Google’s too strong, Europe’s too weak?

Google has a dominant position in providing general online search services throughout the European Economic Area (EEA), with market shares above 90% in most countries of the area. Following complaints by search service providers about “unfavorable treatment of their services in Google’s unpaid and sponsored search results,” the European Commission (EC) decided in November 2010 to open an antitrust investigation into allegations that Google Inc. has abused a dominant position in online search, in violation of European Union (EU) rules. The EC repeatedly sought feedbacks on commitments offered by Google to address competition concerns and four years later obtained from Google comparable display of specialized search rivals. Only the third and last proposal by Google to former EC Vice-President responsible for Competition Policy Joaquin Almunia prevented Google and the EU from entering years-long adversarial proceedings.

Instead Google accepted “to guarantee that whenever it promotes its own specialized search services on its page, the services of rivals will also be displayed in a comparable way,” Almunia said. However the move did not end the antitrust investigation since the EC has just sent a Statement of Objections to Google outlining the Commission’s preliminary view that the company is abusing a dominant position, “by systematically favoring its own comparison shopping product in its general search results pages in the EEA.” Although there is still a chance for an amicable agreement, “if the investigation confirmed our concerns (of unfair advantage), Google would have to face the legal consequences and change the way it does business in Europe,” Almunia’s successor Margrethe Vestager warned.

Google, which can count on US President Barack Obama’s support even though the White House recently declined to comment, could be risking a penalty up to $6 billion – 10 percent of its annual sales – and has 10 weeks to officially respond to the allegations. This case is as complex as significant for the future of Europe’s web economy. On the one hand, one could affirm Google has become such a dominant actor that limits have to be set because the absence of such limits hindered the emergence of any genuine competitor. On the other hand, one could reply that Google, thanks to its never-ending cycle of innovation and a favorable context encouraged by the business development-savvy US government – the very eco-system that the EU may be lacking for a strong competitor to grow – has therefore justly outdone all its European rivals. Either Google is too strong and the EU is too weak or Google is too unfair and the EU is too fair. Settling legal cases like Google’s clearly and comprehensively should, in any case, become a pre-requisite for any future sustainable agreement on the Transatlantic Trade and Investment Partnership (TTIP).