Time to bring Google Shopping case to a close
Despite this week's €1.49bn fine by the European Commision, more needs to be done to help European businesses compete against online search giant Google, argues Ramon Tremosa i Balcells
Photo Credit: PA Images
We can easily see that the Internet has changed the world but it takes more effort to see how Google has changed the Internet.
As Google expanded from being an internet search engine, it attracted controversies and legal challenges. Today, clearly, Google is the gateway to the Internet. Google search engine has over 92 per cent of market share in most EU Member States.
Certainly, there are other technology giants with their own stories and problems but Google stands out, at least in Brussels, because of the scope of the issues it faces.
More than 18 months ago Google’s abuse of its power in online shopping resulted in a €2.42bn fine from the EU. By promoting its own shopping comparison service at the top of its own search results, Google had crossed the line between being dominant and breaking the law.
Commissioner Vestager told Google it had 90 days to change its ways or face further penalties. "What Google has done is illegal under EU antitrust rules," she told the world. “It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation.”
Over 500 days later it is hard to see that Google has done enough to avoid further action.
According to the few companies that have, so far, survived Google’s abuse of dominance, the market has further deteriorated. The “point of no return” is plainly visible for what is left of Europe’s once prosperous and vibrant shopping comparison industry.
Only market-correcting remedies will make any difference at this stage. Huge tech companies like Google can pay even billion euro fines, and trust in Google’s good faith must have been undermined by its attempt to propagate what amounts to fake shopping comparison sites in order to give the impression of new competitors entering the market.
"Only market-correcting remedies will make any difference at this stage. Huge tech companies like Google can pay even billion euro fines, and trust in Google’s good faith must have been undermined by its attempt to propagate what amounts to fake shopping comparison sites in order to give the impression of new competitors entering the market"
Google has played the European regulatory system to buy time and keep making money. This case started in 2010 and, given the speed of technological and business evolution in the digital world, time is almost up.
Google’s right of defence has been fully respected together with that of its numerous lawyers. The technology giant has had its chance to genuinely change its ways. The European Commission now faces a stark choice: follow-up on the good work done so far or hesitate and allow the remnants of the shopping comparison industry to wither on the vine.
I’ve already gone on the record to say that technical solutions can stop Google’s abuse without disrupting online shoppers or merchants. A rotation mechanism on the shopping search results page itself could allow the appearance of Google and its competitors. Google would be unable to exploit its search algorithms while users would get greater choice and relevant results.
Indeed, this approach would suit today’s mobile devices, perhaps rebooting the consumer-focused innovation in shopping comparison that died away once Google began to dominate the sector.
If the Commission feels the need, then other more radical options are still on the table. There are, for example, voices calling for the “unbundling” of Google’s various services, breaking up a tech giant that has problems not just in shopping but also in areas such as Android and AdSense.
As Nobel Prize winning economist Professor Jean Tirole said in January, “a structural policy, breaking up tech giants such Facebook and Google” is a valid option. Separating Google’s search engine from its other numerous services could be an option of last resort.
For the clearsighted Commissioner Vestager these problems and solutions are already more than evident. Her teams have been working long and hard on the competition challenges Google poses in Europe. Their focus has been relentless over the last four and half years.
The task of bringing this work to a close now largely rests with the Commissioner in what remains of her term. Only she can finish the job and, finally, give European companies a fair chance to compete in our evolving digital single market. In Vestager I trust.
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