Antitrust Investigation

Google No Longer the Good Guys

Google-dont-be-evil
Don't be evil!
  • Why it matters

    Why it matters

    While the antitrust case against Google will likely drag on for years, the E.U. can levy fines of up to 10 percent of the company’s global net income, if the charges stick.

  • Facts

    Facts

    • The European Commission announced antitrust charges against Google on Wednesday.
    • European companies have long been complaining about the business practices behind Google’s market domination.
    • It controls 90 percent of the European Internet search market.
  • Audio

    Audio

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Judges and priests may be on the frontlines of determining good and evil in this world, but the American company Google has positioned itself close behind. It even invented a catchy corporate motto to go along with its combat in the global market: “Don’t be evil.”

The “Googlers,” as they call themselves, employed a crack team of lobbyists to ensure that their point of view –  dispensed from on high at their global headquarters in Mountain View, California – could be spread to all corners of the earth. Eric Schmidt, their executive chairman, serves as their apostle, tasked with explaining the new world through his various books, not unlike the Gospels.

Thus far, Google has been extremely successful with its mission of a good life in its core markets in the United States and Europe. The giant grew and most of the rest walked away.

Now, the E.U. Commission in Brussels is daring to revolt against the Internet firm, kicking off a long overdue investigation into whether or not everything at the company is really being handled to the benefit of humanity. Or if it is actually one of the worst offenders when it comes to hobbling the competition, leaving behind destroyed markets and not letting new ones emerge.

There are many indications that the firm founded by Larry Page and Sergey Brin manipulated the search results of its own overly powerful search engine (which has 90 percent of the German market).

The charge is a sign of Europeans’ emancipation from the dominating Internet companies from overseas.

Search results that referenced rivals were found under “also-rans,” while its own Google Shopping services were promoted. There are indications that Google used its Android operating system to exert pressure on its market partners.

In the end, that could even be the bigger issue in the Google investigation process. It is certainly the right time for the E.U.’s antitrust complaint – time to shine a light into the dark world of data specialists, who guard their algorithms like crown jewels and dominate the global online advertising market so masterfully that they will possibly some day take over the business of media agencies as well.

Everything is just a click away, as the Googlers would say.

The charge made by E.U. Commissioner Margrethe Vestager is a sign of Europeans’ emancipation from the dominating Internet companies from overseas, which were able to exploit their colonies with large profits and low tax rates and to lull politicians into acquiescence by a mixture of admiration and fear.

It was Ms. Vestager’s predecessor, Joaquín Almunia from Spain, who forged a compromise that was as solid as a marshmallow in the fight that has been going on for years. After just a couple of concessions and no serious punishment, everything was good again. There was no evil.

This soft line against Google was only abandoned after joint resistance from Germany and France, which formed a helpful blockade against the steamrolling lobby from the United States. Google’s top messenger, Mr. Schmidt, could no longer get an appointment with the courageous Dane, Ms. Vestager.

The Google strategists in the United States have never experienced anything like that. The company’s relationship with the Democratic Party there is especially reliable. During his reelection campaign in 2012, President Barack Obama must have been happy that Google was his second largest donor. And it is somehow fitting that a Google executive will head technology development in Hillary Clinton’s new presidential campaign.

With so much all-round harmony, it is perhaps easier to explain how a critical report from the antitrust authority FTC in 2013 fell by the wayside. The experts determined that Google misused its power to the detriment of consumers and advised lawsuits in three cases.

The international public just recently learned about that, when internal documents were leaked to the Wall Street Journal. Google had officially bragged that the FTC investigation had found that its own services were good for users and competition.

Today the “don’t be evil” strategists from Google look like saints who have lost their halos. A U.S. senator wants to investigate what exactly happened in the FTC, and what the company’s representatives promised the White House. Regulators are also going after the company in Argentina, India, Brazil, Canada and Taiwan.

The controversial company loves to focus on “moonshots” – lofty projects that are supposed to tackle cancer or Alzheimer’s disease, for example. But now the technology freaks must devote themselves to a very earthly problem: the evil that might come out of the investigators’ files.

 

To contact the author: jakobs@handelsblatt.com

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