You might remember learning about the U.S. “Bust the Trust” movement in the early 1900s.
Google now faces similar antitrust claims in the EU regarding its Adsense and other service pricing.
How will this affect your everyday Googling?Google Busted for Antitrust Complaints in EUClick To Tweet
Google is as ubiquitous as air these days, so it is no surprise that certain business practices have fallen under scrutiny.
This is due to accusations of using their own products and programs to unduly influence price in a variety of ways.
For more than six years, Europe’s Competition Commission has investigated charges against Google regarding influence and favoritism. The formal Statement of Objections (lodged in April 2015) expanded to include Adsense in July of this year.
EU Google Antitrust Case: The Fall of Google?
Among the accusations, Google is charged with exploiting its own services to affect not only pricing, but search results. Competition commissioner Margrethe Vestager said this in July:
“We have further strengthened our case that Google has unduly favoured its own comparison shopping service in its general search result pages.
“It means consumers may not see the most relevant results to their search queries. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation.”
To make matters worse, other companies such as Nokia, Oracle, and Microsoft lodged a complaint with the EU, as well. They accused Google of utilizing the Android OS as a “Trojan Horse” in an anti-competitive strategy. At the time of the complaint, the EU had already been investigating this matter.
Just What is “Undue Influence and Favoritism”?
You may have heard the terms “nepotism”, “cronyism”, or just “favoritism” tossed around.
All of them vary, but they include one central factor: bias.
In the case of Google and the EU, Google is accused of exerting influence over its own products to gain an unfair advantage and decrease competition in Europe.
Specifically, the three complaints point to influence over Google Shopping, price comparisons, as placement, Adsense, and the Android OS as a “Trojan Horse”. Think of it like a boss giving a relative preferential treatment at work . . . except this entails millions of people and potentially great losses in revenue.
Despite no formal response to the Android OS complaint, Google has discussed the other two issues. Regarding Google exploiting its own search engine to influence results, general counsel Kent Walker said this:
“There is simply no meaningful correlation between the evolution of our search services and the performance of price comparison sites. Meanwhile, over those same ten years, a rapidly increasing amount of traffic flowed from our search pages to popular sites like Amazon and eBay as they expanded in Europe, hardly a sign of our ‘favouring’ our own ads.”
Another claim against undue influence on behalf of Google is the increase in the use of dedicated apps. Many people use proprietary apps to shop at places such as Amazon, Sephora, and other major retailers.
Walker even points out a price comparison tool used exclusively at Amazon as evidence against undue influence. As for Google Ads, Walker claimed that there has always been robust competition in that field.
How Could This Affect You?
With Google vehemently opposing the complaints lodged against the company, the consequences for failure could be dire.
If found in breach of European competition law, the EC could fine Google up to 10%–or $7.5 billion USD. The issue also comes in how Google reacts to the tech complaints lodged against it. If they are found guilty of exploiting their own products, how can technology combat this?
Walker also asserted in his rebuttal that, by referring consumers to price comparison aggregators, Google would be “subsidizing websites that have become less useful for consumers”. There is already evidence to support this claim. This could be two steps forward or one giant step back for tech.
If the EU does sanction the tech giant, what does that mean for other Google projects like autonomous cars?