It’s EU vs. Google for real: the time is now, the case is open

Press conference by Margrethe Vestager, Member of the EC, on the Statement of Objections to Google on comparison shopping service and the opening of a separate formal investigation on Android (EC Audiovisual Services, 15/04/2015)

Press conference by Margrethe Vestager, Member of the EC, on the Statement of Objections to Google on comparison shopping service and the opening of a separate formal investigation on Android (EC Audiovisual Services, 15/04/2015)

As anticipated by the European Sting in a latest Sting of the day last week on Google’s antitrust case in Europe, the European Commission did take finally formal actions and filed a complaint against the Northern American tech giant, alleging the company’s search results unfairly favoured its own shopping services over third-party sites.

The antitrust charge followed a five-year investigation by the EU against the company and marks the beginning of a formal legal process which might take Google “to face the legal consequences and change the way it does business in Europe”, as said EU’s Competition Commissioner Margrethe Vestager in an official statement released last Wednesday. In a few words, it could ultimately lead to billions of euros in fines to the Mountain View, California-based company, some €6 billion or roughly 10 percent of Google’s operating revenue.

Unfair advantage

Commissioner Vestager, who took over the post last November, declared in a statement: “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. Google now has the opportunity to convince the Commission to the contrary”. That’s pretty clear. The American giant, for its part, replied almost immediately last week that it strongly disagrees with the charges, saying any allegations of harm to consumers or competitors was “wide of the mark”. Google is proclaiming it’s been following European law and proving to be a good, rather than evil, influence in the European mobile device market.

More businesses to be examined

Mrs. Vestager is currently examining other businesses in which Google faces similar complaints, like travel (Tripadvisor’s CEO is quite interested in this topic) and local services, and she added that Google Shopping case was a top priority when she took the post as Europe’s top competition watchdog last November. “It was my option that we should move forward here instead of waiting,” she had said.

No safe Android

The Commission has also formally opened a separate antitrust investigation on Google’s conduct regarding the mobile operating system Android. Commissioner Vestager reportedly said that the EU would work with various companies, including Google, to investigate the allegation. The investigation will focus on whether Google has entered into “anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices”, as claimed by the European Commission through official channels.

Thus the Commission’s aim here is to determine whether Google is using its position to discourage the inclusion of rival applications into Android-based phones. Google has 10 weeks to respond to the charges.

Google’s big business in the EU

Google is more widely used in Europe than in the U.S., raising antitrust concerns for European regulators for half a decade at least. Google accounts approximately for 90 percent of the search engine traffic in the Old Continent, according to StatCounter data research firm. Digital research firm Statista, on the other hand, has shown how the situation in the USA is quite different, with Google handling “only” the 64.4 percent of the search engine traffic as of last January.

Google “skipped” the bullet in its own home pitch in early 2013 though, when the Federal Trade Commission (FTC) in the U.S. closed an antitrust investigation of Google in early 2013 but dropped charges shortly after. The Californian tech giant basically avoided the opening of an official case by making some concession and voluntarily loosening its advertising and patent licensing policies.

EU’s Anti-American mode on?

US critics now say the EU is being overselective in pointing the finger towards Google and other American companies, including Microsoft – the target of an investigation some ten years ago – Apple, Facebook and Amazon with the result of producing an unfair competition itself, which will unavoidably hit and shape the market.

The general feeling at the other side of the Atlantic is basically that some kind of “organised action” against American companies is being actioned by the EU watchdog. Commissioner Vestager, for her part, almost immediately said she wants to keep geopolitics off the table. “I will do my best to make sure that it is not politicized, the Google case, and that it’s not entangled in other issues,” she argued.

An impartial European watchdog?

US companies are often involved in antitrust and competition-related cases in the EU, and that’s so true. But that may be happening because of Silicon Valley’s dominant position in the IT sector, and also because of the size of those companies with enormous turnover and business units, evolving into dominant predators in a good mature market like the European one.

But what about European companies? How does the EU watchdog handle its own thing? Is the EU as strict with her own companies as she is with the foreign ones? A recent report published may help cast light on that direction and indeed provides a quite a clear-cut answer: No. The EU is way stricter against the European companies! It shows indeed that European companies were fined more often than their American counterparts.

Numbers tell the truth

The report edited by the Peterson Institute for International Economics for the European Commission, was published on 16 April  2015 and it was basically authored to support the speech of Commissioner Vestager in Washington DC on 17 April . The document reports that between 2010 and 2014 the European Commission adopted 30 cartel decisions involving 231 companies and imposed fines of a total €8.9 billion. Out of those companies, 190 were European and have received fines for a total € 4.8 billion – just over half of the whole cake. Only 17 companies among them were US-based companies, which received fines of a mere €652 million – about 7% of the total.

“Indifferent to nationalities”

“In all our cases, we are indifferent to the nationality of the companies involved”, underlined Ms. Vestager through the report. “Our responsibility is to make sure that any company with operations in the territory of the EU complies with our Treaty rules”, she added.

A matter of credibility

Google case brings once again the delicate matter of the liberty of action in the markets under the spotlight, and the importance of an independent watchdog. This last point should be the key point for the consumer, which has to be eager for a developed, free IT market, but also for impartiality.

In a few words, the consumer’s biggest hope should be that what is contained and proudly declared in the European Commission’s report proves to be eventually 100%t true: “The authority and credibility of competition enforcers anywhere in the world depend on their independence, on the quality of their work, and on impartial, consistent and balanced decisions”.

The case is open and we will be watching.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

The EU Commission predicts a decimated growth in the next years

Deutsche Bank: the next financial crisis is here and the lenders need €150 billion from taxpayers

Catalonia’s vote for independence and the power of symbols

G20 LIVE: World Leaders in Turkey for G20 Summit. Global Economy will be discussed in Antalya

Brexit: when the hubris of one man can set the UK, the EU and the entire world on fire

Yes, together we can make a change! YO!Fest and EYE 2016

daniela-runchi-jade-president__

A Sting Exclusive: “Education in Europe, fostering skills development inside and outside the school system”

EU to lead one more fight against climate change at G7 summit

China invites the EU to a joint endeavor for free trade and order in the world

Landmark EU Parliament – ECB agreement on bank supervision

EU Council: The US airlines may freely pollute the European air

Hostages to a rampant banking system

Eurozone in trouble after Nicosia’s ‘no’

Fighting for minds of youth in Latvia

The Monetary Union drives Europe into dangerous paths, CoR demands an EMU of regional content

COP21 Breaking News_04 December: Launch of CREWS, climate risk & early warning systems

One more country to test the EU project: Kaczynski’s Poland

MWC 2016 LIVE: Intel focuses on 5G “beyond the Powerpoint”

Greece @ MWC14: Greek-born mobile champions at MWC 2014

Do the EU policies on agro-food smell?

EU Commission: Once in every 20 beef meals you eat…horse probably with drugs in it

G20 World Exclusive Interview: “The world, especially emerging economies and developing countries, require a more sustainable and quality development”, the Spokesperson of Japan underscores live from Antalya Turkey

EU’s social crisis and unemployment to deteriorate

Did Draghi ask the Germans to accept a drastic change of austerity policies?

The Eurogroup protects Germany and blames others

The British “nonsense”, the relaxed Commissioner and the TTIP “chiaroscuro” at this week’s Council

On Google antitrust case: “Let’s face it, some companies want to hurt Google and it goes as simple as that”

Appreciation of euro to continue

Teamgum @ TheNextWeb 2014

No end to Deutsche Bank’s problems: new litigations in the US and frailty in EU stress test

Commission Vice-President Rehn exaggerates Eurozone’s growth prospects

A Sting Exclusive: “Doing ourselves a favour”, Vice President Dombrovskis underscores that this time growth has to come from within the EU

Volkswagen getting away with it in Europe

EU: Divided they stand on immigration and Trump hurricanes

Is the European Banking Union an impossible task?

The ECB proposes a swift solution for SMEs’ financing

WEF Davos 2016 LIVE: “Chinese economy has great potential, resilience and ample space for policy adjustment”, China’s Vice President Li Yuanchao reassures from Davos

Marco Polo’s Dream

No agreement in sight on EU budget

ECB readies itself for extraordinary monetary measures defying Germany

A Sting Exclusive: “One year on from the VW scandal and EU consumers are still in the dark”, BEUC’s Head highlights from Brussels

Do you dare to go to China?

The West definitively cuts Russia off from the developed world

What happens when the Eurogroup decides to help Greece


Re-thinking citizenship education: bringing young people back to the ballot box

At last a good price for the Greek debt!

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

Community Manager – 1289

MWC 2016 LIVE: BT chief aims to be at UK 5G forefront

Can We(esterners) ever understand (the) Chinese

Has Germany rebuffed ECB on the banking union?

Parliament votes reform for better European Co2 market but critics want it sooner than later

Royal Navy to unveil future surveillance and reconnaissance requirements next February in Rome

€5 billion of EU energy efficiency project money spent on “comfort”

An ECB banker wants to change the European social model

Tax evasion and fraud threaten the European project

Five years down the drain

ECB: Growth measures even before the German elections

Unemployment and immigrants haunt the EU; who can offer relief?

WEF Davos 2016 LIVE: “CO2 is not the problem, it is the symptom”, the pilots who crossed the world using solar energy cry out from Davos

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s