Imagine that you are a start-up company, you obviously want your business to bloom and be easily accessible through the internet. After a while you figure out that you do not pop up in the Google search results and it being the most widely used browser, this will be a huge issue because you want people to know you, to try you out but there is a big giant mountain standing between the customers and you, this mountain is actually Google’s own brand in the same field which it promotes to an extent where the top search results are from there. When we think from the perspective of a start-up or a not very well established business this is clearly unfair and snatching away from a platform from people. “Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors”.
Antitrust laws and how it works
EU’s commission works on the same issue, it’s antitrust laws are made to keep a check on all the companies that they compete on the basis of their merits and innovation and not use anti-competitive measures to do the same.
The Commission applies EU competition policy by bringing cases against companies from the various industries which have a large sale or whose products and services have a direct impact on the consumers who use them. According to an analysis of around 1.7 billion search requests, Google’s results systematically and consistently were giving a prominent position to its own comparison shopping service to the detriment of rival services. This prominent placement resulted in their shopping service running well ahead of its rivals and was far more successful.
What is competition policy?
A competition policy is basically about making sure that companies compete with each other on an equal footing – on the basis of their products and prices – with no unfair advantages. Why is competition policy important for consumers? When companies are forced to compete with each other, consumers win. New, better products are developed and the prices go down because everyone wants to sell more. These definitions mentioned on the EU’s website direct us towards the importance of competition and how essential it is for both the consumers and the sellers or manufacturers.
EU hence decided not to compromise on this issue and decided to slap Google with a fine of 2.4 Billion Euros. The commission’s fine of €2,424,495,000 was said to take into account the “duration and gravity of the infringement”. It was based on the revenue that Google has produced from this comparison shopping service in the 13 countries where the illegal move occurred.
This penalty is the highest ever given for an accusation of distorting the market. The commission said it was leaving it to Google to determine what alterations should be made to its Shopping service rather than specifying a remedy.
The search results that we are talking about are labeled as being sponsored which shows that the advertisements are the ones which the sellers have paid for to be made to pop on the results. But this neutrality will be a big issue for Google as it will have to find out new ways of actually earning income as a huge amount if it’s revenue comes from its advertising services.
What the authorities say
Concluding I would like you to have a look at the perfectly put words by Commissioner Margrethe Vestager, in charge of competition policy as to where Google went wrong, “Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.
What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”
Others who have been fined
There are others who have been fined too, these include Intel: for skewing the market by offering discounts conditional on computer-makers avoiding products from its rivals, Intel has made an appeal for the same and the matter is due for 2018; Qualcomm: for selling its chip at extremely low prices to push its competitors out of the market, the case is pending; Apple: for returning illegal tax benefits; Facebook : for not being able to match user accounts on its main service to those of WhatsApp when it took over the instant messaging platform. In my opinion, what EU is doing with the giant companies is justified on the grounds of maintaining competition.
Internet neutrality is the principle which supports that all the data on the internet should be treated the same. According to save the internet movement the telecom companies also tend to misuse the internet and load the sites that pay them in high speed and its rivals in extremely low speed or not load them at all. The people who support internet neutrality argue that this will give rise to more free speech and hence wide participation in democracy, hence growth. Also that people and websites should have an equal access to each other regardless of their capacity to pay. Biasness on the internet also hinders competition and innovation because the thing is that why would you want to take all your ideas and gain nothing out of it or rather it won’t even be visible to your target audience. Internet neutrality is making operators dumb channels which just pass all the information that they have without segregating them on any basis.
It is not as simple as it sounds if this happens then search engines will have to find an alternate source of income because no more sponsored results will be allowed plus a mechanism has to be developed having more than 200 parameters to sequence the results without a bias. But if it ends up in giving us so many advantages I don’t think that we should hesitate because of this difficulty.
The Internet, telecom operators, and search engines have done a lot for us and have given us access to a lot of information on the internet but it all goes in vain if we resort to adopting anti-competitive practices like these.