Fine is Only One Click Away

Abstract

In a US Senate Hearing in 2011, Eric Schmidt, Google’s CEO, stated that ‘competition is only one click away’. On the 27th of June 2017, the European Commission fined Google €2.42 billion for allegedly ‘abusing dominance as search engine by giving illegal advantage to own comparison shopping service’. Ruthlessly, fine is only one click away too.

What does the European Commission criticise for imposing such a break-record fine to Google? According to Competition Commission Margareth Vestager, ‘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’ (...) therefore denying ‘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’.

The products referenced on Google Shopping, the shopping platform of Google Inc., have been promoted in the search results in comparison with other shopping platforms, the Commission considered.

The legal arguments of the European Commission are clear: thanks to its complex algorithms, Google has allegedly manipulated the search results of products in order to promote its own platform, Google Shopping, at the expense of competitors. Because the position on the search results is tantamount to a price paid by competitors in order to attract consumers, by manipulating its search results, Google has abused its dominance and therefore infringed Article 102 TFEU because it i) ‘has systematically given prominent placement to its own comparison shopping service’ and ii) ‘has demoted rival comparison shopping services in its search results’.

Albeit clear, both legal arguments of the European Commission are nonetheless unsubstantiated and ungrounded as discussed below successively.

Keywords: Antitrust; Google; Competition Law; Algorithm

JEL Classification: K21