Google deals with the French trustbusters
AOTHER DAY, another big tech antitrust case. In May alone, the District of Columbia attorney general filed a lawsuit against Amazon, the German competition authority sued Amazon and Google to determine whether they were “of paramount importance to competition in the markets.” and its Italian counterpart hit Google with a sum of 100 million euros. ($ 122 million) in fines for restricting access to Android Auto, a version of the company’s mobile operating system for cars.
And the pace can pick up. On June 4, the UK Competition and Markets Authority (CMA) and the European Commission, EU, has launched parallel surveys to see if Facebook is using the data it collects to give itself an unfair advantage in online advertising. On the same day, German trustbusters opened another case over whether Google was promoting its new “News Showcase”, an organized collection of newspaper articles, in its search results. And on June 7, the French competition watchdog announced that it had reached an agreement with Google over allegations that the company was abusing its dominant position in the market to serve ads online. Google will pay a fine of 220 million euros and change some business practices.
Regulators are partly responding to political winds. “They can’t go wrong with big technology,” says Justus Haucap of the University of Düsseldorf. America saw a wave of tech-related cases last year, when the Justice Department launched one against Alphabet (Google’s parent company) and the Federal Trade Commission sued Facebook in concert. with state attorneys general. But other dynamics at work suggest that such cases will become even more frequent.
On the one hand, competition authorities are increasingly competing with each other. First in America and now in Europe, everyone wants to leave a mark in technology regulation, observes Thomas Vinje of Clifford Chance, a law firm. the CMAThe new Digital Markets Unit needs to make a name for itself. Andreas Mundt, who heads the CMAits German counterpart wants to make its agency a pioneer in antitrust technology. The new national affairs are also an attempt to counter a takeover by the European Commission, which the EUThe digital markets bill would leave competition policy in charge.
All this muscle flexing also points to a “big pivot” in competition policy, says Cristina Caffarra of Charles River Associates, a consultancy firm – from “ex post” antitrust lawsuits, filed after the fact, to “ex ante” rules that restrict digital. companies from the start. The new German competition law, which entered into force in January, was the first to enshrine this approach in law; The German cases against Amazon, Google and Facebook make use of it. the CMAThe digital unity is expected to follow a similar path if the UK Parliament approves the necessary legislation. If the EUThe Digital Markets Act becomes law, big technologies will have to comply with a long list of ex ante rules.
All of this can lead to trustbusters, especially in Europe, to rely less on a few large surveys and more on a multitude of smaller ones, which is akin to regulation in older industries, in other words. terms. Regulators will act quickly if they think the tech giants have done (or are about to do) something untoward. The hope is that companies then think twice before expanding their digital dominance by bundling an old product with a new one, for example, or using data collected elsewhere to promote their own services.
Don’t hold your breath. In the French case, Google has agreed to make life easier for its competitors, for example by improving access to data. But this is unlikely to diminish its dominance in ad technology. Investors in big tech stocks ignored the antitrust attack. The likely outcome – a constant back-and-forth between companies and regulators – is tolerable for everyone.
To see why, consider an elder EU case against Google. Three years ago, the European Commission fined the company 4.3 billion euros and forced it to unbundle its search service from its Android mobile operating system. Buyers of new smartphones were presented with a ‘choice screen’ of alternative search services, which wanted to be displayed prominently. The winners didn’t attract a lot of users, most of whom still preferred Google. On June 8, the commission said the screen of choice would instead rank search services based on their market share, hardly an antitrust revolution. ■
This article appeared in the Business section of the print edition under the headline “New Rules of the Road”