The Evidence that Google Bamboozled the EU Competition Authorities – Part 21 Google Unaccountability Research Series

Look at the evidence to judge for yourself if Google bamboozled the EU Competition authorities.

Simply, compare the long list of major EU concessions to Google to the short-list of minor Google concessions to the EU – made in the EU-Google settlement negotiations to resolve the investigated problem of Google’s anti-competitive search bias.

The evidence shows Google dominated these negotiations. Given that most everyone would agree that the sovereign European Union is vastly more powerful than corporate Google, and given that the EU’s competition law and enforcement process is well-known to be very tough, a logical conclusion from the upside-down outcome of these negotiations is that Google successfully bamboozled the EU competition authorities. 

I.    Background

Last May, EU Competition Chief Joaquin Almunia publicly stated his preliminary conclusions were that Google abused its “dominant market position” in four ways. First, Google provided preferential treatment of Google content over competitors’ content in Google’s search results.  Second, Google copied competitors’ content and used it as its own. Third, Google required websites to have exclusive search agreements with Google. And fourth, Google limited advertisers’ portability of their campaign data to competitors. 

Importantly in that speech, Vice President Almunia stressed that a settlement was preferable to prosecution in “fast-moving markets” in order to bring benefits to consumers more quickly. As a result, he offered Google the opportunity to propose remedies.

Reportedly Google has offered, and the EU has accepted for market testing, the following remedy package. In Europe, Google will provide consumers more of a choice of competing vertical services in some instances in its search presentation, and it also will better identify what links are Google-owned properties in some instances. Going forward Google will agree to: not misappropriate competitors’ content for Google’s use; end exclusive search contracts with websites; and allow advertisers to more easily move their data in order to use a competitor’s services.       

II.   Comparing EU & Google Negotiation Concessions

A.   EU Concessions to Google:

1. EU conceded that the standard EU competition law enforcement process of issuing a Statement of Objections for those determined to have violated EU competition law, and that the EU has applied in other “fast-moving” tech markets with Microsoft, Intel, Apple, and Honeywell, should not apply to Google.
2. EU conceded that the negotiations with Google over remedies should not start from the traditional position of strength defined in EU law via issuing a formal Statement of Objections, but from a non-traditional position of weakness in publicly requesting that Google offer remedies that would be acceptable to both Google and the EU.
3. EU conceded that the EU would not declare Google a search/advertising monopoly, in contradiction to its investigative finding that Google commands 90+% share of that market in Europe.
4. EU conceded that the EU would not declare Google had abused its “dominant market position” in the four ways it preliminarily concluded it abused its market power in its draft Statement of Objections from a year ago.
5. EU conceded that Google would not have the special legal obligations to not abuse its market power in the future that would follow legally from a finalized Statement of Objections.
6. EU conceded that no remedies would be required to rectify ill-gotten Google market power gained from Google’s longtime abuse of its “dominant market position,” effectively accepting and legitimizing most of Google’s existing search/advertising “dominant market position” going forward.
7. EU conceded that the EU would not penalize Google with the exceptionally large fines allowed for under EU law, like the EU imposed on Microsoft, Intel, Apple, and Honeywell in similar situations.
8. EU conceded that the EU would not consider Google’s 90+% monopoly gate-keeper-power over what European consumers find online and what content gets monetized online to be an essential facility that has special obligations to not abuse its market power by treating competitors in a non-discriminatory way.
9. EU conceded that a company that leverages its “dominant market position” to self-deal or self-divert traffic, in order to maintain and extend its dominance will not necessarily face EU sanction for violating EU competition law.
10. EU conceded that the company with the single most EU law enforcement problems pending before the EU by far -- spanning competition, privacy, intellectual property, and tax law -- should be given special benefit of the doubt to enjoy a no-fault, no-penalty negotiated settlement in lieu of normal law enforcement.
11. EU conceded that the company well-known for recidivism and non-compliance with existing legal settlements can be trusted to abide by the negotiated settlement.
12. EU allowed a company to propose its own antitrust remedies when the last time that company proposed its own competition remedies in the Google Book Settlement, those proposed remedies sought to legitimize past illegal behavior and effectively lock-in a new monopoly position going forward.
13. EU conceded effectively that the EU would protect Google in the market testing process from having to make additional concessions in order to protect the EU’s decisions to settle and not prosecute Google.
14. EU conceded that the EU would adopt the more Google-friendly antitrust-enforcement template of the U.S. FTC rather than the much tougher U.S. DOJ antitrust-enforcement template of the Google Book Settlement and the Google-Yahoo Ad Agreement.
15. EU conceded that a multi-million Euro Google settlement payment to the EU’s hometown Belgian media right in the middle of final EU-Google settlement negotiations last December did not create any actual or perceived improper influence of the EU adjudication process of the Google search bias case.
16. EU conceded that Google’s much higher market shares in Europe vs. the U.S. and the EU’s much tougher competition laws and enforcement processes, do not prevent the EU from adopting an “FTC+” approach where the “+” is essentially making the FTC approach for Americans legally-binding for Europeans.
17. EU conceded that Google’s remedy offer to better label its results would not be considered by the EU to be Google branding, advertising, and marketing for Google vertical services that would only further entrench and extend their search/advertising “dominant market position.”
18. EU conceded to a settlement process that now has already taken longer than it would have taken the normal EU process to get enforceable remedies for consumers, i.e. an issuance of a Statement of Objections, followed by a hearing, then followed by a finalization of the Statement of Objections with remedies – a process that routinely takes less than a year and after which the remedies are enforceable despite any pending appeals.  

B.   Google Concessions to the EU:

1. Google conceded that it would be legally bound for five years to the remedies Google designed and the EU accepted.
2. Google conceded to be subject to an independent monitor of compliance who could only monitor the remedies Google designed and the EU accepted, not for any activity outside of the scope of the Google-EU remedies.
3. Google conceded to a requirement to provide European search consumers with more of a visible choice of competing vertical services in some instances.
4. Google conceded to making Google’s pre-existing non-binding commitments to the FTC, to be binding in just Europe, i.e. Google for five years will agree to: not misappropriate competitors’ content for Google’s use; end exclusive search contracts with websites; and allow advertisers to more easily move their data in order to use a competitor’s services.

III.  Conclusion:

Fact: Google’s 90+% “dominant market position” in Europe is much greater than it’s ~70% share position in the U.S.

Fact: EU competition law and enforcement processes are much tougher on monopolies and monopoly abuse than U.S. law and enforcement processes are.

Fact: EU law provides a much speedier process (about 1 year) to get enforceable remedies (absent a settlement) in a finalized Statement of Objections than the U.S. antitrust process provides.

In short, the EU had vastly more leverage in these negotiations yet the EU made many high-value concessions to Google in order to secure Google’s public assent to the EU-Google settlement, while Google made a few low-value concessions to the EU.  

You be the judge. Did Google bamboozle the EU Competition authorities?

***

Google Unaccountability Research Series:

Part 0: Google's Poor and Defiant Settlement Record

Part 1: Why Google Thinks It Is Above the Law

Part 2: Top Ten Untrue Google Stories

Part 3: Google's Growing Record of Obstruction of Justice

Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability

Part 5: Google's Culture of Unaccountability: In Their Own Words

Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement

Part 7: An FTC Googleopoly Get Out of Jail Free Card?

Part 8: Top Lessons to Learn for Google Antitrust Enforcers

Part 9: Google Mocks EU and FTC in Courting Yahoo Again

Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm

Part 11: Why FTC Can't Responsibly End the Google Search Bias Antitrust Investigation

Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe

Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed)

Part 14:  Troubling Irregularities Mount in FTC Commissioners' Handling of Google Antitrust Investigation

Part 15: Top Ten Unanswered Questions on FTC-Google Outcome

Part 16: Top Takeaways from FTC’s Google Antitrust Decisions

Part 17: Google’s Global Antitrust Rap Sheet

Part 18: Google’s Privacy Words vs. its Anti-privacy Deeds

Part 19: Google’s Privacy Rap Sheet Updated – Fact-checking Google’s Claim it Works Hard to Get Privacy Right

Part 20: DOJ & FTC Report Cards