WASHINGTON D.C. — Today, the European Commission announced that it had imposed a record $2.7 billion fine against Alphabet. The EC alleges that Google violated European antitrust law by favoring its own Google Shopping service over rival comparison shopping services.
“There can no longer be any doubt: European competition is about protecting some companies against more successful ones, not about protecting consumers,” said Berin Szóka, President of TechFreedom. “The EC doesn’t say a word about consumers. It simply claims that Google has hurt its rivals, who will now reap a windfall from this fine. American antitrust law grew out of that approach decades ago, now requiring hard evidence that consumers have actually been harmed — the kind of evidence that the EC apparently lacks. The EC insists that consumers want search results to take them to other shopping engines. But consumers can always search those sites. What they really want from Google is relevant product results. Such second-guessing of how Google evolves its services will cast a long shadow on how all big web companies design and improve their services.”
“The EC has declared Google ‘dominant’ in the search market, but never mentions Amazon or eBay, which have huge leads in the product search market,” continued Szóka. “Such line-drawing is arbitrary and will make less and less sense over time, as search services blur, as Facebook expands its own Marketplace, and as companies not yet founded invent entirely new ways of shopping. This fine will come to be remembered, with the EU’s decade-long prosecution of Microsoft, as yet another Bruxellois attempt to plan a future that never happened.”
“Perhaps the most dangerous precedent set today is the EC’s reliance on a single internal Google email about its shopping service — instead of economic evidence of consumer welfare,” concluded Szóka. “Subjective intent should be irrelevant for competition law. Internal emails and other ‘hot docs’ make exciting headlines, but what matters is solid economic analysis. For all the EC’s technocratic pride in its own expertise, it has opened the door to an ugly populism that will inevitably be used as a weapon for nationalist retribution against American web services that European consumers prefer.”
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