EU's New Competition Chief Could Shake Up Google Antitrust Case
In Europe, Google has avoided the prospect of steep fines in a long-running antitrust case over several of the company's business practices, but a new commissioner will soon take over the case, and that has many wondering what Google could face next.
Nearly 20 companies have filed antitrust complaints against Google in Europe since 2009. The biggest of those by far is Microsoft, which has its own competing search engine, Bing.
"Microsoft has been driving these complaints from the very start," says Florian Wagner-von Papp, an expert on EU competition law at University College London. "Over here in Europe, Google has an enormous market share. Over 90 percent of all searches on the Web go via Google." (That's more than in the U.S.)
Shivaun Raff owns Foundem, one of the companies suing Google. Foundem compares prices for things like televisions and other electronic equipment. If you've never heard of Foundem, Raff says that's because of the way Google presents information when you search for something online.
"Google is manipulating its search results to increase its profit," Raff says.
She says Google does that by promoting its own price comparison services — like Google Shopping or Google's hotel and flight comparison services — while demoting competing companies like hers in its search results.
For example, if you're looking for a Canon digital camera, Raff says, Google's results yield "big links to Google's price comparison service that actually prioritizes which links it shows first by which advertisers pay Google the most."
And as Raff scrolls down in the Canon search results, no other price comparison site — like, say, her price comparison site — appears in the first page of Google's results.
"As you can imagine, that's an extraordinarily powerful technique that siphons vast quantities of traffic to Google's own services and that is crushing competition," she says.
An About-Face
Google was cleared of similar antitrust allegations in the U.S. last year, but in Europe, Google's practices are seen as a potential abuse of its dominance. It's been forced to submit three rounds of proposed changes to its search engine. Earlier this year, outgoing EU competition commissioner Joaquin Almunia appeared to have reached a deal with the company.
"I believe today that Google's new proposals are capable of addressing the competition concerns I set out today," Almunia said.
In its proposal, Google agreed to display links to rival services alongside its own search services. But the commissioner has since rejected the deal. He blamed further complaints from Google's competitors.
Wagner-von Papp says the about-turn may have more to do with wider European concerns about Google — like how much tax it pays in Europe and concerns about privacy and spying.
"It was more these unrelated concerns that led to political pressure from mainly Germany and France on the commissioner, which is something that is very unusual in these antitrust investigations," he says.
Under the new European competition commissioner, Margrethe Vestager, Google could possibly face more formal charges and potentially billions of dollars in fines. Vestager takes office on Nov. 1. Some European lawmakers have even called for breaking Google up into separate companies.
But Mario Mariniello of the Brussels-based think tank Bruegel says Google may have a big market share for no other reason than Europeans really like it. And he says there's a risk in forcing the company to change.
"The danger is you know you are essentially upsetting something that is actually working," Mariniello says.
Google did not respond to a request for an interview.
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Transcript
RENEE MONTAGNE, HOST:
Google is in the midst of a long-running antitrust case with the European Union. So far the tech giant has avoided steep fines, but the appointment of a new European competition commissioner has many wondering if Google has a rockier road ahead.
From London, Christopher Werth reports.
CHRISTOPHER WERTH, BYLINE: Shivaun Raff has a problem with Google. She's the founder of a British-based website called Foundem that compares prices for things like televisions and other electronic equipment. And if you've never heard of Foundem, Raff says that's because of the way Google presents information when you search for something online.
SHIVAUN RAFF: Google is manipulating its search to increase its profit.
WERTH: She says Google does that by promoting its own price comparison services, like Google Shopping or Google's hotel and flight comparison services while demoting competing companies like hers in its search results.
RAFF: So for example, if you're looking for say, Canon digital camera...
WERTH: Raff types the search terms into Google on her computer and up popped the results.
RAFF: What you see right at the top is five big photos with big links to Google's price comparison service. That actually prioritizes which links it shows first by which advertisers pay Google the most.
WERTH: And as Raff scrolls down, no other price comparison site, like say her price comparison site, appears in the first page of Google's results.
RAFF: And as you can imagine, that's an extraordinarily powerful technique that siphons vast quantities of traffic to Google's own services and that is crushing competition.
WERTH: Raff's is just one of nearly 20 companies that have filed antitrust complaints against Google in Europe since 2009 and the biggest of those by far is Microsoft, which has its own competing search engine, Bing.
FLORIAN WAGNER-VON PAPP: Microsoft has been driving these complaints from the very start.
WERTH: Florian Wagner-von Papp is an expert on EU competition law at University College London.
WAGNER-VON PAPP: Over here in Europe, Google has an enormous market share. Over 90 percent of all searches on the web go by Google.
WERTH: That's less than in the United States. Google was cleared of similar antitrust allegations in the U.S. last year, but in Europe, Google's practices are seen as a potential abuse of its dominance. It's been forced to submit three rounds of proposed changes to its search engine and earlier this year, outgoing commissioner Joaquin Almunia appeared to have reached a deal with the company. [POST-BROADCAST CORRECTION: In the audio of this story, we incorrectly say that the share of Google searches in Europe is less than in the United States. It's actually more.]
JOAQUIN ALMUNIA: I believe today that Google's new proposals are able, are capable, of addressing the competition concerns I sent out to them.
WERTH: In its proposal Google agreed to display links to rival services alongside its own search services, but the commissioner has since rejected the deal. He blamed further complaints from Google's competitors, but Professor Wagner-von Papp says his about-turn may have more to do with wider European concerns about Google, like how much tax it pays in Europe and concerns about privacy and spying.
WAGNER-VON PAPP: It was more these unrelated concerns that led to political pressure from mainly Germany and France on the commissioner, which is something that is very unusual in these antitrust investigations.
WERTH: Under the new European competition commissioner Margrethe Vestager, Google could possibly face more formal charges and potentially billions of dollars in fines. Some European lawmakers have even called for breaking Google up into separate companies, but Mario Mariniello of the Brussels-based think tank Bruegel says Google may have a big market share for no other reason than Europeans really like it and he says there's a risk in forcing the company to change.
MARIO MARINIELLO: The danger is you are essentially upsetting something that is actually working.
WERTH: Google did not respond to a request for an interview.
For NPR News I'm Christopher Werth in London.
MONTAGNE: This is NPR news.
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MONTAGNE: It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.
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