Last week the EU filed its formal statement of objections against Google and their shopping search results. But if they’re successful, this case could be a lot bigger than shopping.
It’s the biggest antitrust case in Europe since Microsoft’s similar battle years ago. But the EU has learned from the “toothless” remedies against Microsoft, and seem ready to draw blood on this one. If they succeed, it could change the way Google’s practices work—and the EU Commissioner is hoping the solution will stand against the tests of time.
The European Commission is focused on Google’s alleged practice of skewing search results to divert users of Google’s search engine to other Google-owned websites, products, and services, particularly travel, shopping, and navigation websites. In addition, the EC is separately investigating allegations of alleged agreements between Google and mobile device manufacturers related to Google’s Android platform – it is claimed that such phone manufacturers that agree to use Google’s open-source Android platform face contractual obligations to place Google’s other apps in prominent positions on the mobile devices.
Essentially the issue boils down to the 2007 institution of the universal results page, which presents as much information as Google thinks you need, all in one handy page. Those pages often link back to or promote other relevant search results, often from Google. In the eyes of Google’s critics in the EU, that’s exactly the kind of unfair advantage that would create a monopoly.
In some ways, they already have: Google has a staggering authority over the European marketplace, reportedly controlling over 92 percent of the EU’s search market. It’s not too much of a stretch to say Google would be in a position to abuse that authority. If Google can’t rebut the statement of objections they could be facing about €6 billion in fines (which Perlman notes is about 10 percent of Google’s annual revenue), but the real price could be higher than that.
For now, the EC’s focus is primarily set on Google’s grasp over shopping results. But as Vox notes, if you posit that Google’s shopping search results are in violation then there’s not much of a case to be made for the rest of Google’s prioritization:
Consequently, if you take the logic of the EC’s complaint seriously, then EU regulators aren’t going nearly far enough. If it’s illegal to elevate Google Shopping over other search results, it should also be illegal to give special treatment to Google’s other specialized search products for maps, news, or images.
And indeed, that’s exactly what Google’s more ambitious critics are pushing for. If they win, it could lead to a dramatic transformation of Google’s search product.
If this case is decided against Google, then it’s unlikely the EC will stop at shopping. The EU has already started an inquiry into the Android marketplace, which has come to make up 70 percent of Europe’s mobile operating systems in only five years. Despite declaring themselves a “free and open platform” for anyone to design apps for, Android requires a Google certification which complicates the seemingly well-intentioned advertising. Not to mention the fear that Google would bully tablet and smartphone makers to feature Google products more prominently.
There would also likely be a complete reworking of the Google search in Europe, meaning potentially millions of customers will be seeing a change in the way one of the most widely used companies on the planet presents information to them.
And the EU commissioner is looking for something with a more lasting effect against the company. When Microsoft found itself in a similar situation in the past, the EU’s punishment proved rather fruitless, and didn’t manage to make a lasting statement against the company. This time, however, EU Commissioner Margrethe Vestager has stated that all options are open at this point, and that she’s aiming to make the punishment “futureproofed.”
Whatever happens this decision isn’t likely to come anytime soon. Google could settle or they could dispute. No matter which way the case ends up going, there’s likely to be appeals from the other side that would drag the whole process out even longer. The tech-giant still has ten weeks to respond to the statement of objections, and given the internal memos being passed around they seem ready for a fight. But either way, it’s doubtful they’re feeling lucky.