It looks like Europe is ready to take the gloves off: after investigating Google’s search business for five years and almost letting the technology giant off with a slap on the wrist, the EU is reportedly ready to charge Google with sweeping antitrust violations. And in preparation of this momentous event, the European Commission has reportedly asked the many companies who have complained about Google’s predatory behavior to make their complaints public.
Here’s what’s happening.
At the urging of a growing collection of competitors, the European Commission began investigating Google’s search business about five years ago. The original charge? That Google illegally abused its monopoly power in the Internet search market to keep customers from finding up-and-coming and vertical market search competitors such as Expedia and TripAdvisor. It did so by artificially promoting Google services over these competitors—while claiming that its search service was completely algorithm-driven—and by artificially demoting these competitors in search results.
While this is only one of several antitrust cases that Google potentially faces in Europe, it’s also the most serious, and EU regulators and politicians have repeatedly clashed over the outcome. And the search case has grown to include other charges related to Google’s search business too.
The previous EC regime led by Joaquín Almunia almost settled with Google on three separate occasions. But competitors and many EU politicians all argued that the settlements would have done little to curb Google’s behavior. And now some EU politicians are calling on the EC to require Google to split off its search business from its other businesses, a nuclear option that would no doubt require years of court challenges. Either way, Almunia left office in late 2014 with the Google search case unresolved.
The EU’s new competition commissioner, Margrethe Vestager, has promised to take the Google case more seriously than did Mr. Almunia. And while it’s still not clear if the EU will in fact charge Google with antitrust violations, this week’s request for more evidence transparency is a step in that direction. And it could build public support for whatever action the EC does take against the search giant.
Google can still settle the case, of course. Indeed, that is the most likely outcome, though such a settlement would have to be less friendly to Google than the weak agreement Mr. Almunia tried to pass off. It would also have to address all of the charges against Google’s search business, which include the previously described search bias behavior as well as related issues like content scraping—where Google steals information from other web sites and presents it on its own sites so users don’t need to visit the original site—and various advertising-related abuses.
The EU is no stranger to holding US technology giants accountable for their actions. A decade ago, Microsoft was mired in a years-long antitrust case with the EU, has paid over $1.8 billion in fines, and only recently stopped modifying Windows to meet the EU’s requirements. And the EU also found microprocessor giant Intel guilty of antitrust abuses in 2009 and fined the firm $1.44 billion. (Both cases happened before Joaquín Almunia’s time leading the EC.) Surely, Google would at the very least face a similar fine should it be held accountable for the alleged abuses in the EU.
Reports about the suddenly culminating EU case come in the wake of inadvertently leaked FTC documents that show that the US agency should have charged Google with sweeping antitrust violations in this country too. But the FTC inexplicably declined to pursue the case, despite ample evidence of abuse.