My 2 cents on the EC decision against Google
Regardless of the merits and soundness (or lack thereof) of today’s European Commission Decision in the Google Shopping case — one cannot assess this until we have the text of the decision — two comments really struck me during the press conference.
First, it was said that through its conduct, Google’s faced lower incentives to innovate. If I heard correctly, this is a formidable statement. In 2016, another official EU service published stats that described Alphabet as increasing its R&D by 22%, and ranked it as the world’s 4th top R&D investor. Sure it can always be better. And sure this does not excuse everything. But still. The press conference talking on incentives to innovate is a bit of an oversell.
Second, the Commission views this decision as a “precedent” (also mentioned in press release) that should inform the way dominant Internet platforms should display, intermediate and market their services and those of their competitors. This may fuel additional complaints by other vertical search rivals against (i) Google in relation to other product lines, but also against (ii) other dominant platform players…
Beyond this, what you can see is a willingness to avoid the Microsoft remedy quagmire, by not having a trustee and by leaving remedial design to the very abstract concept of “equal treatment”. Search neutrality could actually cut both ways, and lead to degradation in consumer welfare if Google was ever to legally decide to abandon rich format display for its own shopping services and those of rivals.
What we also know now is that neither big data nor algorithmic design are directly villified in the case (“The Commission Decision does not object to the design of Google's generic search algorithms or to demotions as such, nor to the way that Google displays or organises its search results pages”). In fact, the Commission objects to the selective disapplication of Google’s generic search algorithms to its own products. This is an interesting, and subbtle, clarification given all the coverage that this topic has attracted in recent antitrust literature. We are in fact close to a run of the mill story of disguised market manipulation, which is not causally related to data or algorithmic technology.
As to the odds of a possible appeal, I don’t believe that arguments on the economic evidence or legal theory of liability will ever be successful before the General Court of the EU. The law and doctrine in unilateral conduct cases is disturbingly — and almost irrationally — severe. In contrast, I tend to think that Google has probably a stronger game from a procedural standpoint, having been left under (i) the expectation of a settlement (it played ball three times by making proposals); (ii) a corollary expectation of an absence of fine (settlement discussions are not appropriate for cases which could end with fines); and this over 7 long years… Our EU judges like the procedure, but like comparably less to debate the substance of the law, and this case could be a test one in terms of setting boundaries on how the Commission can freely U-turn a case.
