Data Connectivity Services, now facing Anti-competitive and Anti-Trust Claims
Summary: Web content providers that bundle free mobile data connectivity with their services will unlikely face anti-competitive claims if such partnerships do not exclude others from doing likewise.
Internet content providers have begun partnering mobile operators to offer free data connection with their online services, but this will unlikely trigger antitrust claims if the agreement does not exclude other companies from providing similar services.
Google last month launched Free Zone in the Philippines through a partnership with local telco, Globe Telecom. The service allows Globe subscribers to access Google services, specifically Search, Gmail and Google+, on their mobile phone for free. Google expanded the service to South Africa through a partnership with mobile operator, 8.ta.
With Free Zone, subscribers can access for free Web pages linked from Google Search results. However, if subscribers clicked on a URL link within the Web page, they will see a warning which informs them visiting that page will incur data charges and they can decide whether they want to click through or not.
Facebook launched a similar service in May 2010, called 0.facebook.com. Subscribers whose mobile operator has partnered Facebook for this service can access a text-based Facebook Web site without incurring data charges. The subscribers will be alerted that they need to pay data access fees when they click to view photos or browse other sites, and will be charged only when they confirm they want to leave 0.facebook.com.
Rob Bratby, managing partner of Olswang Asia, said bundling free mobile Internet access to cloud-based services does not raise immediate antitrust issues. He noted if the offerings were “vanilla bundles” across markets where the content providers were not dominant players, it would unlikely raise antitrust concerns.
“Antitrust law protects the interests of consumers through protecting the process of competition,” Bratby explained. “In these examples, it appears providers of other cloud services are also able to procure and bundle access with their products, and access providers are likewise able to bundle cloud services with their access services.”
However, there are situations which could lead to antitrust issues, the lawyer said. For example, if the partnership excludes a large part of the competition in either the Internet connectivity or content market, or if the content provider is a dominant player and uses the partnership to enter the connectivity market, these would lead to antitrust issues.
Bringing Internet to first-time users
When queried on such concerns, Google directed ZDNet to public information on Free Zone which included an FAQ highlighting users can click on any link in the search results page for free, and there are no limits on the amount of searches the user can make. Google Free Zone aims to bring the World Wide Web to “the next billion users of the Internet”, many of whom are in emerging markets and access Internet via a mobile phone without ever owning a PC.
ZDNet Asia approached Yahoo to find out if the company had plans to offer similar free connectivity services to users. Tommaso Del Re, its head of business development for India and Southeast Asia, did not respond directly to the question, but said Yahoo had been “partnering operators in the mobile ecosystem across Asia, and globally, for over six years to help innovate and grow the market”.
Del Re also pointed to the company’s initiatives to bring the Internet to new Web users in Asia. He said it works with telcos in the region’s emerging markets to offer mobile-first, new-to-the-Internet users with plans which remove price uncertainty regarding data costs.
“Our telco partners have launched these plans over a year ago in markets like India, Indonesia, the Philippines, and Vietnam and will continue to do so in the future,” he said.
While contacted, Facebook did not respond with comments for this article.