Three Thoughts On EU's $2.7 Billion Antitrust Google Fine

from the thinking-this-through dept

By now, of course, you’ve probably heard that the EU Commission has fined Google €2.4 billion for antitrust violations, specifically regarding shopping search (there are at least two other investigations going on around antitrust questions involving Android and Adsense). The specific issue leading to this fine is that Google, for years, has been pushing its own comparison shopping results in response to searches on products, and other comparison search vendors feel this is unfair, as users are more likely to just jump to Google’s shopping options in the boxes up top — usually called the “onebox” (for what it’s worth, I almost never click on those boxes, in fact, I almost never use Google for product search, preferring other, better, dedicated sites — but that’s a single anecdotal point, while the EU is citing some data it claims supports its position). Anyway, rather than digging all that deep, let’s go with three thoughts I had in reading through the EU’s announcement (linked above), Google’s response and some of the other coverage.

  1. I still don’t understand why Google didn’t handle this differently starting years ago. Three years ago, we wrote about this in connection to the antitrust fight over “place reviews” where Yelp & TripAdvisor made the fairly compelling (and data-backed) argument that Google users would prefer if the “onebox” were populated using Google’s search algorithm, rather than only showing Google’s review pages via Google Local/Zagat/whatever it’s called. The same thing could apply somewhat to shopping search as well, and pull from other shopping search engines — and, voila, no more antitrust issue. In that setup, competition in the market rules — and if Google can produce the best results, it wins. If others can do better, then they win. Seems like a fairly straightforward solution as it would have eased the pressure on Google, and wiped out this kind of fine. Indeed, such a response would even feel more “Googley” in the early-2000’s definition of “Googley” where the company seemed much more willing to drive people elsewhere on the web, rather than keep people in.

  2. Even given that first point, I’m still… nervous about having European bureaucrats (or, really, any bureaucrats) telling any company how they can design their webpages. As Wired’s Klint Finley points out, once bureaucrats — who have no idea the realities of designing search results pages, let alone designing any webpages — start telling websites how they can and cannot design their sites, trouble follows. I know that some are saying (and I’ve talked about this in the past) that this is just the EU slapping down big American companies for being “big” and “American” but I really think this is a case of EU regulators getting so deep in the weeds and then deciding that Google is too big and that they (the bureaucrats) don’t like how its shopping search results work. That kind of meddling in webpages should worry everyone. Yes, you can say that it will only be used against giant companies… but once you open the door to bureaucrats telling you how your webpages can work, they might not stop at just the big ones. Danny Sullivan summed this up nicely:

  3. Given all that: will this actually change anything substantial? Even if Google accepts this and doesn’t appeal (which it probably will…) it can easily afford the fine. But, more importantly, will this actually help other comparison shopping engines? That’s much less clear. That same article (by Rob Pegoraro) has a number of interesting quotes, including a few from Jan Dawson of Jackdaw Research noting that in the market for product searches (as in my anecdotal experience), most don’t start at Google:

    ?Around half of searches for products now start on specific e-commerce sites or apps, especially Amazon in the countries where it operates,? emailed Jackdaw Research principal Jan Dawson.

    Dawson also noted: “Although those comparison shopping sites still exist, they’re far less relevant today, and even a change to Google?s search engine isn’t going to turn that around.”

So… if this isn’t going to hurt Google and isn’t going to help other companies in the market, then… what’s the point exactly? Yes, Google could have done things differently, but this doesn’t help really.

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Comments on “Three Thoughts On EU's $2.7 Billion Antitrust Google Fine”

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TKnarr (profile) says:

I do agree with Google about one point: if I search for a specific product I typically want to see either a) pages with information about that product or b) pages where I can purchase that product. Pages that offer me search results for that product… are what I went to Google to get, if I wanted another search engine’s results I would’ve gone to them instead of Google. No matter what the EU bureaucrats may say, it’s not Google’s job to throw a lifeline to shopping comparison sites and keep them alive for another few months to a year before Amazon kills them off for good.

Anonymous Coward says:

Re: My own opinion

This is more akin the netscape vs explorer case. It was started in a time far, far from now. Vestager has been pretty brutal at slamming fines out to whoever she sees fit, including Gazprom and several other companies.

I think Google has pissed her off too much by being uncooperative and constantly stalling/changing stance, causing the investigation to miss deadlines and drag on without really following through. They were warned for that a few years ago and now they have been punished for it.

The wider implications for Google will be felt in the other antitrust cases with a little more meat on it than this one. The android situation has now changed from a staller to an actual problem and the adsense monetisation of monopoly services case can now no longer be ignored (the adsense case is where a potential solution is a complete breakup of the company).

Anonymous Coward says:

From its CIA-funded start, Google's strategy all along has been skimming value, lying about goals, patiently gaining control, PR, payoffs, lobbying, and lawyering.

And it’s sure to work because Google is a key part of the surveillance state, gives NSA “direct access” according to Snowden, so protected from at least US anti-trust.

Prior article worries about ATT monopoly, but different when Google: just give up all privacy and enjoy its benevolence.

Anyhoo, I’m not getting distracted by your shifty “thoughts”. My headline is basic facts.

Anonymous Coward says:

Re: Re: From its CIA-funded start, Google's strategy all along has been skimming value, lying about goals, patiently gaining control, PR, payoffs, lobbying, and lawyering.

Google overtook Goldman Sachs as the largest “donor” in US politics several years ago. Google (and other Silicon Valley) lobbying is a large part of why we have a surveillance state and no serious data protection laws.

Also, they don’t pay their taxes.

Also, what he said is not entirely nonsense.

Google are not our friends.

Anonymous Coward says:


Noticed on 27 June: — On May 1st, 2017 @ 9:27am pops up after prior nearly SEVEN years before on Nov 23rd, 2010 @ 11:09am.

Another Wednesday 28 June: Dec 15th, 2016 @ 3:18pm, again nearly SEVEN year gap to Jul 13th, 2009 @ 8:47am.

You DOUBLY can’t explain that. TWO people after SEVEN years suddenly recall this minor little site on which made a FEW comments, user name, AND password? Baloney! — Even if is a way to renew forgotten password, the urge to comment after so long is inexplicable.

My guess is old accounts are taken over for astro-turfing, but whether by “administrators” or “AI” is open because they’re bland — which is quite helpful to TD by presenting the illusion that reasonable persons habit the site.

Wth TWO nailed down, this isn’t just odd, it’s ODD SQUARED! So just watch for names you don’t recognize and check date at bottom on first page of history.

Once is happenstance.
Twice is coincidence.
Third time is enemy action. (I’m sure have seen a third and more. I’ll keep watch. There’s so much hidden FUN on inexplicable Techdirt!)

orbitalinsertion (profile) says:

It seems like a bad idea, but there is a point about localized results being buried. I don’t think that this is the way to go about making them better, or adding competing services into the market. On the other hand, and not that the fine-slappy gov types know or not, but i find google search itself has just been getting crappier, and they screw with their search operators, made “advanced” search more difficult and less flexible, etc. I can’t say i was ever a fan, but they did a pretty good job for a while. I would like to know what makes their search not as good as it once was (or, just make it better), and i get the impression that some form of this goes to the complaints that were driving part of the eu decision. (I am sure there are ulterior lobbying reasons also)

Anonymous Coward says:

rob peter to pay paul

Well, I’m not sure about shopping results. But I do know that during the last election whenever I typed in Bernie Sanders I got a page full results for Hillary Clinton, not Sanders.

Fan of Google or not, the european bureaucrats are fining Google to pay for Merkel’s invasion policy. The money has to come from somewhere.

Anonymous Coward says:

The conclusion seems really arbitrary to me. What if “Google Shopping” and “Google Maps” (etc.) weren’t separate products.

If Google just had “Search,” and displayed relevant shopping and map data when you searched for products and locations, how would it be “unfair” to show that data that Google deemed relevant?

But somehow, just because Google Maps is “not” Google Search, Google cannot favor their own data? Should Google Search be showing Bing results too?

John85851 (profile) says:

The point is that politicians can say they're doing something

“then… what’s the point exactly?”
So that EU politicians can say they “did something about the problem”, even if the “problem” isn’t well defined. Then add in the nationalism and xenophobia that’s sweeping Europe and suddenly every large American company is a “problem” that needs “solving”.

I predict the same EU politicians will begin an investigation of Facebook and Amazon for similar “monopoly” practices.

zboot (profile) says:

What's the point exactly?

“So… if this isn’t going to hurt Google and isn’t going to help other companies in the market, then… what’s the point exactly?”

Deterrence and to set acceptable standards. It’s the same reason we have laws with punishment for crimes despite the fact that most people will likely not break much beyond traffic and parking violations and hardened criminals committed to a life of crime will proceed regardless of the penalties if caught.

If the fine for running a red light was $50000, despite the fact that most motorists in a given area have no plans of running red lights, people would think twice if it were published someone was fined (and paid) that much, regardless of that person’s ability to pay the fine.

Cdaragorn (profile) says:

Re: What's the point exactly?

So by “acceptable standards” you mean force successful companies to pay for and run ads for their failed competitors on their own property? How the heck does that make an ounce of reasonable sense?

This is like forcing Walmart to splash ads for every small town local store across its shelves just because they’re not as big. The only “crime” they’ve committed is being successful. Calling this antitrust is just being ridiculous.

GoogleNeedsToAdapt says:

The thing is, it's not America

I’d be refreshing if analysis were from the EU perspective not American values. They don’t apply speech as done in America, business regulations are tighter in the EU vs America.

Bottom line from my view is that the EU is fighting to retain their various cultures and American companies are doing everything to undo that for short term gains. Google does it in the form of placement of products and links…

I envy the EU for focusing on quality of life and taking on the likes of Google. In the EU, buy a local paper selling local products, buy a coffee and a biscuit from the local vendor and talk to someone vs in America where you buy something with the same headline among all national papers from some world brand having a watered down latte from a mermaid brand and a biscuit that has 80% filler and tastes like cardboard while staring into a 9 inch screen and being angry at someone sitting next to you invading your perceived space.

The EU doesn’t and shouldn’t live by the standards coming out of America. They’re better off for it and we in the U.S. should appreciate that. Google is a company not a value statement and is highly predatory in nature e.g it’s only just recently that they will stop scanning your emails to sell you crap.

bobmorning (profile) says:

Re: The thing is, it's not America

If not for America, you EU elitists would be speaking German and eating your biscuit and drinking tea in the gulag.

BTW, pay your fricking NATO bills or we will pull out, sit back, and watch Putin pound your arses.

Google should tell Brussels to go to hell and not pay the fine.

What a failed social experiment…I relish for the day the whole EU experiment goes “poof”.

PaulT (profile) says:

Re: Re: The thing is, it's not America

“BTW, pay your fricking NATO bills”

Oh dear, you have a Trump level of understanding of what NATO does and how it’s funded, don’t you? I’m sorry that basic education failed you, but try reading up on the subject if you can, it will help address the real world and stop you being so angry at random countries.

Cdaragorn (profile) says:

Re: The thing is, it's not America

This inane narrative always fascinates me. Nothing about this has anything to do with “culture”. Culture is created by people, not businesses.

And even then your entire playthrough about the garbage we supposedly accept from what we buy is so hilarious its like you’ve never bought anything in America ever.

TruthHurts (profile) says:

Google does NOT have a monopoly.

Google doesn’t control it’s place in the online search and advertising industries.

Let me re-state that as it’s crucial to this case.

Google does NOT have a monopoly, and they do not control their position in the global online search and advertising industries.

What Google does have, are the hearts and minds of hundreds of millions, if not billions of users world wide.

All of these users choosing to use Google’s services pushed Google’s search and advertising businesses to the top of the market, but that is NOT something that is under Google’s control.

What that means is that the EU is fining Google because of the actions of other people.

Google cannot be accused of abusing a market position that is outside of their control.

If the EU doesn’t like Google being top dog in online search and advertising, all they have to do is build a better search engine and build a better advertising business and promote them to people globally and if they truly are better, the people will flock to them.

Trying to blame Google for abusing a position that they themselves cannot control makes the EU court system a laughing stock to the rest of the world.

thewix (profile) says:

Re: Google does NOT have a monopoly.

Maybe this would be relevant if the decision was about whether Google was abusing monopoly power, but it’s not. The decision was about abusing a dominant market position.

You can disagree with whether Google’s behavior was abuse (which I do), but using the word monopoly is a strawman.

Also, saying Google has no control over its market position seems specious. Do you think it is an accident that they are the top search provider, and none of their actions had anything to do with that?

Dave Cortright (profile) says:

If I ran the world…

I admit a company probably would never do this, but why can’t Google just say, fine we won’t have a business presence in the EU? They can still absolutely sell services and ads that are targeted to that local. Just require the transactions to take place on US servers using US $. and of course people will still be able to get to Google. And they will, unless governments start Draconian blocking. Google basically did this with news in Spain. I don’t see why they don’t just do that in this case as well.

Alphager (profile) says:

One thing that's missing in the reports about this...

One thing that regularily gets dropped is that the shopping onebox coincided with a massive update of the search algorithm that placed scompeting shopping search sites way at the back of the result page.

Each one of them would probably have been fine, but the combination was uncompetitive in the eyes of the commission.

Anonymous Coward says:

As a VERY-heavy search engine user, I’ve always been VERY unhappy with the places that the “shopping search” sites showed up.

I think they should all get to first place–in the ninth circle of hell. Where their proprietors get direct feedback from all the world’s shoppers.

Give them their right name. They are “ad banner spam farms”. Nothing less, and nothing (printable) more.

The reason Google has its dominant place in the hearts of users now, is that all the other search engines failed to avoid getting spammed out of existance by those spammy sites, and so people couldn’t find anything useful.

And no amount of bribes to unelected bureaucrats can change that fact. People will go ANYWHERE, WHEREVER the spam banner farms aren’t. If it isn’t, it’ll be Or or–what’s the top-level domain name for the His Majesty’s Ruritanian government in exile?

That One Guy (profile) says:

Re: Re: Re:

Acting like sane adults would require them to stop attacking strawmen and presenting insults as ‘arguments’, neither of which I imagine they’d be too keen on.

If they want to demolish their own image and constantly shoot their own arguments in the foot though I say let ’em have at it, makes it all the more entertaining when they then whine about how people ignore them and/or don’t take anything they take seriously.

giardian says:

Corporate vs Government Sovereignty

The fact is that Europe absolutely depends on US companies and would collapse overnight if they decided to punish the EU. The voter backlash would be immense and possibly revolutionary. There are a large number of escalating options available to Google.

1. Google could just pay the fine and massively increase its prices, particularly to EU government bodies, and justify it as the cost as doing business in the EU.

2. Heavily promote their case on their search page.

3. Disable or degrade key services (eg maps) in Europe as a sanction against the EU.

4. Get together with Microsoft and disable search in Europe for a period. Both have been harshly treated by the EU. This would basically break the Internet for them.

5. Shutdown local offices in key countries (eg Germany) which will have a massive negative effect on them economically and technologically.

6. Get together with Microsoft, Facebook, Intel, Apple and everyone else who has been persecuted by the EU and do collective sanctions.

While all of these could cost Google in the short term, they are very real threats, and could apply massive political pressure on the EU court system. There is a lot more at stake than a few bureaucrats having their somewhat arbitrary decisions obeyed. If Google made a good example of them, then many other courts and governments would take a lot more care in their decisions.

Anonymous Coward says:

Re: Re: Corporate vs Government Sovereignty

What competitors? Google and MS ARE the search industry and MS plays a very minor competitor. When you travel to China and experience the world without Google and it is horrible.

These US companies are now big enough that they are bigger than many countries, both in terms of economics and in terms of political power, particular in their ability to influence voters. So far US companies have always played nicely, fought it out in court and paid the fines, but the day is coming when their duty to shareholders will take them in other directions, like threatening to take down economies rather than playing nicely. Countries do it to each other all the time. Maybe the big tech companies will just buy a nice island state somewhere and start making their own rules with their own national sovereignty.

I'm in Oz says:

Governments shouldn't regulate?

once bureaucrats — who have no idea the realities of designing search results pages, let alone designing any webpages — start telling websites how they can and cannot design their sites, trouble follows.

"once bureaucrats start telling aircraft manufacturers how they can and cannot design their aeroplanes, trouble follows"

What could possibly go wrong?

royleith (profile) says:

Free Market?

I think that the EU Commission have made a legal blunder.

They say ‘Google has abused its market dominance as a search engine’.

Wikipedia says:
“A market is one of the… systems… whereby parties engage in exchange. [M]ost markets rely on sellers offering their goods or services… in exchange for money from buyers.”

There is no market for search engines. We don’t pay for search results. The search engine service is an alternative to offering free, internet, kitten videos in order to attract people to your sales site.

Whether your sales site sells your own product line or also provides paid links to ‘partners’ a la Amazon, is your choice of business model. If Kelkoo want prominence on Google’s sales site, then they will have to pay more for that prominence.

Try ‘Google has abused its market dominance as a free, internet, kitten, video company’. Does that pass the legal test for antitrust?

MyNameHere (profile) says:

Re: Free Market?

Google has created a situation through hard work, a little luck, a browser, and a free operating system that has made them not just a default choice for consumers, but a wired in choice as search by most makers of smart phones and tablets.

There are literally hundreds of millions of devices that cannot easily avoid Google. It is for all intent and purposes a monopoly.

PaulT (profile) says:

Re: Re: Free Market?

“There are literally hundreds of millions of devices that cannot easily avoid Google”

Namely the ones using Google’s operating system. i.e. the ones used by manufacturers and consumers who have chosen to use its OS over the others available on the market. Those who have chosen its competitors have no problem avoiding them.

Thad (user link) says:

Re: Re: Re: Free Market?

Those who have chosen its competitors have no problem avoiding them.

I don’t think that’s an accurate statement. Most people don’t know how many sites have Google Analytics, or other third-party Google tracking content, embedded in them, and wouldn’t know how to block them even if they did.

Even for those of us who do — I would hardly describe fiddling with NoScript settings as "no problem"; it’s an inconvenience and an annoyance.

Buying an iPhone instead of an Android phone is easy. Using other search engines, email providers, etc. is easy. Avoiding Google entirely is not easy at all.

PaulT (profile) says:

Re: Re: Re:2 Free Market?

Well, I was referring to avoiding their main search/browser products. It’s true that they have other things that you can’t avoid, but that’s a situation where other people are the ones making the choice (e.g. if you have a problem with Analytics, it’s because the website you’re visiting has chosen to do business with Google). But, that wasn’t his point, his point was whining that you can’t avoid Google if you’ve chosen a handset with Android installed.

It’s the same in the physical world. I might hate ClearChannel, avoid all of their radio stations, live events and so on, but I’m still going to see their bllboards when I’m travelling around. It would be wrong to pretend that I have no choice of radio station & event management just because I hate the fact that I have to see their advertising everywhere.

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