Pun­ish­ment with­out crime

A $2.7 bil­lion fine against Google shows Europe and Amer­ica have dif­fer­ent ap­proaches to fight­ing mo­nop­oly.

The Washington Post Sunday - - SUNDAY OPINION - EDI­TO­RI­ALS

AL­MOST EX­ACTLY 4½ years af­ter the U.S. gov­ern­ment’s lead­ing an­titrust agency de­cided that Google had not un­law­fully abused its po­si­tion as the world’s No. 1 In­ter­net search en­gine, the Euro­pean Com­mis­sion in Brus­sels has reached a con­trary con­clu­sion. Af­ter lengthy in­ves­ti­ga­tion, the com­mis­sion ruled that Google had vi­o­lated Euro­pean an­titrust law, and slapped the U.S.-based com­pany with a $2.7 bil­lion fine. This turn of events proves the United States and Europe have dif­fer­ent ap­proaches to fight­ing mo­nop­oly. And while the lat­ter’s is cer­tainly more sat­is­fy­ing to the Sil­i­con Val­ley giant’s many crit­ics, that does not nec­es­sar­ily make it su­pe­rior, in terms of an­titrust pol­icy’s core pur­poses.

Ob­vi­ously the whole mat­ter has got­ten caught up in Euro­pean angst over the dom­i­nance that U.S. com­pa­nies ex­er­cise in this cru­cial in­dus­try. But to the ex­tent that there was a real is­sue, it was Google’s shop­ping tool, which af­fords priv­i­leged treat­ment to paid spon­sors in re­spond­ing to queries from con­sumers. Search “women’s ECCO shoes” on the Ger­man ver­sion of Google, for ex­am­ple, and up pop var­i­ous of­fer­ings for Birken­stocks from a se­lect group of ven­dors — ac­com­pa­nied by a note, in tiny type off to the side, in­di­cat­ing that “mer­chant links are spon­sored.”

Google ar­gues that this is not a case of In­ter­net pay­ola, but a search re­sult that bal­ances the con­sumer’s in­di­vid­ual needs and pref­er­ences, based on the data the com­pany pos­sesses about him or her — and Google’s need to make enough rev­enue to stay in busi­ness crunch­ing all that data. In fact, the firm in­sists, it wouldn’t be in its in­ter­est to do any­thing truly skewed by ad­ver­tis­ing dol­lars, be­cause con­sumers would quickly catch on. The Euro­pean Com­mis­sion dis­agreed, in ef­fect sid­ing with com­par­i­son shop­ping sites that claimed Google un­fairly shut them out — many of which had, in fact, al­ready gone out of busi­ness in the time it took the com­mis­sion to rule.

Whether the demise of any of them is specif­i­cally trace­able to Google, how­ever, is not so clear. Also un­clear is the ag­gre­gate harm from Google’s prac­tices to con­sumers, as op­posed to the un­lucky com­pa­nies. Birken­stock-seek­ers may well pre­fer to see a Google-gen­er­ated list of ven­dors first, in­stead of click­ing around to other sites. Cer­tainly Google’s dis­clo­sure of its spon­sor­ship ar­range­ments adds a small but non­triv­ial note of trans­parency. Those who aren’t happy any­way have other op­tions. In­deed, the rise of com­par­i­son shop­ping on giants such as Ama­zon and eBay makes con­cerns that Google might ex­er­cise un­tram­meled power over e-com­merce seem, well, a bit dated. (Ama­zon’s founder and chief ex­ec­u­tive, Jeffrey P. Be­zos, owns The Post.) Who knows? In a few years we might be talk­ing about how Facebook lever­aged its 2 bil­lion users to dis­rupt the whole space.

The im­mense size and power of all In­ter­net giants are a le­git­i­mate fo­cus for the an­titrust au­thor­i­ties on both sides of the At­lantic. Brus­sels vs. Google, how­ever, seems to be a case of pun­ish­ment with­out crime.

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