Google's European Anti-Trust Woes Continue

Posted: Dec 20 2013, 9:26am CST | by , in News


As I’ve mentioned before I’m astonished that Google is being pursued in this manner but pursued they are being. The European Commission has decided that since they are dominant in search in Europe therefore everyone and their dog gets to decide how Google shows its search results. Which does seem a pretty strange way of running a continent really.

This has  been ongoing for some years now and Google has made several offers to settle the matter. Agreeing to place rivals’ searches more prominently on the Google results page and so on. What really confuses me is that the EU Commission keeps referring to those rivals and even deferring to them. It’s as if they are not actually applying any immutable law but asking instead, well, if we force Google to do this or that will that be good enough for you?

Almunia said that, in particular, Google’s latest offer did not remove the Commission’s concerns about the way Google’s rivals in so-called vertical searches – searches for price comparison products – were being treated.

He reached his conclusion after EU regulators asked 125 Google rivals and third parties to provide feedback on the company’s second attempt to settle the investigation.

Google’s original proposal in April was rejected by its competitors, who said that the changes would only reinforce the company’s dominance. That prompted the EU antitrust authority to demand fresh concessions from the U.S. company.

There are two problems with this approach for me. The first is that I’m very English in my approach to the law. Either it’s written down there and everyone can see what it is or there is no law governing the matter. And given that what we’ve got here is a long lasting negotiation between those 125 competitors and the EU itself then I have to assume that there isn’t any written law on this matter.  This is fairly simple logic after all. If there is valid law in this area then that law would say what it is that Google should or has to do. Give that no one does indeed point to any law that tells us what Google should or has to do we must assume that there is no such law. And that’s a pretty basic part of what we English consider to be a just legal system. If there’s no law against it then we can do it. Thus Google should be free to present its results just as it desires. And not be forced by bureaucratic fiat into doing whatever it is that it’s competitors want it to do.

The second is that I don’t really agree with the basic decision, that because Google is dominant it should be subjected to special measures. This is based on an economic point: you don’t have to worry about contestable monopolies. Where there is a natural monopoly, or a legally enforced one, then yes, regulation of how that monopoly operates is often necessary.  But when a monopoly is contestable the monopolist cannot go off and misuse that monopoly. For as soon as he does so the contest will begin again and, as we’ve just seen with the Chinese rare earths story, they will lose that monopoly.

And there’s no shortage of search engines out there, no shortage of VC funds to start another new one either. If Google starts making search worse in pursuit of greater profits then people will simply move away from Google and that dominance will be lost. Thus even the perceived problem isn’t a real problem.

It’s not just that I think that the EU is going about this in the wrong way it’s that the thing they’re trying to do doesn’t need to be done in the first place.

Source: Forbes

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