Abstract
The opening of antitrust investigations into Google by the European Commission underlines Google’s new reputation as a company with practices that may harm consumers and competitors. This chapter examines whether Google should be held dominant under the European regulatory framework for abuse of dominance, and if so, whether the practices it has been accused of constitute an abuse of such dominance.
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Notes
- 1.
Treaty on the Functioning of the European Union.
- 2.
See, inter alia, Rosenberg 1998.
- 3.
Search engine market shares around the world, Q4 2010, available at http://blog.greenlightsearch.com/greenlights_search_blog/2010/01/how-search-engine-market-shares-look-around-the-world-featuring-bing-yahoo-and-baidu-and-others.html (last accessed February 18, 2011).
- 4.
See, inter alia, 2007 Consultation Report of Privacy International, available at http://www.privacyinternational.org/issues/internet/interimrankings.pdf (last accessed January 8, 2011), in which Google is ranked ‘hostile to privacy’.
- 5.
For example French Wanadoo Interactive, which was the subject of antitrust proceedings due to its rapidly increasing market share in the market for high speed internet in France, infra.
- 6.
Commission notice on the definition of the relevant market for the purposes of Community competition law, Official Journal C 372, 9.12.1997, pp 5–13.
- 7.
DG Competition Discussion Paper on the application of article 82 of the Treaty to exclusionary abuses, available at http://europa.eu.int/comm/competition/antitrust/others/discpaper2005.pdf, para 12.
- 8.
Commission notice on the definition of the relevant market for the purposes of Community competition law, para 8.
- 9.
See Case 27/76, “United Brands Company and United Brands Continentaal v Commission” [1978] ECR 207, para 65; Case 85/76, “Hoffmann-La Roche & Co. v Commission” [1979] ECR 461, para 38.
- 10.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, Official Journal C 45/02, 24.02.2009, pp 7–20.
- 11.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, para 12.
- 12.
Mrs. Kroes, at that time EU Commissioner for Competition, stated in 2005: ‘(…) high market shares are not–on their own–sufficient to conclude that a dominant position exists. (…) A pure market share focus risks failing to take proper account of the degree to which competitors can constrain the behavior of the allegedly dominant company’. Speech delivered on September 23, 2005 in New York at the Fordham Corporate Law Institute.
- 13.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, par 13 and the case law mentioned therein.
- 14.
Idem, para 17.
- 15.
- 16.
- 17.
Ahlborn et al. 2006, para 5.1.
- 18.
- 19.
Case 322/81, “Nederlandsche Banden Industrie Michelin (Michelin I) v Commission” [1983] ECR 3461, para 57.
- 20.
Speech at Fordham Corporate Law Institute by Mrs. Kroes, supra; DG Competition Discussion Paper on the application of article 82 of the Treaty to exclusionary abuses, para 1.
- 21.
Statement of Interest by the U.S. Dept. of Justice Regarding the Proposed Settlement, Authors Guild, Inc. v. Google, Inc., Case No. 05 CV 8136 (DC) (S.D.N.Y. Feb. 4, 2010), available at http://thepublicindex.org/docs/amended_settlement/usa.pdf (last accessed January 21, 2011). Other matters involve “Kinderstart.com LLC v. Google” (No. 5:06-cv-02057-JF (N.D. Cal. July 13, 2006)), and the merger between Google and Doubleclick (which was approved by both the FTC and the European Commission; see infra for the decision of the latter).
- 22.
Amended Settlement Agreement, http://www.googlebooksettlement.com/r/view_settlement_agreement (last accessed January 21, 2011), para 1.19.
- 23.
Article 101 TFEU and article 102 TFEU both require that the agreement or conduct may affect inter-State Trade. See also European Commission Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty, Official Journal C 101/07, 27.4.2004, pp 81–96.
- 24.
Opinion of Federal Judge Chin of March 22, 2011, http://thepublicindex.org/docs/amended_settlement/opinion.pdf (last accessed August 31, 2011).
- 25.
Google Confirms F.T.C. Antitrust Inquiry, New York Times June 24, 2011, http://bits.blogs.nytimes.com/2011/06/24/google-confirms-f-t-c-antitrust-inquiry/ (last accessed August 31, 2011).
- 26.
Google confirms US antitrust probe, http://www.theregister.co.uk/2011/06/26/google_acknowledges_ftc_review/ (last accessed August 31, 2011).
- 27.
- 28.
- 29.
- 30.
The reference word or phrase that triggers the display of an advertisement in Google. Advertisers register keywords of their choice with Google AdWords.
- 31.
Press statement IP/10/1624 by the European Commission, 30 November 2011, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1624&format=HTML&aged=0&language=EN&guiLanguage=en (last accessed January 16, 2011).
- 32.
- 33.
- 34.
- 35.
See Google antitrust inquiry in Europe becomes broader, New York Times December 17, 2010, http://www.nytimes.com/2010/12/18/technology/18google.html (last accessed January 16, 2011); German news media challenge Google, Der Spiegel January 18, 2010, http://www.spiegel.de/international/business/0,1518,672580,00.html (last accessed February 18, 2011).
- 36.
Adding our Voice to Concerns about Search in Europe, http://blogs.technet.com/b/microsoft_on_the_issues/archive/2011/03/30/adding-our-voice-to-concerns-about-search-in-europe.aspx (last accessed August 31, 2011).
- 37.
Article L462-1 reads: ‘The Council on Competition may be consulted by the parliamentary committees with regard to bills and any issues relating to competition. It shall give its opinion on any competition issue at the request of the government. It may also give its opinion on the same issues at the request of the territorial authorities, professional associations and trade unions, approved consumer organisations, chambers of agriculture, chambers of trade or chambers of trade and industry, with regard to the interests for which these are responsible.’
- 38.
Press release of the Autorité de la Concurrence of 14 December 2010, available at http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=368&id_article=1514 (last accessed January 22, 2011).
- 39.
Press release of the Autorité de la Concurrence of 14 December 2010; Opinion of the Autorité de la Concurrence on competition in the online search market, available in English at http://www.autoritedelaconcurrence.fr/doc/10a29_en.pdf (last accessed August 31, 2011).
- 40.
Opinion of the Autorité de la Concurrence on competition in the online search market, pp 24–27.
- 41.
Opinion of the Autorité de la Concurrence on competition in the online search market, p 48.
- 42.
Press release of the Autorité de la Concurrence of 14 December 2010. It has to be added that even if the Autorité would not have perceived Google’s position the result of significant innovation, Google’s position as such could not have been prohibited. French competition law (just as European competition law) does not prohibit a dominant position per se, only the abuse of such position.
- 43.
In June 2010, the Autorité de la Concurrence had already imposed interim measures on Google Inc. and Google Ireland as a result of such lack of transparency (European Competition Network brief 05-2010, available at http://ec.europa.eu/competition/ecn/brief/05_2010/fr_google.pdf (last accessed January 23, 2011). This decision was prompted by a complaint by Navx, a company selling databases for GPS navigation, indicating the localization of mobile and fixed speed traps. Navx’s AdWords account had suddenly been suspended by Google because Google decided to change its policy for advertisers selling devices aimed at evading speed cameras. Google was instructed to restore Navx’s account and improve transparency on its policy.
- 44.
Opinion of the Autorité de la Concurrence on competition in the online search market, pp 53–62.
- 45.
European Competition Network brief 03-2010, available at http://ec.europa.eu/competition/ecn/brief/03_2010/it_google.pdf (last accessed January 23, 2011).
- 46.
Idem.
- 47.
Press release of the AGCM of January 17, 2011, available at http://www.agcm.it/stampa/news/5194-a420-as787-antitrust-accetta-impegni-di-google-e-chiede-al-parlamento-di-adeguare-le-norme-sul-diritto-dautore.html (last accessed January 23, 2011). See also, the related news item at http://www.bloomberg.com/news/2011-01-17/italy-antitrust-accepts-google-commitments-for-web-publishers.html (last accessed January 23, 2011). The AGCM stated that it also submitted a report to the Italian government, recommending that Italian copyright laws be reformed in order to deal with the complex issues of the online dissemination of copyrighted works.
- 48.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, available at http://ec.europa.eu/competition/mergers/cases/decisions/m4731_20080311_20682_en.pdf (last accessed January 29, 2011).
- 49.
For example, the SSNIP (‘Small but Significant Increase in Price’) test for product substitutability may provide better results within the context of merger control. The reason for this is that with mergers, generally the situation in which a dominant undertaking has elevated prices to such extent that every product will—unjustifiably—be considered a substitute (the so-called Cellophane Fallacy) will not occur as often as it does in relation to dominance.
- 50.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, para 45.
- 51.
‘Search related’ advertising concerns advertisements that appear next to the results of search queries by internet users, such as the ‘sponsored links’ appearing after entering a search request in Google. ‘Non-search related’ advertising concerns advertisements that can appear on any webpage and are not triggered by search requests (such as banners).
- 52.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, para 48–56.
- 53.
Idem, para 57–73.
- 54.
Ad Serving technology is technology used to ensure correct placing of the advertisements, monitor their financial performance and manage the content publisher’s inventory.
- 55.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, para 74-81.
- 56.
Idem, para 79–81.
- 57.
Idem, para 82–91.
- 58.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, para 54.
- 59.
See, e.g., the Times’ website (http://www.thetimes.co.uk/tto/news/).
- 60.
Case T-201/04, “Microsoft v EC Commission” [2007] ECR II-3601, para 917.
- 61.
Commission Decision of 11.03.2008, declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement, case No COMP/M.4731–Google/DoubleClick, para 82–91.
- 62.
ComScore reports of November 2010, available at http://www.comscore.com/Press_Events/Press_Releases/2010/12/comScore_Releases_November_2010_U.S._Search_Engine_Rankingswww.comscore (last accessed February 12, 2011). According to these numbers, Bing’s market share in the US would even be almost 30%, if one would also count the market share of Yahoo’s search engine (which uses Bing’s algorithms as a result of the above-mentioned ‘search alliance’ between Microsoft and Yahoo). In Europe however, Bing’s (and Yahoo’s) market share is allegedly still small.
- 63.
http://www.searchalliance.com/home (last accessed February 18, 2011).
- 64.
Our thoughts on the Commission review, available at http://googlepublicpolicy.blogspot.com/2010/11/our-thoughts-on-european-commission.html (last accessed February 12, 2011).
- 65.
Jones and Sufrin 2011, p 79.
- 66.
Opinion of the Autorité de la Concurrence on competition in the online search market, supra, p 46.
- 67.
Commission Decision of 16 july 2003 relating to a proceeding under Article 82 of the EC Treaty. (COMP/38.233 - Wanadoo Interactive), http://ec.europa.eu/competition/antitrust/cases/dec_docs/38233/38233_87_1.pdf (last accessed February 12, 2011), para 211–222.
- 68.
Commission Decision of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-3/37.792 Microsoft), http://ec.europa.eu/competition/antitrust/cases/dec_docs/37792/37792_4177_1.pdf (last accessed February 12, 2011), para 470.
- 69.
Case 85/76, “Hoffmann-La Roche & Co. v Commission” [1979] ECR 461, supra.
- 70.
Commission Decision of 13 May 2009 relating to a proceeding under Article 82 of the EC Treaty and Article 54 of the EEA Agreement (COMP/C-3/37.990 - Intel), http://ec.europa.eu/competition/antitrust/cases/dec_docs/37990/37990_3581_11.pdf (last accessed February 12, 2011).
- 71.
EU launches Google investigation after complaints, http://www.reuters.com/article/2010/11/30/us-eu-google-probe-idUSTRE6AT1L220101130 (last accessed February 18, 2011).
- 72.
See Google, Our thoughts on the Commission review supra.
- 73.
Foundem has explained the backgrounds of its complaint to the European Commission on its website http://www.searchneutrality.org/, thereby comparing the search results for its own price comparison website with the results for Google Product.
- 74.
Cases 6/73 and 7/73, “ICI and Commercial Solvents v Commission” [1974] ECR 223.
- 75.
Opinion of the Autorité de la Concurrence on competition in the online search market, supra.
- 76.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, para 50.
- 77.
Case 201/04, “Microsoft v Commission” [2007] ECR II-3601, para 864 and 962.
- 78.
Jones and Sufrin 2011, p 478.
- 79.
See, e.g., Case C-310/93P, BPB, and Case T-65/89, “BPB Industries and British Gypsum v. Commission” [1993] ECR II-389.
- 80.
Case 27/76, “United Brands Company and United Brands Continentaal v Commission” [1978] ECR 207.
- 81.
Jones and Sufrin 2011, p 484, as well as the there cited article by P. Jebsen and R. Stevens ‘Assumptions, goals, and dominant undertakings: the regulation of competition under the article 86 of the European Union’, (64) Antitrust L.J. 1996, pp 510–511.
- 82.
Cases 40/73, “SuikerUnie v. Commission”, [1975] ECR 1663, Case 85/76, “Hoffmann-La Roche & Co. v Commission” [1979] ECR 461, Case 322/81, “Nederlandsche Banden Industrie Michelin (Michelin I) v Commission” [1983] ECR 3461.
- 83.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, para 36.
- 84.
Jones and Sufrin 2011, pp 392–393.
- 85.
Case C-62/86, “AKZO Chemie B.V. v Commission” [1991] ECR I-3359.
- 86.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, para 63. See also supra, Sect. 2.4.3.2.
- 87.
Commission Decision regarding “France Télécom”, supra.
- 88.
See An Antitrust Complaint for Google in Germany, New York Times January 18, 2010, http://www.nytimes.com/2010/01/19/technology/19antitrust.html (last accessed February 18, 2011); German news media challenge Google, Der Spiegel January 18, 2010.
- 89.
Supra, Sect. 2.3.3.2
- 90.
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, para 1.
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van Loon, S. (2012). The Power of Google: First Mover Advantage or Abuse of a Dominant Position?. In: Lopez-Tarruella, A. (eds) Google and the Law. Information Technology and Law Series, vol 22. T.M.C. Asser Press. https://doi.org/10.1007/978-90-6704-846-0_2
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