Business
Google loses major antitrust case over search, declared a monopoly by judge
In a major blow to Google, a federal judge on Monday ruled that the tech giant violated antitrust laws by illegally maintaining a monopoly on web searches.
The much-anticipated decision marks a significant victory for federal regulators trying to rein in the power of Big Tech and could send shock waves through the tech world. Other firms, including Apple, Meta and Amazon, also face federal antitrust lawsuits.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” U.S. District Judge Amit Mehta wrote in his opinion.
The ruling did not include a remedy for Google’s conduct.
Kent Walker, president of Google Global Affairs, said in a statement that the company 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,” he said. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”
Regulators alleged that Google maintained a monopoly on web searches by reaching agreements with browser developers, phone manufacturers and wireless carriers to pre-load their products with the Google search engine as the default.
By agreeing to partner with Google, the companies receive a portion of the advertising revenue Google generates through the search process, the ruling said.
In 2021, Google paid out a total of $26.3 billion in revenue share under its contracts with browser developers Apple and Mozilla, major manufacturers of Android devices such as Samsung and Motorola, and U.S. wireless carriers including AT&T and Verizon, according to the ruling.
That amount was Google’s greatest expense that year, the ruling said. That same year, Google earned more than $146 billion in advertising revenue, according to the ruling.
“These distribution deals have forced Google’s rivals to find other ways to reach users,” the ruling said.
The Mountain View-based subsidiary of Alphabet Inc. has increasingly cornered the market for web searching. In 2009, 80% of U.S. web searches went through Google. By 2020, that figure was nearly 90%, according to the ruling. Almost 95% of mobile searches used Google.
Google’s next closest competitor — Microsoft’s Bing — took up just 6% of web searches, the ruling said.
This dominance of the search market caught the attention of antitrust regulators, and by 2020, the U.S. Department of Justice and multiple state attorneys general had filed two separate lawsuits against the tech giant.
During the course of legal proceedings, dozens of witnesses were deposed, including high-ranking tech executives. The bench trial started in September 2023 and lasted for nine weeks. Closing arguments occurred in May.
It’s not yet clear what the ruling will mean for Google, particularly since the company plans to appeal and there will be further proceedings about potential remedies.
“We’re still in the middle of the game, as opposed to the end of the game,” said Colin Kass, a partner in the litigation department at Proskauer and co-head of the firm’s antitrust group.
But if the ruling stands, it could force Google to revisit how it does deals with outside companies for the opportunity to be the default search engine, said Jef Pearlman, clinical professor of law and director of the intellectual property and technology law clinic at the USC Gould School of Law.
“If it stands, this will limit their current approach,” he said.
The ruling is less likely to have an effect on the other pending tech federal antitrust cases, mostly because the Google case focuses so narrowly on the market for web searches, which is not relevant to the other lawsuits, legal experts said.
But it could serve as a warning for artificial intelligence companies, which are starting to make deals with outside companies to use their technology and could run into similar issues as Google did with its default search engine agreements.
Though the AI market is still nascent, “they will be thinking of this as they pen those deals,” Pearlman said.
Business
Beverly Hills is dragging its heels on a new building. The governor says: Build it
California officials are turning the screws on the city of Beverly Hills, where approval of a new hotel and apartment complex is moving too slowly for state housing bosses and the governor.
The lightning rod is a planned mixed-use development near Wilshire Boulevard that has been brought forth under a state law intended to force cities to add more housing whether they like the proposals or not.
The 19-story building on Linden Drive by local developer Leo Pustilnikov would be big by Beverly Hills standards and include a 73-room hotel and restaurant on the first five floors. Plans call for the higher floors to contain 165 apartments including 33 units reserved for rental to lower-income households.
The project so far has failed to pass muster with city planning leaders, who say Pustilnikov hasn’t provided all the details about the project that the city requires to consider approval.
Pustilnikov has pioneered a novel interpretation of a state law known as the “builder’s remedy” to push cities to allow development projects at a size and scale otherwise barred under zoning rules.
As part of their efforts to tackle California’s housing shortage and homelessness crisis, legislators recently beefed up the law, by giving developers leverage to get large proposals approved so long as they set aside a percentage for low-income residents.
Last month the state Department of Housing and Community Development backed Pustilnikov in a “notice of violation” to the city, saying it was violating state housing laws by holding up the project.
“The City Council should reverse its decision and direct city staff to process the project without further delay,” the state notice said, referring to a council vote in June to delay the approval process.
Gov. Gavin Newsom piled on in a statement, saying that the city is violating the law by “blocking” the proposal and referring to opponents of the project as NIMBYs — a highly charged acronym for “not in my backyard” that refers to homeowners who resist development projects in their neighborhoods.
“We can’t solve homelessness without addressing our housing shortage,” the governor said. “Now is a time to build more housing, not cave to the demands of NIMBYs.”
Beverly Hills already faced pressure to approve the Linden project before the state’s letter. In June, Californians for Homeownership, a nonprofit affiliated with the California Assn. of Realtors, sued the city in Los Angeles County Superior Court for not advancing the development.
Some residents in the neighborhood south of Wilshire Boulevard are up in arms about the scale of the project that is designated to fill a parking lot at 125-129 S. Linden Drive between a five-story office building and low-rise apartment buildings.
“None of us are opposed to affordable housing,” said Kenneth A. Goldman, president of the Southwest Beverly Hills Homeowners Assn., but “you don’t have to be a NIMBY to say that’s just so far out of line.”
It would be almost four times taller than the five-story height limit the city has on its books and could threaten the neighborhood’s “quiet lifestyle,” Goldman said. The construction period would be “hell,” he added.
The city has until Sept. 20 to respond to state housing officials and indicated in a statement that the delay was due in part to Pustilnikov changing the original all-residential proposal to include the hotel. It is a switch that could offer a financial coup for the developer in a tourist-friendly city, where getting permission to build a new hotel is a tall order.
Last year Beverly Hills voters decided to rescind the City Council’s approval of an ultra-opulent hotel called Cheval Blanc on the edge of Rodeo Drive after French luxury retailer LVMH spent millions of dollars planning the project.
Of the Linden Drive proposal, the city said in a statement, “The project has not been denied.”
“What was originally submitted as a purely residential project has now morphed into a 73-room hotel and restaurant project with 35 fewer residential units, including a reduction of 7 affordable units,” it said.
When the application is complete, the city said, a public hearing will be held, followed by Planning Commission review and potential approval by the City Council.
That process may be complicated by Pustilnikov’s stated intention to sell his interest in the Linden Drive property as part of a Chapter 11 bankruptcy proceeding involving another of his real estate projects.
In 2018, Pustilnikov purchased a 50-acre parcel on the Redondo Beach waterfront that is the site of a defunct power plant. The property is controlled by entities owned by Pustilnikov and a business partner, Ely Dromy. Using the builder’s remedy law, the pair has advanced a massive mixed-use project for the site with 2,700 apartments as its centerpiece. In court documents, Pustilnikov estimates that the development, if completed, would be worth $600 million.
The effort has been stymied amid fights with the city of Redondo Beach, the California Coastal Commission and AES Corp., the owner of the power plant. In late 2022, AES threatened to foreclose on Pustilnikov. To stave that off, one of the entities that own the site filed for bankruptcy.
In a recent filing in the case, Pustilnikov and Dromy said they will sell the Linden property for $27.5 million to help preserve their ownership of the power plant site.
However, a representative for Pustilinkov, Adam Englander, said in a statement that is not necessarily the case.
Instead, more investors may be brought in to the Redondo Beach property and a developer with luxury hotel experience may become a partner in the Linden project, Englander said.
“It is not anticipated,” Englander said, that the Linden project “in its current form, will be sold prior to completion.”
Pustilnkov has put forward plans to build nearly 3,500 apartment units — 700 of them dedicated as low-income — across a dozen projects in Beverly Hills, Redondo Beach, Santa Monica and West Hollywood under the builder’s remedy. The Linden project is one of seven he’s planning in Beverly Hills alone.
The builder’s remedy provides few avenues for city councils to deny the developments. But because it’s legally untested and separate state environmental laws still apply, projects are not a slam dunk. None of Pustilnikov’s proposals have been approved.
Cities are subject to the law if they do not have state-approved blueprints for future growth. Every eight years, the state requires communities to design a zoning plan accommodating specific numbers of new homes, including those set aside for low- and moderate-income families.
In the current eight-year cycle, Beverly Hills struggled to get a plan that passed muster. Elected officials and residents balked at the city’s requirement to make space for 3,104 homes, saying that doing so would unalterably change the community’s character.
The city blew multiple deadlines and was sued by Californians for Homeownership. In December, a L.A. County Superior Court judge ruled that Beverly Hills could no longer issue any building permits — including those for pools, kitchen and bathroom remodels and other renovations — because of its failure.
The city appealed the ruling and continued to process permits in the meantime, but the decision sparked alarm among civic leaders. In May, the state approved a revised housing plan for Beverly Hills, ending the threat of the permit moratorium.
Business
How Self-Driving Cars Get Help From Humans Hundreds of Miles Away
In places like San Francisco, Phoenix and Las Vegas, robot taxis are navigating city streets, each without a driver behind the steering wheel. Some don’t even have steering wheels:
But cars like this one in Las Vegas are sometimes guided by someone sitting here:
This is a command center in Foster City, Calif., operated by Zoox, a self-driving car company owned by Amazon. Like other robot taxis, the company’s self-driving cars sometimes struggle to drive themselves, so they get help from human technicians sitting in a room about 500 miles away.
Inside companies like Zoox, this kind of human assistance is taken for granted. Outside such companies, few realize that autonomous vehicles are not completely autonomous.
For years, companies avoided mentioning the remote assistance provided to their self-driving cars. The illusion of complete autonomy helped to draw attention to their technology and encourage venture capitalists to invest the billions of dollars needed to build increasingly effective autonomous vehicles.
“There is a ‘Wizard of Oz’ flavor to this,” said Gary Marcus, an entrepreneur and a professor emeritus of psychology and neural science at New York University who specializes in A.I. and autonomous machines.
If a Zoox robot taxi encounters a construction zone it has not seen before, for instance, a technician in the command center will receive an alert — a short message in a small, colored window on the side of the technician’s computer screen. Then, using the computer mouse to draw a line across the screen, the technician can send the car a new route to follow around the construction zone.
“We are not in full control of the vehicle,” said Marc Jennings, 35, a Zoox remote technician. “We are providing guidance.”
As companies like Waymo, owned by Google’s parent company, Alphabet, and Cruise, owned by General Motors, have begun to remove drivers from their cars, scrutiny of their operations has increased. After a series of high-profile accidents, they have started to acknowledge that the cars require human assistance.
While Zoox and other companies have started to reveal how humans intervene to help driverless cars, none of the companies have disclosed how many remote-assistance technicians they employ or how much it all costs. Zoox’s command center holds about three dozen people who oversee what appears to be a small number of driverless cars — two in Foster City and several more in Las Vegas — as well as a fleet of about 200 test cars that each still have a driver behind the steering wheel.
When regulators last year ordered Cruise to shut down its fleet of 400 robot taxis in San Francisco after a woman was dragged under one of its driverless vehicles, the cars were supported by about 1.5 workers per vehicle, including remote assistance staff, according to two people familiar with the company’s operations. Those workers intervened to assist the vehicles every two and a half to five miles, the people said.
The expenses associated with remote assistance are one reason robot taxis will struggle to replace traditional ride-hailing fleets operated by Uber and Lyft. Though companies like Zoox are beginning to replace drivers, they still pay people to work behind the scenes.
“It may be cheaper just to pay a driver to sit in the car and drive it,” said Thomas W. Malone, a professor at the Massachusetts Institute of Technology Center for Collective Intelligence.
Waymo and Cruise declined to comment for this story.
While those companies use traditional cars retrofitted for self-driving, Zoox is testing a new kind of vehicle in Foster City, just south of San Francisco, and in Las Vegas, not far from the Strip.
After testing the vehicles with Zoox employees, their family members and friends, the company plans to make the service available to the public this year. But this robot taxi, like all others, will lean on human assistance.
In Foster City, the company operates what it calls a “fusion center,” where employees monitor robot taxis operating both locally and in Las Vegas, several hundred miles away. From their computer screens, these workers can track live feeds of the road from cameras installed on the cars as well as a detailed overhead view of each car and its surroundings, which is stitched together using data streaming from an array of sensors on the vehicle.
The workers can provide verbal assistance to riders via speakers and microphones inside the cars. They can also assist a car if it encounters a scenario it cannot handle on its own.
“These are situations that don’t necessarily fit the mold,” said Jayne Aclan, who oversees a team of Zoox technicians that provide cars with remote assistance.
Self-driving cars can reliably handle familiar situations, like an ordinary right turn or a lane change. They are designed to brake on their own when a pedestrian runs in front of them. But they are less adept in unusual or unexpected situations. That’s why they still need the humans in the fusion center.
But even though self-driving cars have remote assistance, they still make mistakes on the road.
After reviewing the incident, Zoox indicated that its car had struggled to recognize the fire trucks because they were yellow, not red. “We continue to test and refine our driving software,” Whitney Jencks, a company spokeswoman, said.
Zoox will also continue to lean on human assistance.
“We think that computers should be able to replicate humans and replace humans in all ways,” Dr. Malone, the M.I.T. professor, said. “It is possible that might happen. But it hasn’t yet.”
Business
Civilian space-walk flight Polaris Dawn set for Friday after rocket grounding
The Polaris Dawn mission that will feature the first civilian space walk is set for Friday after the Federal Aviation Administration cleared SpaceX to use the rocket that will launch the astronauts into the space.
The five-day trip led by billionaire Jared Isaacman, which has been repeatedly delayed, is scheduled to blast off from the Kennedy Space Center on Friday, with backup launch dates on Saturday and Sunday should the weather prove unfavorable or other problems arise.
The latest delay came last week, when the FAA grounded SpaceX’s fleet of Falcon 9 rockets after the first-stage booster of a Falcon 9 fell over and exploded while trying to land on a barge off the Florida coast. The FAA lifted its order on Friday, paving the way for the Polaris Dawn mission, which will use a Falcon 9 rocket.
SpaceX said that the first stage had completed 22 launches and returns before the accident. The mishap also ended a streak of 267 successful returns for the Falcon 9 program, which has sharply lower launch costs due its reusable first stage.
The Polaris Dawn mission had been scheduled to launch early last week but was first delayed due to a helium leak in a launchpad hose that pumps helium into the Falcon 9 engines. Unfavorable conditions forecast off the coast of Florida for the splashdown prompted a second delay.
Isaacman, a fintech billionaire, is funding the space journey aboard a SpaceX Crew Dragon capsule, which typically services the International Space Station.
Accompanying him are three other crew members, including two SpaceX employees. The flight will send them to the highest Earth orbit since the Apollo program, and on the third day Isaacman and a second crew member are set to become the first civilians to walk in space.
They will be testing a new generation of form-fitting space suits that SpaceX says will be necessary to colonize the moon and Mars.
Since the mission is not docking with the space station and has limited supplies, weather conditions need to be good for both the launch and splashdown off the Florida coast.
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