Handelsblatt Exclusive

Praise for EU Google Fine

Google
Google is appealing the EU decision, but Germany is praising it. Picture source: DPA

Matthias Machnig, Germany’s deputy economics minister, has praised the European Commission’s decision to impose a record €2.42-billion fine on Google for violating EU competition rules.

Mr. Machnig told Handelsblatt that the commission’s decision was a “correct and important step.” The EU executive found that Google had favored its comparison-shopping service over rival platforms in its search results. In Germany, this allegedly put websites such as billger.de and idealo.de at a disadvantage. Mr. Machnig called for tighter regulation of digital platforms in the wake of the decision.

“The decision of the European Commission demonstrates two things,” Mr. Machnig told Handelsblatt. “First, we need clear regulations for platforms and second we need quick competition proceedings.”

The European Commission announced the fine earlier Tuesday. Google, which is appealing the decision, has 90 days to change its practice or face further fines down the road.

“Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” Commissioner Margrethe Vestager, in charge of competition policy, said in a statement announcing the decision.

German companies also welcomed the move. A spokesperson for the German comparison-shopping website billiger.de said the company’s revenues had declined in a “near one-to-one” ratio as the website dropped lower and lower in Google’s search results.

It’s this kind of thing that German politicians hope to prevent in future. The economics ministry presented a white paper in the spring with proposals for how to restructure the digital economy. In the document, the ministry says “competition between platforms and established market actors must be fair.” Regulations must keep pace with the development of the market, the document says, otherwise “omnipotent players will arise.”

The commission’s decision could also open the door to compensation claims. Wolfgang Sander-Beuermann, chief executive of the search engine Metager, said he expects the defendants in the antitrust case to now seek damages from the Silicon Valley giant.

Some competitors, however, are still fearful to speak up. “Everyone is trying to keep their mouth shut because they fear Google will flatten them,” a branch insider told Handelsblatt on condition of anonymity.

Others believe the decision takes Google down a notch and reduces the fear among rival services that the US giant will target them if they grow too big. Philipp-Christopher Peitsch, managing director of the price-comparison platform idealo.de, said he expects investment to increase steadily in rival services, because companies will no longer be paralyzed by the question, “What will Google do?”

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