Remember "Don't be evil"? It is Google's admirable early company mantra, and in the beginning, it was widely seen as a reaction against the rapacious behaviour of Microsoft.
We don't hear so much about "Don't be evil" any more, but it was hard not to be reminded of it this week, when EU competition commissioner Margrethe Vestager issued a "statement of objection" against Google, accusing the technology giant of abusing its dominance in web search in the online shopping space.
“Our preliminary view is that in its general internet search result, Google artificially favours its own comparison shopping service and that this constitutes an abuse,” said Vestager, who took over as competition commissioner from Joaquín Almunia last year and who boasts a reputation for fearlessness in her native Denmark.
Under Almunia, the European Commission had conducted a five-year investigation into Google without reaching a final settlement, but Vestager's move escalates things considerably, and she is also starting an investigation into Google's Android mobile OS.
Online competition
In response, Google has reasonably pointed out that the online competition is just a click away, as well as being strong and growing, but there is an unmistakable echo here of Microsoft’s interminable, labyrinthine antitrust cases in the EU and the US. Those cases covered a range of their businesses and stretched on from the mid-1990s, doing considerable damage to the software giant’s reputation.
There are some rather stark differences, of course: Google’s dominance in search and other fields is built on the sustained excellence of its products, not something that could be said of Internet Explorer.
Also, the company displays none of the almost gleeful intimidatory behaviour that marked out Microsoft at its worst under Bill Gates.
But in both cases, large, slow-moving regulatory bodies are attempting to tackle the large, fast-moving technology world, and the inherent asymmetry of the battle can lead to some rather unsatisfying and belated outcomes.
This week’s news, however, also highlights stark differences in the approach of US and EU regulators.
In March, the Wall Street Journal published memos from the US Federal Trade Commission detailing evidence internal staffers gathered in putting together a potential antitrust case against Google in 2013.
‘Scraping’ content
“Staffers in the FTC’s bureau of competition found evidence that Google boosted its own services for shopping, travel and local businesses by altering its ranking criteria and ‘scraping’ content from other sites,” the
WSJ
reported. “It also deliberately demoted rivals.”
That sounds like a smoking gun, and FTC staffers were strongly of the opinion that Google should be pursued. As the Washington Post subsequently reported: "Although then FTC chairman Jon Liebowitz was confident about suing Google, other commissioners such as Edith Ramirez, who now chairs the commission, and Thomas Rosch were more sceptical about the strength of the agency's case."
Senior FTC figures, it seems, looked at how long, exhausting, expensive and unsatisfactory the Microsoft case was and calculated that this was a fight best avoided. Instead, the FTC reached a voluntary agreement with Google.
The calculus for Vestager is rather different: for a new EU commissioner, there is a lot of political upside to taking on a US behemoth such as Google.
Not unlike the new prisoner who gets into a scrap with the toughest inmate to display their fearlessness, this move sends a strong signal to other potential antitrust subjects.
Google has 10 weeks to respond to the commission’s charge sheet, but consider this the prelude to a protracted battle.
