Google Debate : The Competition Commissioner is Wrong

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There’s a lot at stake: Francisco Pinto Balsemão Bild: impresa

In a letter published in this newspaper, the European Commissioner Joaquín Almunia has claimed that he would limit the power of Google. But this is precisely what he fails to do. Francisco Pinto Balsemão, Chairman of the European Publishers Council, responds to his letter.

          7 Min.

          On 13 May 2014, FAZ published a letter from EU Competition Commissioner Joaquín Almunia defending the agreement he has negotiated with Google, an agreement which remains to be ratified by the full Commission.   His intervention in support of his position (and of Google) was in response to an open letter to Google’s Eric Schmidt from Mathias Döpfner, the CEO of German publishing house Springer Verlag which was published in your newspaper a month ago. In his letter, Mr. Döpfner strongly criticised Vice-President Almunia’s remedies to settle the Commission’s long-running antitrust case against Google.

          By joining this debate about the unfair commercial practices of Google, I speak as a publisher, a media entrepreneur and as the Chairman of the European Publishers Council (EPC), representing leading European media corporations active in all news media markets, and on behalf of the majority of our CEO members, if not all. The EPC companies are digital entrepreneurs, creating jobs, high quality journalism on all platforms and devices and at the forefront of the transformation of news media in the digital age. We are not looking for special treatment: on the contrary, we thrive on competition.

          A very high market share

          I also want to be clear that my criticism is directed at the post of European Commissioner for Competition and bears nothing personal against Joaquín Almunia, my old friend for many years and a companion in fights for freedom of information that go far beyond the uses and abuses of Google.

          In his response, Commissioner Almunia concedes that “[t]here is no question that Google’s market dominance poses a number of challenges for our economy and our society,” and he recognizes “Google’s very high market share and its role as a de-facto gate keeper of the Internet” and indeed on 23 May the New York Times reported that the European Union’s antitrust chief had said that he might yet take a tougher stance toward Google.

          However, Commissioner Almunia’s letter in FAZ avoids the key issues, mischaracterises others, and fails to address the problem of how to restore effective competition in the critical markets of search and search advertising.  Just as importantly, he claims that the deal will benefit consumers despite the fact that Europe’s consumer associations, BEUC, have forcefully and formally objected to the proposed settlement and replied in open letter in this newspaper on 23 May 2014.

          Six years lost and the puzzle is not completed

          The Commission’s investigation into Google’s anti-competitive behaviour started in 2008 as a result of complaints from third parties and not, as the Vice President implies, on the Commission’s own initiative.  The principal concern was that Google was using its dominant position to eliminate competition in the markets for search and search advertising and to leverage that dominance into adjacent markets.

          We are now in May 2014.  Six years have been lost and meanwhile all the negative effects of Google’s practices have endured and indeed multiplied. Google’s power has grown and Google’s ambitions too (from the acquisition of drone manufacturer “Titan Aerospace” to the dream of Larry Page, one of the two Google founders: “There’s many, many exciting and important things you could do that you just can’t do because they’re illegal”.

          This problem requires a courageous political vision. Vice President Almunia himself recognises this when he says: “There is no doubt that the power held by Google poses numerous challenges to our economy and to our society.” He even names some of the “concerns”: … “…the way the Android environment works, the gathering and use of vast amounts of personal data, the use of third party content and compliance with intellectual property rights, and tax planning practices”. All this, he writes, “equally deserve the attention of public authorities.”. I agree but Mr Almunia prefers to address only his own “piece in this puzzle” and hopes the others will be addressed “using the right policy argument”. This is undoubtedly the best way to go about never finishing a puzzle.

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