November 4, 2016
– Google has sought to blunt the European Commission’s three-prong inquiry into its business practices – by claiming the Eurocrats don’t understand antitrust law.
Writing on Google’s corporate blog, senior VP and general counsel Kent Walker disclosed that Google has responded to the Commission’s shopping and advertising concerns, and will soon file its response to the Android portion.
Walker says the historic shopping investigation – that’s the one Commissioner Almunia tried to settle mutually but couldn’t – failed to take into account the market power of Amazon.
Google had introduced its own comparison shopping engine “Shopping,” demoting rivals. The EU had argued that Amazon couldn’t be considered a rival, because it sometimes paid shopping comparison sites for referral traffic.
“All of these services – search engines, price comparison sites, merchant platforms, and merchants – compete with each other in online shopping. That’s why online shopping is so dynamic and has grown so much in recent years,” Walker writes.
Amazon has some element of price comparison, but comparison sites like uSwitch, PriceRunner and Kelkoo come readily to mind as rivals to Google’s Shopping.
Competition Commissioner Vestager declined to accept the settlement her predecessor Almunia had tried to thrash out with Google, which would have forestalled a formal Statement of Objections, and she pressed ahead in April 2015. Twelve months later, Vestager opened up a new front, saying Google used its Android platform to exclude rivals in maps and search, via its contracts with phone makers
The phone makers were so reluctant to answer the Commission’s queries about Android that investigators had to threaten them with fines if they didn’t talk.
“We believe it is the European Commission that has the interests of consumers in mind, not a private company that makes money by using its market power to charge high prices to advertisers. When consumers look at Google ads they do not get the best, most relevant results. Instead, they get results from advertisers willing to pay Google the most money.”
Vinje noted that the anti-consumer actions by Google are so serious that the umbrella consumer organization for Europe, BEUC, filed a complaint against it with the European Commission – the first anti-trust complaint they ever filed.
Last week FairSearch noted, tartly, that: “Google may actually believe it’s a force for good in the world. Most monopolists believe this about themselves. They believe everyone is better off by virtue of what they perceive as the benevolent use of their vast power.”
Vinje added, “Google is more powerful than Microsoft ever was. It occupies a more central position in the economy and in people’s lives, and the exercises of its vast power cause more harm than Microsoft’s did.”
Vertical search pioneer Foundem – which split from iCOMP last year – pointed out that: “[Google’s] protestations about the flourishing fortunes of Amazon and eBay remain the red herrings they have always been. Google does not (yet) have an eCommerce, auction, or merchant-platform service that competes with Amazon or eBay. Therefore, Google does not (yet) have any incentive to anti-competitively penalise Amazon or eBay in its natural search results, and it does not (yet) have any competing service of its own to anti-competitively favour.”
(By Andrew Orlowski)