Thursday, November 26, 2015

European Union and Google Get Ready To Rumble

The European Commission has been accusing Google of using its dominant web position for several years and is investigating its many online services. Things seem to be coming to a head however.

(EU's Big Clunking Fist heading towards Google: (image source)

On April 15th the European Commission sent a “statement of objections”, an indictment of sorts, to Google, accusing it of abusing its dominant position in the internet-search market and reviving an antitrust case that has dragged on for five years. A day earlier G√ľnther Oettinger, the European Union’s digital commissioner, gave a speech arguing that it was necessary to “replace today’s web search engines, operating systems and social networks.”

Earlier this month (November 2015) however, in a document leaked to The Wall street Journal,Google said it had taken measures to preempt the lengthy antitrust probes currently being carried out by the European Commission. Oddly, that approach failed.

Speaking at the EU's Internal Market sub-committee, Adam Cohen, head of competition and economy policy for Europe, Middle East and Africa for Google, said: "We did take that approach with the European Commission in 2012, we made a set of voluntary measures designed to address the core areas of this case that would speed things along – and that was unsuccessful," he said. Cohen gave no clues as to what those exact measures were.

The part of the EU's investigations that has generated most press coverage is the EU Commission's accusation that the internet giant has abused its market position for internet search services by systematically skewing results towards its own shopping comparison product in its general search results pages.

However, Cohen, with arrogance typical of a silicon valley senior executive was dismissive of the EU process. "When regulators stop talking about you it might be a sign that you are less successful. Big successful companies are open to scrutiny and should let the facts speak for themselves."

According to a hefty legal response to the allegation, reported by The Wall Street Journal, Google said in typically verbose, convoluted and obfuscatory language, there is “no basis” for the claims.

It said: “The theory on which the [EU’s] preliminary conclusions rest is so ambiguous that the Commission itself concluded three times that the concern had been resolved,” Google’s lawyers wrote in the document."

The EU decided that the commitment to openness made in the document was in fact insufficient, and that Google needed to offer more.

'If the Commission decides to end the commitment process it must provide reasons for the change in position,' the Google document says, arguing that the EU 'has not provided substantiated reasons as to why it found the previous commitments insufficient.' Google now contends that the demands of EU regulators amount to 'a demand that [Google] sacrifice quality to subsidise competitors'.

The response also calls into question the legal grounds upon which EU officials are demanding that Google changes its search algorithms to treat comparison-shopping competitors equally in search results. Google has argued that the EU would need to show that the results are essential as a public utility in order to place the charges within a legal framework for the duty to supply. However, the response states that the charge sheet 'does not (and cannot) establish the legal conditions for such a duty.'

It now looks as if Google's legal manoeuvreing has been blocked by the EU and hearings will begin early next year.


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