Wednesday, 28 June 2017

Google misuses market dominance

Do you automatically think if you want to produce an online street map? I suggest that most people (including myself hitherto!) simply type in a postcode or street name to their browser and are automatically directed to Google maps. For that reason, Streetmap.EU Ltd's commercial director, Kate Sutton, went to the High Court in 2016 to seek a ruling against the multi-national giant, but was disappointed.

Now the European Commission has after lengthy deliberation come to a different conclusion over Google's misuse of its market dominance. The EC found that it unfairly favoured its own comparison shopping service over rivals in searches and fined the US behemoth €2.42bn.

The story is not over. Google may well appeal against the decision. Its main plank has been that the EC ruling "stifles innovation". This image of a nimble start-up trying to break through with a flash of mathematical insight may have appealed when Google was founded, but Alphabet (the parent company) is now as far removed from that in terms of capitalisation as the Ford Motor Company is from the Model T. The EC's spokesperson has already squashed the argument:
Commissioner Margrethe Vestager, in charge of competition policy, said: "Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.
What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."
One of my reasons for wanting the UK to stay under the EU umbrella is just such resistance to large multi-national companies which is much more difficult for individual nations to maintain. EC antitrust rulings (one recalls a similar decision against Microsoft misusing its dominant position in the OS market) also rebut the view of socialists like Jeremy Corbyn that the EU is just a capitalist club.

1 comment:

Frank Little said...

Liberal Democrats also contrast the UK's tax treatment of Google. Another thing the EU does is to reduce the opportunities for financial interests to play one national administration off against another. One might be drawn to the conclusion that this is why so many Conservatives are attracted to Brexit.