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Fast and hard

14 July 2016 By Robert Cyran

The European Commission has hit Google with a third antitrust charge. This time it says the tech giant abused its search dominance on third-party websites. It also reinforced a claim, first made in 2010, that Google favored its own shopping service. A speedier, more focused campaign would better serve justice.

The newest charge hits closest to the heart of Google’s empire. The company makes about 90 percent of its revenue from advertising. The commission claims Google acted anti-competitively by forcing onerous contracts on companies that used its search service on their sites. For example, a newspaper would use this service to let readers search its archive or a retailer would allow shoppers to look for merchandise. These partners were obliged to prominently place a minimum number of ads served by Google, and forbidden from using rival search firms to place ads.

Google’s 80 percent share of this market gives it plenty of power to act abusively. These contracts, as well as provisions requiring third parties to receive Google’s approval before making any change to the display of competing search ads, skirted the line and may have overstepped it.

The commission is confronting Google on other fronts. It accuses the company of forcing handset manufacturers using its Android operating system to install Google apps and bundle services and apps together. That’s a potentially strong case, as similar behavior landed Microsoft in trouble.

Then there’s the charge that Google favors its own comparison shopping services. The commission has now added more evidence to its underwhelming claims. There’s little evidence consumers were harmed and it’s a minor service for the search giant. Yet regulators have pursued this charge since 2010. The newest charges add yet more time to the clock, giving Google another eight weeks to reply.

That’s a long time considering the speed with which the tech market shifts. Facebook has tripled its active users and multiplied its revenue ninefold during the commission’s inquiry into Google’s shopping service. Regulators need to be thorough, but hit companies fast and hard with strong charges aimed at the heart of abusive business practices. The commission’s slow and scattered approach is an ineffective method of curbing tech monopolies.

 

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