The Sunday Telegraph reports that the EU is poised to fine Google an EU record ~€3b for “web search monopoly abuse” and that “Google will be banned from continuing to manipulate search results to favour itself and harm rivals.”
Assuming this occurs in the reported June-July timeframe, and just like the EU’s 2015 Statement of Objections charged, the long-term ramifications for Google will be much broader and more serious than most appreciate.
That’s because Google has been so masterful in managing public, media and investor expectations that this day would never arrive, (because Google had done nothing wrong and Google was on the right side of competition in offering free, high-quality, and innovative services that benefited consumers); and that it was really EU regulators who were in the wrong because they were protectionists who were also “wrong as a matter of fact, law and economics.”
Why is the pending outcome here so problematic for Google?
First, Google has long maintained it is not a monopoly and has done nothing wrong, critical premises undergirding the public’s trust in Google, its algorithms, the objectivity of its search results, and its brands.
The EU’s pending decision per the Statement of Objections, will rule that Google “has abused its dominant position in the markets for general internet search services in the European Economic Area (EEA) by systematically favouring its own comparison shopping product in its general search results pages…” and that “Google has a dominant position in providing general online search services throughout the EEA, with market shares above 90% in most EEA countries.”
Simply, the EU will be ruling as a matter of law that Google is in fact a monopoly that has done wrong.
Second, what’s different here is this will be the first official search antitrust conviction of Google in the world, and it will be for abusing its search dominance to the detriment of consumers, competition and innovation.
Both the U.S. FTC’s negotiated settlement with Google in 2013, and the Canada Competition Bureau’s negotiated settlement with Google in 2016, afforded Google the opportunity to continue to represent itself publicly as not a monopoly, and that it had done nothing wrong.
Third, the EU’s pending ruling that Google “abused its dominant position” in search “by systematically favoring its own comparison shopping product in its general search results pages,” and its pending mandated remedy, that “Google should treat its own comparison shopping service and those of rivals in the same way,” both expose that Google has long fundamentally misrepresented its business model to the public, i.e. that it’s algorithms are neutral and unbiased, when they are not.
For over ten years, Google’s current “About” page has publicly asserted: “Ten things we know to be true. We first wrote these “10 things” when Google was just a few years old. From time to time we revisit this list to see if it still holds true. We hope it does—and you can hold us to that.” … “Focus on the user and all else will follow. Since the beginning, we’ve focused on providing the best user experience possible.”… “We never manipulate rankings to put our partners higher in our search results and no one can buy better PageRank. Our users trust our objectivity and no short-term gain could ever justify breaching that trust.” [bold added] … “It is best to do one thing really really well. We do search.”
Simply, the expected EU ruling will conclude that Google has manipulated its search results since 2008, which means what Google claims it knows to be true – in fact, is not. Google lied.
In sum, this pending outcome is highly problematic for Google because its cuts to the heart of who Google is, what it does, and what it promises to be.
It officially exposes Google as a search monopoly that systematically manipulates search results in ways that undermine trust in Google, its search algorithms, and its public claims of neutrality and objectivity.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.