It was Wednesday, April 15th when the European Commission announced to have sent a statement of objections to Google for allegedly abusing its market position, cheating on consumers and competitors by distorting Web search results to favour its own shopping service. Moreover, the European Commission has also formally started another antitrust investigation, concerning the mobile operating system Android, “investigating on whether Google has breached the EU antitrust rules by hindering the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products”.
“No competition without transparency”, can be reassumed as the essence of the Messerschmidt Report on EU Competition Policy, adopted by the European Parliament, Tuesday March 10th that led the EU’s investigation into Google to a turning point. Indeed when approved, the European Parliament expressed regret that after four years of investigation the Commission has not shown any demonstrable results in the case itself or the allegations of the preferential treatment of its own services in displaying results of search queries, stating that “in order to be credible in the digital agenda, the Google case urges to be solved”.
“I’m not pointing the finger against Google itself but against the fact that negotiations are lasting too long. It’s four years since the Commission has taken initiative after initiative but nothing’s relay going on. I’m not seeking to put Google in the dock, but we have seen several initiatives and four years passed and we have to resolve this case. The credibility of the Commission’s digital agenda is on the line, if it fails to ensure that competition infringements in fast-moving and dynamic digital markets are tackled swiftly” so Mr. Messerschmidt about his report.
Margrethe Vestager EU Commissioner in charge of competition policy who took over this politically charged case in November, following nearly five years of investigation by former Competition Commissioner Joaquin Almunia, outlined the situation in the following way: “In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service in breach of EU antitrust rules.” Given the outlined situation, the Mountain View, California based company will have ten weeks of time in order to advocate their case, having “the opportunity to convince the Commission to the contrary. However, if the investigation confirms our concerns, Google would have to face the legal consequences and change the way it does business in Europe”.
Replying to the critics, accusing the EU of taking a protectionist stance against the US tech industry: “In all of our cases (concerning competition policy), the nationality of the enterprises involved is, and will remain, indifferent to us. Our mission is to make sure that every company operating within the EU, does it respecting our policies”. The fact that many of the firms that have complained to Brussels in order to challenge Google’s business practices in Europe are themselves US companies, should also be seen as an important signal.
On the newly opened Android investigation instead: “I have also launched a formal antirust investigation of Goggle’s conduct concerning mobile operating systems, apps and services. Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company,” so Ms. Vestager.
Sanctions:
Concerning issues of European Competition Policy, it’s the European Commission who has the major say with the power to apply sanctions up to 10% of the company’s annual sales. In this case, concerning the Google issue, if the American tech giant will be judged guilty, the European Commission will have the power to apply a fine up to 6.2 billion euros.
Moreover if the Commission finds that companies are abusing a dominant market position, the EU regulator can also demand wide-ranging changes in the way a Company does its business in Europe
When asked if really ready to fine a tech giant such as Google, Ms. Vestager explained that “it is very important that every road is open- first when it comes to commitments but also when it comes to the other road, at the end of which is a fine.”
Reactions:
In its first reaction, the American tech giant stated that it strongly disagreed with the EU’s statement of objections, emphasizing the fact that, on their opinion, during the last years its products have fostered competition, benefitting consumers as well. “While Google may be the most used search engine, people can now find and access information in numerous different ways—and allegations of harm, for consumers and competitors, have proved to be wide of the mark”.
“Our free operating system for mobile devices has been a key player in spurring competition and choice, lowering prices and increasing choice for everyone (there are over 18,000 different devices available today)” so the Mountain View, California based company concerning the Android issue.
Ramon Tremosa i Balcells (ALDE), very active on this dossier since the beginning stressed the fact that during the last years many European S&M enterprises went bankrupt causing damage to European consumers. From a Single Digital Market perspective, the aim of Competition Policy should be to “establish an open market that contains and warrants the same opportunities for everyone”. “The Google issue is not a question of taxation, we need to assure a level playing field in the European market, assuring companies to equally compete in the market, and avoid Google to monopolize the market in the next years.”
Morten Messerschmidt MEP, author of the European Parliament’s recent annual Competition report, said: “Finally we are seeing some life in the Commission’s Competition directorate. Despite four years of investigations we have seen few clear results or actions by the Commission to allow all digital businesses to operate on a level playing field. The Commission has now showed its teeth, and it must now work swiftly with Google to resolve this case and create an open and fair Internet search marketplace.”
Monique Goyens, general manager of BEUC, an associate member of the International Consumers Organisation aiming at representing and defending the interests of all Europe’s consumers at the European level, stressed the importance of Google treating all the online services, including their own and not just Google Shopping, following the same standards and practices, without discrimination to put it simple.
“Even Uncle Google must play fair”, German lawmaker Manfred Weber, floor leader of the largest conservative group, said: « Internet is not the Wild West – there are rules on the web that must also be respected. »
Patrick Zingerle
To know more:
-. EU-LOGOS, “COMPETITION POLICY: ‘IN ORDER TO BE CREDIBLE IN THE DIGITAL AGENDA, THE GOOGLE CASE NEEDS TO BE SOLVED’.”http://europe-liberte-securite-justice.org/2015/03/17/competition-policy-in-order-to-be-credible-in-the-digital-agenda-the-google-case-needs-to-be-solved/
-. Dossier GOOGLE des articles de Nea Say http://www.eu-logos.org/eu-logos_nea-say.php?idr=4&idnl=3500&nea=156&lang=fra&arch=0&term=0