The Fatal Flaw of the EU’s Big Tech Attack
Benjamin Franklin, known for successfully rebelling against a king and flying kites in thunderstorms, once said, “There has never been a good knife made of bad steel. He knew that the substance of things matters in order for them to work as intended. EU digital markets law is a stab at the heart of Google and other big tech companies that have already been convicted and fined for crushing competitors in their respective markets. But its steel, its legal substance, risks being fatally weakened by the flawed recourse of Google Shopping.
In 2017, Google was fined 2.4 billion euros for abusing its dominant position in search engines in order to crush its competitors in the purchase price comparison. Google has appealed and the European Court is due to rule on this appeal on November 10, 2021. The huge fine and Google’s name recognition will guarantee the appeal some headlines, but in many ways it is about a sideshow of what really matters, which is to stop Google from repeating its behavior in the future and to protect European consumers.
WATCH THE VIDEO BELOW TO LEARN MORE ABOUT GOOGLE SHOPPING CHECKOUT
Along with the fine, Google was required to change or correct its behavior. Remedies in situations like this can be complicated, but the one in the Shopping case clearly isn’t working because it actually makes it easier for Google to abuse what’s left of the competition. 130 companies and 28 industry associations made this clear in a letter to Margrethe Vestager, Executive Vice-President of the European Commission. This problem could undermine Brussels’ efforts to curb big tech, because, although the court finds that Google has been rightly punished for its abuses, the non-functional remedy has failed to restore competition.
How could this happen? Well, Google was so determined to destroy an industry focused on consumer choice that it unsurprisingly created its own remedy to its advantage. Over the past 10 years of battling Google, we have witnessed its endless delaying tactics and attempts to distract from issues with irrelevant data and technical details. The comparator market continued to weaken as the European competition watchdog (DG COMP) made its way through a minefield created by Google. And, in our opinion, Google is unlikely to change its tactics anytime soon, continuing to buy time while crushing its competition.
“If the European Commission wins the Shopping appeal and does not reconsider the appeal, then things will go from bad to worse”
If the European Commission wins the Shopping appeal and does not reconsider the appeal, then things will go from bad to worse. I suspect Google will call again and continue to use its own remedy to exploit the remaining competition. DG COMP must quickly assess the lay of the land and, this time, intervene vigorously with enforceable remedies – created in collaboration with the companies concerned. It must not allow the blocking and harassing of Google lawyers and lobbyists whose sole purpose, in our opinion, is to delay, delay and delay. Europeans risk having no choice but to compare prices. If they want to know how much something costs, they’ll have to ask Google, which will tell them for free while charging sellers a pretty dime to appear at the top of Google’s search results.
“Don’t be mean” isn’t a motto, but “Go fast and break things” might have some resonance. Give big tech a long enough time and there will be no real competition, no real choice for consumers, and no real pressure to keep prices low or to innovate. Sure, it can be tempting to focus on new cases that you have a good chance of winning, but the Google Shopping case, if not honored, could tarnish Vestager’s legacy.
“Give in to big tech long enough and there will be no real competition, no real choice for consumers and no real pressure to keep prices low or to innovate.”
The Digital Markets Law has been touted as a chance to raise the bar, restoring competition to digital markets everywhere. However, the power of this legislative fix is intrinsically linked to the ability of DG COMP to ensure that its remedies actually work in antitrust cases. Jurisdictions like Turkey have shown that real change can be achieved against Google if there is the political will to act. Europe once ruled the world by revolutionizing technological regulation and showed the world what was possible. If he wants to regain this leadership, he will have to show real steel and close his unfinished business with the Google Shopping remedy.
This article reflects the views of the author and not those of The Parliament Magazine or The Dods Group