D.C. Stakes Out Positions on Google Fine

Reaction flows after EU hammers search giant with giant fine
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Washington reacted Tuesday to the news that Google has been hammered by the European Commission with a record fine for using its dominant position in search to anti-competitively favor its comparison shopping service over others.

Google had not returned a request for comment at presstime.

The Information Technology & Innovation Foundation (ITIF), a tech policy think tank, jumped to Google's aid.

"Today’s ruling is bad for consumers and bad for innovation," said ITIF president Robert Atkinson. "The EU has effectively decided that some companies have become too big to innovate. The EU’s actions have created a cloud of uncertainty that will make large tech companies overly cautious about making changes to the user experience and service offerings that would benefit consumers."

The Computer & Communications Industry Association, of which Google is a member, took aim at the EC decision.

“The Commission’s Decision marks a worrying step away from the key objectives of competition law enforcement," said CCIA Europe director Jakob Kucharczyk. "Companies should not be punished for introducing innovative products that consumers and advertisers value. Providing direct answers to users’ search queries is unquestionably a product improvement. All major search engines do it. Courts and competition authorities around the globe have found that there are procompetitive justifications for such product improvements.

“It seems the Commission’s case is mainly focused on competitors who disagree with Google competing on the merits. We fail to see the evidence for consumer harm and for quality-related product degradation. If the result of this investigation is to force Google to undo more than ten years of search engine evolution, EU competition enforcement would clearly not live up to its promise of spurring innovation.

“Leaving aside the Commission’s very narrow market definitions, Europe’s e-commerce sector is thriving. The success of companies like Zalando, Asos or Trivago show consumers have increasing choices to find, compare and buy products online. Investments into e-commerce ventures have steadily increased. All of that is not indicative of a market suppressed by a dominant player.”

Thomas Lenard, senior fellow and president emeritus at the Technology Policy Institute, suggested the EC had gotten off track.

"The focus of the European Commission’s action against Google today appears to be harm to competitors rather than harm to consumers, which should be the focus of antitrust enforcement. The EC should demonstrate in concrete terms how consumers have been harmed." Google maintains that it is simply helping consumers find products they are looking for more quickly and easily.

Scott Cleland, president of Precursor LLC, chairman of the ISP-backed NetCompetition, and a long and strong critic of Google, saw it quite differently.

"The EU is right. Google is a monopoly. It abuses its search monopoly by self dealing and predatorily foreclosing competition. This seven-year EU process has been fair, competent and patient to get it right."

Cleland suggests U.S. regulators should take a page from the EU, and that they will.

"Sadly the EU is cleaning up the mess created by U.S. non-enforcement of antitrust law caused by obvious political interference and protection orchestrated by Google's outsized political clout," he said. "This decision will trigger a domino effect of additional enforcement against Alphabet-Google in the EU the U.S. and around the world in search, advertising, Android and Google Play.

"This is the first inning of Google's new official monopoly abuse reality."

“All competition authorities should take questions of platform dominance seriously," said Public Knowledge President Gene Kimmelman. "Although we are not in a position to assess the merits of this particular case, we appreciate the European Commission focusing on these important issues. In these types of cases, antitrust officials must ensure that no company use its market power to foreclose competition, or to leverage its success in one market to gain an unfair advantage in another.

“This case is likely to have much wider implications than the comparison shopping dispute highlighted in the Commission’s statement. We believe effective antitrust enforcement must offer marketplace solutions that benefit consumers and enable competition and innovation to flourish. However this case is ultimately resolved, we believe it is critical that any online platform with excessive market power should not be allowed to discriminate unfairly against competitors while being allowed to develop product and service innovations that benefit consumers."

"Google's market power is one of the most critical challenges for competition policymakers in the world today," said
Barry C. Lynn, director of the Open Markets program at New America. "By requiring that Google give equal treatment to rival services instead of privileging its own, [European Commissioner for Competition Margrethe] Vestager is protecting the free flow of information and commerce upon which all democracies depend. We call upon U.S. enforcers, including the Federal Trade Commission, the Department of Justice, and states attorneys general, to build upon this important precedent, both in respect to Google and to other dominant platform monopolists including Amazon. U.S. enforcers should apply the traditional American approach to network monopoly, which is to cleanly separate ownership of the network from ownership of the products and services sold on that network, as they did in the original Microsoft case of the late 1990s."

Sen. Amy Klobuchar (D-Minn.), the ranking member of the Subcommittee on Antitrust, Competiton Policy and Consumer Rights, said she would be keeping an eye on dominant players.

“Dominant internet platforms increasingly affect not just the products we buy and the information we seek, but innovation and economic opportunities for small businesses," she said following the decision. "I am committed to pursuing these issues to ensure that the internet is an engine to increase economic opportunity and protect consumers in the 21st century economy.”

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