The Problem With Google's Potential $6 Billion European Union Fine
The long running investigations by the European Union into Google and the company activities have taken another twist. Now the EU is insisting that unless Google comes up with a better settlement offer there will be a more formal investigation and that could lead to a fine of as much as $6 billion: 10% of the firms’ annual, global, turnover. However, we’ve a serious problem here: no one has managed to show as yet that Google actually deserves a fine of anything. Not only that no one has as yet managed to show that Google has done anything wrong at all. Our collective problem here is that the EU itself doesn’t seem to be sure about what monopolies are and why they’re generally undesirable things.
There’s one thing we can all agree upon: in many European markets (but not all, including the Czech one that I happen to be sitting in right now) Google is the dominant search engine.
In a dramatic change of position, Joaquín Almunia, the EC’s competition commissioner, told the European parliament that unless Google altered its offer to settle complaints, it could face a “statement of objections”, the formal path towards a fine that could equate to 10% of the company’s global revenue, or about $6bn (£3.7bn).
…
Google controls more than 90% of the online search market in Europe, substantially more than in the US where it was cleared by the US federal trade commission in January 2013 of favouring its own searches to the detriment of consumers.
OK, that’s certainly a dominant position. And it’s always worth having a look at market players with such dominant positions. For the temptation is for those who possess such to exploit their dominance to the detriment of consumers. Perhaps by limiting production to drive up prices and thus enjoy monopoly profits. Or to crush any competition that tries to arise. But note that it’s not the near monopoly, of the dominant position itself, that is the problem. It is the attempt to exploit such situations to the detriment of the consumer that is. And we don’t actually have any evidence that Google is doing that:
The FTC said that any such favouring helped users.
That’s a bit of a difficult decision given the EU’s plans. For we’ve a number of things here: Google’s dominant position, yes, that’s there. Do they favour their own services? Maybe, maybe not: but that isn’t the issue at all. And their activities most certainly harm their competitors: that’s how they got that dominant position after all, by taking search volume from the other players. But we don’t care about that at all either. Obviously the shareholders and managements of those other players do but as a matter of public policy we’re only interested in whether the exploitation of a monopoly reduces consumer welfare. If, as the FTC concluded, Google’s activities actually aid consumers then we’re just fine with what it’s doing.
And that’s where our problem lies. The EU is proceeding on the basis that the mere existence of a dominant position must be regulated and possibly punished. Of course all of the competitors think this is just fine. But that isn’t in fact what the correct course of action is. We need proof that consumer welfare is being damaged by the exercise of that dominance before we get to that stage. That’s something we don’t have as yet, may never have, and so there’s not any justification for the EU’s current threats. We’ve also a larger problem here as well of course. If one of the world’s two major anti-trust authorities doesn’t actually understand the basics of what anti-trust oversight should be, well, yes, I think that’s a fairly significant problem.
The Problem With Google's Potential $6 Billion European Union Fine - Forbes
I think we in Europe really do need to create a European Google as well. I cant stress this enough. I dont know why we still havent discussed the possibility of creating one. i think if we really try/plan/and determined we can do it. We have all it takes to create one. However i dont think using 'monopoly' excuse to disrupt Google's operations is a good idea. Afterall, Google hasn't done anything wrong per say, it just that it does its job very good than anyone, so i dont think they should be penalised for that.What we need is just more competition, that's all.
The long running investigations by the European Union into Google and the company activities have taken another twist. Now the EU is insisting that unless Google comes up with a better settlement offer there will be a more formal investigation and that could lead to a fine of as much as $6 billion: 10% of the firms’ annual, global, turnover. However, we’ve a serious problem here: no one has managed to show as yet that Google actually deserves a fine of anything. Not only that no one has as yet managed to show that Google has done anything wrong at all. Our collective problem here is that the EU itself doesn’t seem to be sure about what monopolies are and why they’re generally undesirable things.
There’s one thing we can all agree upon: in many European markets (but not all, including the Czech one that I happen to be sitting in right now) Google is the dominant search engine.
In a dramatic change of position, Joaquín Almunia, the EC’s competition commissioner, told the European parliament that unless Google altered its offer to settle complaints, it could face a “statement of objections”, the formal path towards a fine that could equate to 10% of the company’s global revenue, or about $6bn (£3.7bn).
…
Google controls more than 90% of the online search market in Europe, substantially more than in the US where it was cleared by the US federal trade commission in January 2013 of favouring its own searches to the detriment of consumers.
OK, that’s certainly a dominant position. And it’s always worth having a look at market players with such dominant positions. For the temptation is for those who possess such to exploit their dominance to the detriment of consumers. Perhaps by limiting production to drive up prices and thus enjoy monopoly profits. Or to crush any competition that tries to arise. But note that it’s not the near monopoly, of the dominant position itself, that is the problem. It is the attempt to exploit such situations to the detriment of the consumer that is. And we don’t actually have any evidence that Google is doing that:
The FTC said that any such favouring helped users.
That’s a bit of a difficult decision given the EU’s plans. For we’ve a number of things here: Google’s dominant position, yes, that’s there. Do they favour their own services? Maybe, maybe not: but that isn’t the issue at all. And their activities most certainly harm their competitors: that’s how they got that dominant position after all, by taking search volume from the other players. But we don’t care about that at all either. Obviously the shareholders and managements of those other players do but as a matter of public policy we’re only interested in whether the exploitation of a monopoly reduces consumer welfare. If, as the FTC concluded, Google’s activities actually aid consumers then we’re just fine with what it’s doing.
And that’s where our problem lies. The EU is proceeding on the basis that the mere existence of a dominant position must be regulated and possibly punished. Of course all of the competitors think this is just fine. But that isn’t in fact what the correct course of action is. We need proof that consumer welfare is being damaged by the exercise of that dominance before we get to that stage. That’s something we don’t have as yet, may never have, and so there’s not any justification for the EU’s current threats. We’ve also a larger problem here as well of course. If one of the world’s two major anti-trust authorities doesn’t actually understand the basics of what anti-trust oversight should be, well, yes, I think that’s a fairly significant problem.
The Problem With Google's Potential $6 Billion European Union Fine - Forbes
I think we in Europe really do need to create a European Google as well. I cant stress this enough. I dont know why we still havent discussed the possibility of creating one. i think if we really try/plan/and determined we can do it. We have all it takes to create one. However i dont think using 'monopoly' excuse to disrupt Google's operations is a good idea. Afterall, Google hasn't done anything wrong per say, it just that it does its job very good than anyone, so i dont think they should be penalised for that.What we need is just more competition, that's all.
IP .....oh yea ...
