Anti-Trust Falls: What Should Google Do?

In this article, the author examines the contents of a speech given by Joaquin Almunia of the European Commission at an antitrust conference.  Near the end of the speech (only available in French), Almunia addresses the issue of anti-competitive practices in general and remarks specifically on the European Commission’s efforts to rein in what they view as Google’s anti-competitive practices.  The author points out that Google’s competitors in Europe are not satisfied by the concessions Google has agreed to make in this latest deal which Almunia has tentatively accepted in his role as the Commissioner for Competition, but remarks that Almunia still has to communicate with all of the companies who filed complaints and that further concessions may be requested as a result.

The author makes particular mention of Almunia’s defense of his decision from the critics who alleged that he was making some sort of “gentleman’s agreement” with Google rather than making a binding legal ruling.  His response to that idea was “Pas du tout.”  The English equivalent is “Not at all.”  Apparently, the agreement was a relief for Google after previously rejected proposals to avoid the 5 billion Euro fine, but other members of the Commission would still prefer to see Google make further concessions in the interest of engendering healthy competition.  Because many things could still change in the agreement, we will have to wait and see how this situation unfolds for Google in their European market.

The outcomes of antitrust litigation and regulation are often decisive for the businesses involved, and Google’s executives are probably well aware of that fact.  If they don’t reach a deal with the European Commission, then not only do they face a large fine, but they will also probably face a penalty in the court of public opinion.  While public opinion may not be legally binding, it can devastate a company’s market share if sufficiently strong and negative.  Google’s battle has more than one front; they must battle the European Commission (EC) with lawyers and diplomats while also being careful to stay on message and positive with the public to retain customers and maintain the opportunities they have to gain new customers.

The implications for Google in Europe are not just that they will be required to grant various concessions in order to be able to continue to operate in Europe, but also that they will need to understand the perspective of EC officials.  In his speech, Joaquin Almunia makes a distinction between healthy cooperation between companies and unhealthy cooperation between companies.  Specifically, he mentions joint research projects as an example of healthy cooperation between companies.  While Google will certainly comply with regulations limiting what they can do with regard to their competitors with their search engine, it would behoove them to also try to build goodwill with the EC by taking what they consider positive steps in the European economy.  Google seems to like research and applied sciences, so it might be worthwhile to invest in some cooperative research with European companies.  This would have the benefit of generating useful opportunities for revenue growth for Google and benefits for the European economy, an outcome which is likely to be very appealing to a European Union which has had some very serious economic difficulties lately.

This entry was posted in Economics, Politics, Technology and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.