The FTC”s Jonathan Leibowitz is taking home what seems a clear message to the USA from his European counterpart, Joaquin Almunia; “Search bias just won’t fly over Europe.”
On Monday FTC Chairman Jon Leibowitz met with European Commission (EC) competition commissioner Joaquin Almunia (at left) to discuss complaints that search giant Google has wrongly leveraged their dominant search position in competing with rivals. Facing what could be multiple billions in fines, and no telling what value brand wise, Google has naturally circled their wagons to defend what may end up being the indefensible.
By most accounts late yesterday and early today, the takeaway from these crucial meetings in Brussels seems to be that Joaquin Almunia and the European Commission will remain diligently on course for forcing Google compliance with fairness regulations there. Reports that the FTC’s stance on Google and antitrust could be wavering, apparently had no effect on regulators in Europe. And, if news of the record fine levied by Almunia’s European Competition Commission cannot be taken as a “signal” to Google, regulators there missed a prime opportunity.
The European Commission fined electronics makers $1.92 billion over alleged price fixing just two days (Wednesday) after Joaquin Almunia and Jon Leibowitz (below right) chatted about Google . The electronic manufacturers were even labeled a cartel, a term not freely used since OPEC banded together to set prices. Complaints from the likes of Microsoft, and some others in the US, the UK, France, Germany, Italy, and Spain forced the European Commissions’ and the FTC’s oversight to kick into gear over whether Google has operated unfairly. Now it’s clear that regardless of any weakness by the FTC, Google’s position in the EU is shaky (readers can see the Almunia press conference text here).
As to Google’s stance on the whole matter of monopolistic accusations, the company has called in the firm’s executive chairman, Eric Schmidt, to fence with regulators. Schmidt said that his company has done nothing to breach either EU or US antitrust laws. In fact, if Schmidt’s tone in all this means anything, the world’s biggest Internet brand seems confident, even to the point of being arrogant (indignant?). Schmidt has been quoted as challenging European end EU regulators to sue Google, or drop the matter.
At the end of this Google antitrust situation stands the risk for tens of billions in fines and other damages versus a company once branded by Co-founders Sergey Brin, Larry Page as one that would “Don’t be evil”.
Ironically, the original so-called Google Manifesto was inextricably tied to segregating search results from advertising. This “Don’t Be Evil” dogma can be seen here in Google’s original IPO S1 Registrations Statement. I quote a pertinent part of the passage there:
“We believe it is important for everyone to have access to the best information and research, not only to the information people pay for you to see.” (editor’s note: obviously things have changed since)
Evil or good, sending the United States’ fairness regulator home followed by a record fine for the likes of Philips and LG electronics (the two biggest fined Wednesday) should probably be considered pointed proof of at least the differences between North American regulators and European ones.
The Europeans could penalized the US search giant as much as 10% of their 2011 earnings, or some $2.9 billion. But for worldwide reputation, this is a small number comparatively.
Finally, the complaints against Google hinge largely on how searches are displayed too. Regulators say competitor’s results are not shown the same as paid results or Google’s own offerings. While this may seem like a splitting of hairs, Google is arguing that its search results are impartial, relying on the algorithm to deliver “useful, relevant information for consumers.” This begs the real question for any search engine; “Are users seeing what they want to see, or are they seeing what Google (Bing, whoever) wants them to see?” And too, just how “relevant is relevant?”
A last note: The Washington Post reported yesterday the US Department of Justice discussing monopolistic behavior from Google with “interested companies”, as Hayley Tsukayama reports it; “The Federal Trade Commission is currently looking into Google’s search practices, but insiders say the FTC action may not focus on search bias.” As for the DOJ, that agency has broader powers in dealing with monopolies and such.