-Google lobbying campaign.<\/p>\n Several FairSearch members said the group\u2019s activities were conducted by consensus, and it was inaccurate to suggest that only Oracle and Naspers made decisions for the group. None of the members that POLITICO contacted for this article provided evidence of such consensus decision-making when asked for it, and FairSearch did not respond to repeated questions about its structure and financing.<\/p>\n The anti-Google group reported an annual budget of zero euros between 2013 and 2016 to Belgian authorities, although it boasted a stable of top-flight advisers.<\/p>\n Its legal counsel is Thomas Vinje, one of Brussels\u2019 most acclaimed antitrust lawyers at Clifford Chance, a law firm. Vinje previously fought Microsoft during its own lengthy antitrust standoff with the Commission, and also remains Oracle\u2019s long-standing antitrust counsel<\/a> in Europe, based on public statements.<\/p>\n FairSearch also hired Burson Marsteller and FIPRA International, blue-chip public relations firms in Brussels, to provide talking points to lawmakers and journalists about its anti-Google campaign.<\/p>\n In the EU transparency register, Burson Marsteller said it received<\/a> up to \u20ac199,999 from FairSearch in 2016, while FIPRA International said it pocketed<\/a> up to \u20ac49,999 from the organization that same year, the latest figures available. Both companies said the filings connected to FairSearch in the EU register were correct.<\/p>\n FairSearch\u2019s most recent filings with Belgian authorities, though, state it received no money or membership fees<\/a> since its creation in 2013. The origin of the money to pay these outside advisers remains unknown.<\/p>\n View this document on Scribd<\/a> <\/p>\n Article 5 of FairSearch\u2019s latest statues, filed December 2017, say \u201ceffective\u201d members \u201cparticipate actively and closely in the execution of the Association\u2019s goals.\u201d By contrast \u201cadherent\u201d members do not. Article 13 specifies that \u201conly effective members have the right to vote.\u201d<\/em><\/p>\n This article was updated to clarify that none of the members contacted by POLITICO provided evidence of consensus-decision-making at FairSearch.<\/em><\/p>\n Original Article<\/a><\/p>\n [contf] [contfnew] Oracle and Naspers, two of the world\u2019s largest tech companie..<\/p>\n","protected":false},"author":1,"featured_media":64693,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[],"class_list":["post-64692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech"],"yoast_head":"\nInvestigation wrapping up<\/strong><\/h3>\n
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Exclusive voting rights<\/strong><\/h3>\n
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Funding mystery <\/strong><\/h3>\n
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