EU

The latest example of Google’s well-established pattern of callous corporate irresponsibility and willful blindness is reporting by the Washington Post that: “If you search Google Maps for the N-word, it gives you the White House.”

Tellingly, Google’s corporate policy of crowd-sourcing without curation/corporate supervision of Google Maps systemically yields racist labels for innumerable places per Danny Sullivan’s analysis of the pervasive problem at MarketingLand.  

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.   

Consider the new ‘smoking gun’ evidence of Google’s “undue political influence” over the FTC, concerning the FTC’s abrupt and unusual closure of the FTC-Google antitrust investigation in January of 2013.

Most have missed entirely the broader significance of the EC-DGComp’s laser-focused Google Statement of Objections (that charge Google is dominant in search and is abusing that dominance in Google Shopping by self-dealing via preferencing Google content over competitors’ content) in the broader context of the EU’s new “platform neutrality” principle to advance a European Single Digital Market.

To date, Google is the only digital company that the EC-DGComp has found to be an abusively dominant “platform” warranting a non-discrimination remedy that Google cannot self-deal. A primary allegation driving the EC’s new antitrust investigation of the Google-Android platform is that Google self-deals by design in requiring Google Search and other Google apps to be offered to users by default on Android.

The significance of what DGComp and the EU do on Google-Android “platform neutrality” could turn out to be the single most important element long term for the European Single Digital Market.

Why?

Android is rapidly becoming Europe’s (and most of the world’s) single dominant digital operating system that increasingly will have the market power to dictate who wins and who loses throughout the markets for digital devices, the Internet of things, the connected home, the connected car, etc.

Google’s EU antitrust defense suffers from “Goobris,” a new word because “hubris” is not big enough to describe the behavior of a single company that denies it is dominant in Europe when it commands >90% share of search, >90% share of search advertising in part via Google Analytics 98% share of ad tracking of Europe’s websites,  and 5 of the top 6, billion-user, universal web platforms: search, video, mobile, maps, and browser.

The US-EU “competition” of protectionist digital industrial policies -- U.S. Title II net neutrality vs. the EU’s emerging “platform neutrality” plans -- creates an ironic backdrop to negotiations for the US-EU Transatlantic Trade and Investment Partnership (TTIP) “free” trade agreement. Heightening the irony, the Obama Administration, not the European Commission, has been the protectionist digital industrial policy leader, trailblazing the political path for the EU’s Single Digital Market to follow.  

At least on the digital markets front, TTIP will be much less a commercial “free” trade negotiation and much more a political “fair” trade negotiation.    

The U.S. has long set the tone and trajectory for this digital “fair” trade dynamic in championing net neutrality to protect its Silicon Valley national champions, Google, Facebook, Amazon, Apple, Netflix, etc., and by skewing antitrust enforcement to benefit Google and Silicon Valley.

Facts belie Google’s rote denials that it is dominant, and that favoring its own content over competitors is anti-competitive in the EU. As this post will prove below, the public facts are overwhelming that Google is dominant and self-dealing.

But first, look closely and witness that the entirety of Google’s antitrust defense is essentially political -- that the EU’s antitrust law and precedent shouldn’t be different or tougher than America’s. Specifically, Google essentially is arguing that the EU shouldn’t have a lower market share threshold to be legally considered dominant and the EU shouldn’t have presumption in law that if dominant, the dominant company has “a special responsibility not to allow its conduct to impair competition on the common market.”

That’s wishful whining; it is not a legal antitrust defense in Europe.

It is only fitting that Google faces a Danish prosecutor in EC VP Margrethe Vestager. That’s because Google currently is acting out the role of emperor in the most famous Danish fable by Hans Christian Anderson, the “The Emperor’s New Clothes.”

Google’s biggest problem is not being charged with violation of antitrust laws in Europe; its biggest problem is a gross violation of trust of its roughly two billion users.

Just when Google needs it most, its political bag of tricks to dodge antitrust enforcement may be running out.

Reports that the EC is likely to issue a Statement of Objections ruling soon -- that Google is >90% dominant in search and search advertising and has illegally abused that dominance by promoting Google’s content and demoting competitors’ content -- indicates Google finally may be facing a global antitrust inflection point.

A tough EC SO would be a game-changer for Google, like the 2000 U.S. District Court case that ruled Microsoft an anti-competitive monopoly, proved to be a game-changing, global antitrust inflection point for Microsoft.  

Substantively on the merits of the EC antitrust case, Google appears to have little room to maneuver. The EC effectively agrees with the FTC’s staff antitrust conclusions per the leaked FTC staff report. That finding is highly problematic for Google because: EU competition law is much tougher than America’s; Google’s relative >90% market dominance in Europe is much greater than in the U.S.; and Google doesn’t have the dominant political influence over Europe that it does with the U.S. Executive Branch.

The New York Times’ editorial, “Global Threats to Net Neutrality,” scolds the world for not following the FCC’s nationalistic concept of net neutrality.

They feign shock and indignation that Europe and India would dare think of politically doing what the FCC has done and impose their own national industrial policies -- under the convenient political cover of “net neutrality.”

America’s elites naively imagine that other countries’ authorities don’t “get the joke” of the FCC’s politically-contrived net neutrality policy.

Other countries’ authorities are not as gullible and pliant as American elites imagine them to be.  

They know “net neutrality” has become an increasingly vacuous political slogan, whose definition conveniently changes meaning like a chameleon changes colors.

They know the FCC is pressuring them to do as the FCC says and not as the FCC does on net neutrality.