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Why Settlements with Google Fail – Open Letter to New EC Commissioners

Dear European Commission Official,

Unfortunately, the EC has learned the hard way. Settlements with Google don’t work.

First, Google’s leaders interpret DG-Comp’s publicly-signaled preference for a competition settlement over law enforcement to be a sign of sovereign weakness, and a lack of confidence in the EC’s sovereign resolve and law enforcement.

Second, Google’s leaders also interpret the EC’s repeated willingness to settle -- with no admission of Google wrongdoing/culpability and no meaningful penalty for past abuses of dominance – to practically mean that the EC’s sovereignty, rule of law and deterrent capability are all negotiable and open to surrender if Google pushes back hard enough.   

There is no other conclusion for Google’s leaders to reach. DG-Comp effectively surrendered its entire case three different times publicly: that Google is dominant, has abused its dominance, and warrants a fine and changed behavior.

In addition to that capitulation and pardon from responsibility for past abuses of dominance, DG-Comp also agreed to surrender the EC’s future sovereign authority to investigate Google search for five more years – almost the entire term of the next European Commission.

Furthermore, three times DG-Comp did not follow-through on its public threats to issue a formal Statement of Objections.

Not issuing a Statement of Objections and continuing to negotiate from a position of maximal sovereign weakness confirmed to Google’s leaders that DG-Comp felt it needed a settlement more than Google did.  

Third, Google’s two years of delays, deceptions, and evasions in its dealings with the EC on competition and data protection matters, still have had no material negative consequences for Google to date.

Fourth, Google completely disagrees with EC competition and data protection laws and any need for the EC to assert sovereignty over Google that would require a change in how Google operates in Europe.

Google’s own “sovereign” assumptions are: that it is not dominant in any way and thus could not have violated EU competition law in any way; and that Google users have no expectation of privacy, and that it is the responsibility of users and others to detect and report security/data-protection problems -- not Google’s.

In effect, continued EC willingness to negotiate a Google settlement, instead of enforcing EU law and sovereignty, would be interpreted by Google’s leaders that the EC has conceded to a political negotiation between equals over what is best for Europeans, rather than the EC asserting its sovereign authority to determine what commercial behavior is expected and enforced in Europe.  

Finally, settlements don’t work with Google because Google has a poor and defiant record with Government settlements and enforcement decisions to date.  

In three different data protection clashes with Google, European data protection authorities have experienced first-hand Google’s deep aversion to respecting European sovereign authority in its: secret Street View collection of WiFi signals from millions of European homes; its implementation of a new privacy policy without meaningful user consent; and its passive-aggressive opposition to the European High Court’s right-to-be-forgotten decision.

As for the U.S., the evidence shows that Google also does not cooperate with U.S. investigators or obey U.S. negotiated settlements either.  

In 2012, the FCC imposed a maximum fine on Google because it "deliberately impeded and delayed the Bureau's investigation" into Google Street View’s widespread wiretapping of home WiFi signals.

Later in 2012, the FTC fined Google $22m for violating the FTC’s Google-Buzz settlement and privacy framework by hacking Safari to override Apple users’ privacy settings to serve Google ads.  

And Google broke five U.S. laws during the 2011-2013 two-year probation period of the U.S. Department of Justice’s Non-Prosecution Agreement settlement with Google, in which Google paid a $500m penalty for “knowingly advertising illegal drug imports” into the U.S., and which required Google to operate under a “comprehensive compliance” program to “detect and prevent violations” of law.

In sum, Google will continue to offer to negotiate new settlements with the new EC. Why wouldn’t they? It has worked very well for them to date.

The age-old lesson here is that those who don’t learn from history are doomed to repeat it.   

 

 

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]
  4. Why Handcuff the Next EC with a Bad Five-Year Google Deal? – An Open Letter to EC Commissioners [7-8-14] 

Key Background Google Research for European Commission Consideration

  • Google’s Anti-Competitive Rap Sheet – May 2014 -- here
  • Google’s Privacy Rap Sheet -- June 2014 -- here
  • Google Android’s Data Protection Failures -- August 2014 – 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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