Google vs the EU
By Alberto Mingardi
Google has been targeted by the European Commission, for abusing its dominant position. Philip Booth and I wrote on the subject (here) a few months ago. The EU is concerned that “the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules”.
This is actually a longer story: the investigation has been going on for quite a while, and started in 2010 with the preceding Antitrust Commissioner, Joaquin Almunia. Margrethe Vestager, his successor, appears interested in pushing a bigger effort in competition policy. She is a career politician who comes from the Danish left, with a marked anti-big business attitude.
The core of the Commission’s complaint is that “Google gives systematic favourable treatment to its comparison shopping product (currently called ‘Google Shopping’) in its general search results pages, e.g. by showing Google Shopping more prominently on the screen.” It is a matter of “fairness”, so to say.
Google has now replied to the Commission’s Statement of Objections in a way that is rather surprising coming from a multinational corporation. Google’s reply (here) is tongue-in-cheek and considers the Commission’s “preliminary conclusions” “wrong as a matter of fact, law, and economics”.
Read Google’s statement. It is succinct and clear, and personally I find it difficult to argue with. Leonid Bershidsky admires Google taking a stand, too, but fears it will be useless:
Older tech companies know it’s useless to tell the EU — and, inevitably for such a strategy, European courts — that they don’t understand what they’re doing. The bureaucrats and judges may be unable to produce another Google, but they are good at listening to experts and far from dumb. And they often hate what they see as American arrogance.
Microsoft can tell Google exactly what happens next; indeed, Google’s lawyers realize there will be other antitrust investigations. One, concerning the Android operating system and its links to Google services, is already in the works, although no official charges have been brought. Another may soon hit Google where it really hurts, challenging its dominance in online advertising. Google will fight and probably lose, because Europe doesn’t like big U.S. companies to dominate its markets.
…It’s admirable that Google now wants to fight for its principles and against the dilution of its superior offering. It makes me cringe, however, to think of the time and money that will be burned in this hopeless battle.