Unlike the Shopping Case, now the European Commission strikes at heart Google’s dominance

Schermata 2018-07-18 alle 16.27.01

Today’s decision of the European Commission strikes at the heart of the dominance of Google, namely its dominance in the Internet search, but not its business model and its ability to provide popular and innovative services. The Commission has in fact sanctioned the (alledged) behaviors through which Google – starting from the free installation of Android – has consolidated its dominant position as a general Internet search engine over the years. From this dominant position (90% in most European markets) derives wealth and power of Google: thanks to the ability to analyze the traffic of (almost) all users who do searches on the Internet, Google has accumulated over the years a huge quantity of information. These big data can then be monetized elsewhere, particularly in online advertising. A per-se lecit activity, without doubts: but the problem, according to Commissioner Vestager, lies with the conduits through which Google is suspected to have eliminated potential competition from other search engines, imposing in various ways to the manufacturers of Android smartphones the pre -installation of Google Search.

The case in question is therefore crucial for Google’s global commercial strategy, much more than the Google Shopping case, which now appears of secondary importance, because – unlike Google Search – the online comparison market is ancillary and not central to the Californian search engine. Because of that, what really matters in the decision of Brussels is not the fine of € 4.3 billion, a sum-monstre that could however be placed one off on the budget without too much pain on the part of a company of this size (31 billion turnover in the first quarter of 2018). What instead worries Google is the order of the Vestager to end, within 90 days, the alleged abusive behaviors: in other words, the producers of Android smartphones should be entitled to pre-install any app, including search engines other than Google Search. The impact of these new rules on the business of Google is substantial but will materialize only in the long run, since it will take some time for competitors to (re)emerge. The European Commission will also monitor on this phase: it is probable that, unlike in the past, Google (as well as other dominant OTTs) will not be allowed to buy and incorporate potential competitors.

If the European Commission’s analysis is correct – but we will only know it at the end of the inevitable Google’s appeal – users will only have to be happy: not only will Google continue to continue its business, but there will be room for potential competitors, a novelty for many Internet users, many of whom – for age reasons – have never imagined the possibility of a search engine other than Google.

Some final considerations: someone will say that the sanction to Google is an act of war of Europe against US, and now Trump will well impose duties on German and French cars, and maybe even on Ferrari and Parmesan. In truth, the biggest Google complainants are US companies, which today have succeeded in obtaining in Brussels what Washington never delivered until now. The same happened in 2004 to Microsoft, which had been attacked by Sun Microsystem in front of the Commission. In other words, the great US antitrust battles are now being played in Europe, not in the United States.

From this it derives another consequence: if there were no European Union with supranational institutions with binding powers, such as the European Commission with its antitrust sanctioning powers, the European states would be defenseless in the face of global multinationals, should they be US, European or Chinese. Those who think they can govern the great global issues from an exclusively regional perspective should be aware of it.

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