Google’s Antitrust Hardball Plans for the EU?

Apparently Google is preparing to play political hardball in opposing: the EU’s antitrust Statement of Objections against Google for abusing its 90% dominance of search by anti-competitively favoring Google Shopping over competitive shopping services; and its new antitrust investigation of Google’s Android operating system for anti-competitive tying and bundling of Google services.   

The WSJ reports Google is planning to “launch buy buttons on its [mobile] search results in coming weeks.” To date reporting and analysis of this development has focused importantly on the business and competitive implications of this strategic development, but has yet to connect-the-dots to what search buy buttons mean for the EU antitrust search shopping case and its new Android investigation.

If Google launches search buy buttons, it could signal Google is intent on waging a public political war to bully the European Commission into submission, in order to secure a benign Almunia-like antitrust settlement for Google.

Simply, the search buy buttons are an obvious political pretext for Google picking a very public fight with the EC on Google’s chosen populist terms: that the EC is protectionist; and anti-consumer and anti-innovation for denying users the simple, time-saving, push-button, conveniences consumers want.

Most everything is politics and public relations to Google. Its modus operandi is to publicly frame itself as the innocent victim and good guy who only cares about the user and innovation; and to put opponents on the defensive by publicly framing them as bad guys, with bad motives – i.e. protectionists protecting inferior companies in this particular instance.

Google likely will bet that it’s smarter legal army and legendary public relations air force, combined with its utter domination of European online public discourse technologically via its 90% dominance of public discovery of information, and its related dominance of the monetization of content online, will ensure users, advertisers, and its conflicted journalism “partners” will side with Google over an eventually cornered EC.

Google just has to bully the new DGComp into thinking just like the old DGComp was bullied to think – three different times.  

Google grasps the very big franchise risk it faces here long term.

Unlike being able to run circles around previous DGComp VP Almunia with interminable, meaningless, and embarrassing one-way, “negotiations,” new DGComp Vestager is laser-focused, disciplined and resolute in establishing three simple, but exceptionally powerful legal precedents that could have sweeping, sovereign process implications for Google’s world-leading, and rapidly-proliferating market power going forward.

First, legally establishing Google search is dominant with ~90% market share in Europe.

Second, legally establishing Google has abused its search dominance by favoring its Google Shopping service over competitors.

And third, legally establishing the remedy here should be that “Google should treat its own comparison shopping service and those of rivals in the same way.” This could be a standard non-discrimination remedy that could be applied as a cookie-cutter, remedy template for Android, advertising, Maps, YouTube, etc.

So why do Google’s search buy buttons matter in the context of the EU antitrust case?

Google understands it must change the conversation and frame of the case from the facts -- that European law is different and tougher than U.S. law; that the threshold for dominance its lower in Europe than the U.S. ~40% versus ~>70%; that dominant firms in Europe have “a special responsibility not to allow its conduct to impair competition on the common market;” that Google has ~90% search market share in Europe; and that the facts show Google favors Google Shopping in search over rivals – to Google’s preferred political and PR frame that users are happy, and Google is innovating and offering better search and conveniences to users than rivals.

Why will the EC likely view Google’s search buy buttons as anti-competitive?

Close examination of the facts will show that search buy buttons extend Google’s search market power via tying and bundling into shopping and into Google’s broader search-driven platforms including its Android operating system platform.

Search buy buttons will likely be seen as a repeat of a behavior the EC found anti-competitive in its Statement of Objections: that it “artificially diverts traffic from rival comparison shopping services;” and also that it is extending dominance by fortifying Google’s broader platform dominance via further disintermediating retailers from their direct customer relationship, and advertisers from market data they previously enjoyed.

At core, the antitrust problem here is that mobile devices have much less screen space than desktops which means that Google has more incentive and ability to leverage this screen scarcity to self-deal, tie and bundle in new ways to enhance its market power in new and multiple ways, either for maintaining or extending its search dominance into complementary services and platform extensions like Android mobile operating system, Maps, advertising, video etc.

The clash is about Google rapidly proliferating its search and search-related data dominance into a rapidly expanding and strengthening Internet platform of most all of the most used and demanded products and services, and the EC DGComp and European antitrust law which will likely find maneuvers like search buyer buttons to be abuses of dominance.

Watch closely how the issue of search buy buttons plays out publicly, it will likely be a telling and important harbinger of how hardball Google’s political fight with the European Commission will become.

Scott Cleland is President of Precursor LLC, a consultancy serving Fortune 500 clients, some of which are Google competitors. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc. Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.

 

***

Google Unaccountability Series

Part 0: Google's Poor & Defiant Settlement Record [5-1-12]

Part 1: Why Google Thinks It Is Above the Law [4-17-12]

Part 2: Top Ten Untrue Google Stories [5-8-12]

Part 3: Google's Growing Record of Obstruction of Justice [6-21-12]

Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability [7-12-12]

Part 5: Google's Culture of Unaccountability: In Their Own Words [8-1-12]

Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement [8-10-12]

Part 7: An FTC Googleopoly Get Out of Jail Free Card? [8-30-12]

Part 8: Top Lessons to Learn for Google Antitrust Enforcers [9-14-12]

Part 9: Google Mocks EU and FTC in Courting Yahoo Again [9-26-12]

Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm [11-25-12]

Part 11: Why FTC Can't Responsibly End Google Search Bias Antitrust Investigation [11-27-12]

Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe [11-30-12]

Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed) [12-10-12]

Part 14: Troubling Irregularities Mount in FTC Handling of Google Investigation [12-17-12]

Part 15: Top Ten Unanswered Questions on FTC-Google Outcome [1-3-13]

Part 16: Top Takeaways from FTC's Google Antitrust Decisions [1-7-13]

Part 17: Google’s Global Antitrust Rap Sheet [1-31-13]

Part 18: Google’s Privacy Words vs. its Anti-privacy Deeds [3-8-13]

Part 19: Google’s Privacy Rap Sheet Updated – Fact-checking Google’s Privacy Claims [3-13-13]

Part 20: DOJ & FTC Report Cards [4-12-13]

Part 21: The Evidence Google Bamboozled EU Competition Authorities [4-19-13]

Part 22: EU-Google: Too Powerful to Prosecute? Problems with Enabling Google [5-1-13]

Part 23: Google’s proposed EU Search Bias Remedies: a Satire [5-17-13]

Part 24: Google’s Antitrust Rap Sheet Updated [5-27-13]

Part 25:  Is This the Track Record of a Trustworthy Company? See Google’s Rap Sheet [6-6-13]

Part 26: Top Questions as DOJ-Google Criminal Prosecution Deadline Approaches [7-12-13]

Part 27:  The Evidence Google Violated the DOJ Non-Prosecution Agreement [8-8-13]

Part 28:  Implications of EU Ruling Google Abused its Search Dominance [9-27-13]

Part 29:  Google-YouAd is a Deceptive and Unfair Business Practice [10-24-13]

Part 30:  EU's Google Antitrust Problems Not Going Away [12-16-13]

Part 31:  How the Google-EC Competition Deal Harms Europe [2-10-14]

Part 32: Open Letter to European Commissioners to Reject EC-Google Settlement [2-16-14]

Part 33: Google’s Extensive Cover-up [2-24-14]

Part 34: Open Letter on Google’s Opposition to Distracted Driving Legislation [2-27-14]

Part 35: The Growing EC-Google Settlement Scandal – An Open Letter to EC Officials [3-31-14]

Part 36: Google’s Glass House [4-14-14]

Part 37: Google’s Titan Spy-Drones Mimic Military Spy Planes [4-17-14]

Part 38: Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency [4-30-14]

Part 39: Google Apps for Education Dangers --Letter to School Administrators/Parents [5-17-14]

Part 40: Google’s AdSense Lawsuit Spotlights Google’s Corruption of Unaccountability [5-23-14]

Part 41: Google’s Title II Utility Regulation Risks – An Open Letter to Investors [6-3-14]

Part 42: Six Ways the FTC is AWOL on Google [7-16-14]

Part 43: Fact-checking Google’s Public EC Competition Defense [9-21-14]

Part 44: Top 10 Reasons Why Google is Causing EU More Problems than Microsoft Did [10-1-14]

Part 45:  Google Profiting from Hacked Celebrity Women Photos “How Google Works” [10-6-14]

Part 46:  Fact-checking Google Schmidt’s “Ich bin ein Big-fibber” Berlin Speech [10-14-14]

Part 47:  Google’s Dominance isn’t Peaking its Proliferating [11-4-14]

Part 48: A European Revolution against Google’s Virtual Colonialization? [11-24-14]

Part 49:  Google’s Serial Bad Acts Harm American Interests in Europe [11-28-14]

Part 50:  Evading Sovereign Accountability is “How Google Works” [12-10-14]

Part 51:  What’s Google Really up to in Wireless [1-30-15]

Part 54: Evading Sovereign Accountability is “How Google Works” [12-10-14]

Part 55: Bullying is “How Google Works” – Ask Law Enforcement [12-21-14]

Part 56: Deceptive Branding is “How Google Works” Ask EC Law Enforcement [1-7-15]

Part 57: Breaking Privacy Promises is How Google Works - New Student Privacy Pledge [1-22-15]

Part 58: What’s Google Really Up To in Wireless? [1-30-15]

Part 59: Google’s Title II Privacy Liability Nightmare [2-6-15]

Part 60: Why is Google Obstructing Justice in Mississippi? EC Pay Attention [2-12-15]

Part 61:How America Protects National Champion Google in the EU [3-5-15]

Part 62:  FTC-Googlegate Scandal Repercussions in U.S. & EU [3-20-15]

Part 63: The Appearance of Google-USG Conflicts of Interest Grows [3-25-15]

Part 64: Googlegate -- The FTC Cover-up Evidence Piles Up [4-1-15]

Part 65: Googlegate II: The Evidence DOJ Made Google Criminal Case Go Away [4-8-15]

Part 66:  Why Google’s Running Out of Antitrust Political Tricks [4-14-15]

Part 67:  EU-Google Antitrust Charges – Google’s Hidden #1 Problem [4-15-15]

Part 68:  EU Charges Spotlight Google’s Self-Dealing Power [4-17-15]

Part 69:  Big Holes in Google’s EU Antitrust Defense  [4-29-15]

Part 70:  EU Antitrust Endgame is Google-Android Platform Neutrality [5-8-15]

Part 71:  Googlegate Email Shows FTC an Extension of Google’s Lobby/Press Operation [5-15-15]