June 29, 2017 12:03:02 am
The competition commissioner of the European Union has hit Google with an unprecedented fine of 2.4 billion euros for apparently misusing its search dominance to tilt the shopping market in its favour. The Europeans get quite incensed about monopolistic behaviour, and have earlier punished Intel and Microsoft for seeking hegemonies by trying to control consumer behaviour. Famously, competition commissioner Margrethe Vestager also attacked Apple in Ireland, but for a different reason — tax avoidance.
Trouble began for Google in 2006, when the price comparison website, Foundem, complained that they had vanished from Google. Soon thereafter, Google released Universal Search, which melds searches from verticals indexing images, video, shopping and so on and presents the results in a single page. Effectively, it had become the sum total of the internet, and was in a position to leverage monopolistic muscle. Joaquin Almunia, Vestager’s predecessor, tried to forge an amicable settlement, but failed. And now, the commission has concluded that Google misused its market dominance and “denied other companies the right to compete on merits and innovate”. A gigantic fine has been imposed, against which Google may appeal.
The right to innovate on a level playing field and the consumer’s right to choose are the holy of holies of competition regulators, and they have been breached repeatedly in the digital business. Europe fined Intel 1.06 billion euros in 2009 for cutting shadowy deals with computer manufacturers, disincentivising them from using competitors’ chips. They were also accused of paying manufacturers to delay the release of computers built on other companies’ chips. In a late skirmish of the historic browser wars, Europe had also moved against Microsoft, requiring it to provide a screen at which users could choose to use browsers other than Internet Explorer. Its argument was the same as that of the US government in its famous anti-trust action against Microsoft, which had transgressed by integrating its Internet Explorer browser into the Windows operating system. Since the browser is the gateway of the internet, it was ruled, limiting the choice of browsers unfairly influences user behaviour. Today, Google is the gateway to the internet — more, it is a facsimile of the whole internet — and the same logic applies. Its dominance is unprecedented, far exceeding that of Microsoft in the Nineties, when it was prosecuted in the US. Google’s motto is, “Don’t be evil”. But it is so big that it must be watched.
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