Shouting isn’t the same as speaking clearly

Enrique Dans
Jun 30, 2017 · 3 min read

The €2.4 billion fine imposed by the EU’s anti-monopoly authorities on Google over the Google Shopping case is a clear show of strength by Danish commissioner Margrethe Vestager. But the record amount is a smokescreen for a resolution lacking in arguments, while at the same time exposing the uncertainties of competing in an EU that, many years after its creation, is, in legal terms, still unfinished.

What is it about the block of advertisements in the illustration that constitutes a crime and deserves a record fine? Let me say here and now that I don’t like Google’s progressive editorialization of its results pages, and I said so on other occasions (link in Spanish), but honestly, I see no difference between that block of advertisements and previous formats that the company has already used, and when it had very similar market shares.

Antitrust legislation was not created to punish the success of a company’s products, but instead the use of strategies by it to prevent or hinder the entry of other competitors. Is really Google harming other price trackers, or is it rather that these price trackers, for the most part, have retained the same strategy since the beginning of the century, and are now out of step? Have we stopped going to price tracker pages because Google somehow hides them, or is it because we prefer pages where we can also purchase the product or service directly? Can the EU really show that the trackers’ declining revenue is due to Google Shopping, which is not particularly popular, rather than Amazon?

I have never been scared to denounce the dangers of scant supervision in the case of companies like Google, which have been able to obtain, over the years, very high market shares. At the same time, it won that market share because users recognized that its products were superior to its competitors. Again: anti-monopoly authorities should not punish a company’s success, but instead its attitude toward its competitors, which means that the arguments behind the measures taken to avoid predatory behavior must be well founded, with no gray areas. In this case, the EU’s anti-monopoly authorities have fined Google a record amount without it being clear exactly what it did that it hadn’t already done previously, and has been told to correct the problem without giving any indication on how to do so. It is as if a policeman fines you because he says that you are committing a crime without explaining what it is, and then threatens to fine you again if you do not change your ways … without explaining what it is you are supposed to correct.

Is Google being fined for something in particular, or simply because it is big, successful and American? The EU needs to explain the basis for the fine, otherwise we are entering a scenario of legal uncertainty in which the rules change every time a new commissioner is appointed and wants to make a show of force, without a proper explanation.

What should Google do in the face of the threat of further fines? Give advertising space to its competitors at a symbolic price that distorts the market? Withdraw its product from an unpredictable market? The ruling is not at all clear, and the idea of the huge fine seems to be simply a distraction from discussing what it is that Google has done wrong.

Like most people, I prefer to live somewhere where the rules are clear and unambiguous, not arbitrary and inexplicable. Legal insecurity and arbitrary justice have always seemed dangerous signs. I want business environments where the consequences of one’s actions are clear. The only thing clear here is that the European Commission has imposed a record fine on Google, but the average mortal would be unable to explain what it is that Google has done exactly. Instead of speaking clearly, Europe has chosen to shout very loudly. And I’m not sure that that this is the best solution.


(En español, aquí)

Enrique Dans

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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