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Why Handcuff the Next EC with a Bad Five-Year Google Deal? – An Open Letter to EC Commissioners

Dear European Commission Official,

Perversely the proposed EC-Google Settlement would restrict the next EC much more than it would restrict Google.

The special Google deal would handcuff EC President-Designate Juncker’s #1 priorityto create a digital single market for consumers and businesses” and “to break down national silos… in data protection… and in competition law.”

The deal would protect Google’s current de facto digital single market from significant new EC digital competition for five years, because the deal would require the EC to shut down its Google search investigation for a five-year period.

How specifically would the special Google deal handcuff the EC President-Designate’s top priority to create growth and jobs via a digital single market?       

First, the deal effectively grants Google amnesty for its dominance for the next five years; the deal “confirms that there are no grounds for further action and will close all investigations on the four competition concerns.” It pretends Google’s 90+% market share is not dominance when 39.7% is the normal EC dominance threshold. Moreover, it exempts Google from the standard EC fine and behavior sanctions for dominance abuse. Furthermore, it tacitly permits and facilitates Google’s extension of its search and search advertising dominance into other markets without limit.

Simply this special deal’s entrenching of Google’s extensive digital dominance would impede or preclude the emergence of a more viable, competitive, and job-creating European digital market, by ensuring that current and future European online competitors cannot achieve the necessary economies of scale, or access to consumers, that they need.   

Second, the deal specially exempts Google from the standard EC legal obligations of dominant firms to not abuse their dominance: i.e. "a special responsibility not to allow its conduct to impair competition on the common market." Shockingly, this deal would permit Google to continue to illegally divert Internet traffic to itself and preference Google content like Android, YouTube, Play, News, Maps, Finance, Picassa, Books, Chrome, Gmail, Hangout, etc. -- over European content, regardless of merit or consumer demand.

Simply, this settlement’s condoning of Google’s self-dealing and anti-competitive discrimination reinforces its search-related dominance and helps extend its dominance into other digital and physical markets. Thus if this deal is approved, it could doom to failure efforts to develop a more competitive European digital market, before the effort even got started.

What company can compete with a 90+% dominant firm that is free to abuse its dominance and is protected effectively by EC competition authorities?  If Google, the most pervasively dominant firm the EU has ever known, does not warrant the standard obligation of abiding by a non-discrimination principle, how could a competitive European digital market ever have a chance to succeed?

Third, the deal effectively absolves Google of its wrongdoing, despite the EC’s findings of four different abuses of its dominance, as of two years ago. The deal also perversely treats Google as a first time offender when it has abused EC competition law on standard essential patents; has several additional competition complaints pending against it; and is a well-known serial scofflaw of data protection, copyright, and tax law in the EU.

Simply, approving this special dominance deal would signal to European consumers, businesses, and competitors, that Google is largely above the law in the EU, and that the EC is not up to the task of fostering a competitive and fair, European digital market to generate growth and jobs.       

How would the special Google deal handcuff the EC President-Designate’s #3 priority to not sacrifice data protection (and other concerns) on the altar of free trade?       

The special Google deal also could handcuff  EC President-Designate Juncker’s #3 priority negotiating:  a reasonable and balanced trade agreement with the United States…” that “does not sacrifice Europe’s… data protection standards on the altar of free trade,” and promising “… the protection of European’s personal data will be a non-negotiable for me as Commission President.”

Importantly, in Google’s digital advertising business model, consumers are not the customer, but the product effectively sold to advertisers. What Google offers its advertiser clients is the benefit of knowing the most intimate, comprehensive, and private information on consumers in the world.   

Google explains it data dominance best. Google’s Chief Scientist Peter Norvig explained: "We don't have better algorithms than everyone else; we just have more data." Google Chairman Eric Schmidt further explained: "Scale is the key. We just have so much scale in terms of the data we can bring to bear."

DG-Comp’s current refusal to consider data protection relevant to the Google search competition case ignores that Europeans’ private data is the de facto internal currency of Google’s business model in Europe.

Its refusal to acknowledge that competition and data protection concerns are inextricably intertwined at Google produces the worst of both worlds for Europeans – enhancing Google’s dominance while harming consumers’ data protection.

Given that Google operates as an integrated model, and that the EC aspires for Europe to operate as an integrated market that protects Europeans’ personal data, this EC must reject the current Google deal in order for the next EC to have both the capability and flexibility to ensure that the next five years are digitally much better than the last five years have been for Europeans -- both competition-wise and privacy-wise.     

In short, follow the Golden Rule: do unto the next European Commission what you would want done to you.

Don’t handcuff the next EC’s ability to address Europe’s most serious and far-reaching competition and data protection problems going forward.

Do enable the next European Commission to have the capability and flexibility to do what is necessary to achieve Europe’s top priorities.  

 

Sincerely,

Scott Cleland

Publisher, GoogleMonitor.com & Googleopoly.net

Author, Search & Destroy: Why You Can’t Trust Google

President, Precursor LLC, a research consultancy for Fortune 500 clients, some of which are Google competitors

McLean Virginia, USA 

 

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Past Open Letters to European Commissioners on Google

  1. Open Letter to European Commissioners to Reject Google Settlement Proposal [2-16-14]
  2. The Growing EC-Google Settlement Scandal – An Open Letter to European Commissioners [3-31-14]
  3. Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency – An Open Letter to European Commission Officials [4-30-14]

Key Google Research for European Commission Consideration

  • Google’s Anti-Competitive Rap Sheet – May 2014 -- here
  • Google’s Privacy Rap Sheet -- June 2014 -- here
  • Google’s New Ubiquitous Physical Surveillance Network -- here
  • Why Google is Big Brother Inc. -- here
  • Satire I: Grading Google’s Search Antitrust Remedies in EU Market Test -- here
  • Satire II: Grading Google’s Search Antitrust Remedies in Second EU Market Test -- here

 

 

 

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