Does Google harm local search rivals? EU antitrust regulators ask

https://www.reuters.com/article/us-eu-google-antitrust/does-google-harm-local-search-rivals-eu-antitrust-regulators-ask-idUSKCN1NZ2ER

by tareqak • 8 years ago

87 65 8 years ago

reuters.com

ucaetano• 8 years ago

"Hey kiddo, do you want to skip doing homework and brushing your teeth today?"

ariwilson• 8 years ago

The EU has taken the position that all of these vertical specific search engines are industries that should be treated separately from "general search". I think this is faulty as - from a customer perspective, I just want an answer to my question regardless of the vertical - from an industry perspective every small competitor is of course going to complain that big bad X is taking their business

So we just end up with arbitrary enforcement of the rules based on which companies the EU is angriest at.

onetimemanytime2• 8 years ago

>I just want an answer to my question regardless of the vertical

You want the best answer and Google was not the best one for local for example. But they stuffed it there because the could. When competition is bankrupt or no one enter the space because Google will not rank you fairly then the problem is bigger.

Like hotel bookings, do we know if they are best for shoppers or best for Google's bottom line?

with 95% market share come responsibilities.

briandear• 8 years ago

Like hotel bookings, do we know if they are best for shoppers or best for Google's bottom line?

Sounds like a business opportunity. If the market isn’t being well served, it would seem that someone might try to serve it. You know, like maybe TripAdvisor or Booking.com or Expedia or the numerous similar companies.

We are basically saying that nobody will enter the search business because Google is too good? That doesn’t make any sense. Nobody is compelled to use Google. Every browser lets users choose alternatives. That people don’t is probably because they think Google does a pretty good job for their needs. If that isn’t true, then it should be realistic for a competitor to make it better. IBM owned computing until they didn’t — nobody thought competing with IBM was a high percentage play, but people did.

If the Europeans want to make some big tech, then perhaps making the investment, M&A, and taxation environment more favorable is a good place to start. Capital gains taxes are so high that there isn’t a huge amount of incentive for moon-shot investments in Europe. Employment law (in France at least,) is so Byzantine that there is a real fear of hiring fast and scaling quickly because the consequences of a misstep are hugely expensive. Investors in Europe look for high percentage 2x companies to fund rather than making big, bold bets on 100x companies. One of the reasons is that you have a tax structure that punishes success so the risk-reward ratio favors safer investments. There is money in Europe, but much of it is through government programs that require government friendly business plans and friends in high places to even be considered. And the money that those programs do provide, it certainly isn’t US-level. It’s extremely rare to raise €50 million in Europe, but it happens all the time in the US.

It’s the indefinite pessimism of Europe that’s the root of it. See the book Zero to One for a great explanation of that concept. Google isn’t the problem. It’s a symptom. Look at DailyMotion as a case study. The French government blocked the sale to Yahoo — which would have been a huge payday for the founders and investors — a payday they would have, in the tradition of Silicon Valley, could have been used to start angel or VC investing. (Although the original founders sold to France Telecom for a relative pittance, and France Telecom has the innovation level of a can of peas. So it’s possible to say that the sell to Yahoo wouldn’t have made any ripples in terms of creating new angel investors.) Instead DailyMotion, rather than becoming Yahoo’s YouTube, languished into near obscurity compared to YouTube.

https://m.france24.com/en/20130501-france-minister-montebour...

Vivendi finally bought DailyMotion in 2015 at a valuation far below its 2013 levels.

https://www.forbes.com/sites/jeanbaptiste/2015/04/07/dailymo...

The point of the story is the socialist government of France cared more about some misguided nationalism rather than actually creating an environment for innovation, business and growth. Even in France, YouTube is far bigger than DailyMotion and it certainly doesn’t have anything to do with Google being anti-competitive, but everything to do with this petty provincial bullshit common with European government ministers.

AnaniasAnanas3• 8 years ago

I already get different and irrelevant results that I do not care about when using google in different countries, one can only assume how much worse that would be with different local search engines. I would rather not see results for a local pasta when searching for haskell.

fjsolwmv2• 8 years ago

If Google Search harms consumers, it matters. If it harms *competitors", it's irrelevant. That's what EU regulation theory doesn't understand.

Eridrus• 8 years ago

The Google Shopping case is very interesting atm. Google have given other companies the opportunity to bid on that slot, and have separated out Google Shopping Ads as as it's own profitable entity that has to bid on that slot alongside other companies. Unsurprisingly, most of the companies that were basically surviving due to free traffic from Google have not really bought many of these slots.

If the EU does not strike that down, it will provide a template for resolving many of these commercial result complaints in a similar fashion.

srkmno• 8 years ago

The necessary song and dance to start a process that in a year and change will cost Google a "record fine".

That what happens when the unofficale mandate is to counter the success of US tech companies in the eurozone: first endow the commission with broad enforcement powers, then pursue every frivolous complaint.

Come to think about it I've built an image search engine recently, maybe I should lodge a complaint about Google for their images "vertical" search function. This whole thing is ridiculous.

ehsankia4• 8 years ago

Is there a point as which Google is just running profit negative in Europe, and they are better off just pulling off business from there? I'd love to see how much of their economy would collapse without Google, let alone citizen unrest. Just a small instance of snippet tax was shutdown pretty damn quick to the impact, imagine the impact of all of Google being pulled out of Europe.

thomasz7• 8 years ago

Yes, definitely.

There would be unrest, rioting, insurrection, and finally, civil war. Europe would be torn apart, the economy reduced to primitive agriculture. The European people will offer their prettiest daughters to Page and Brin, draped in blue, red, yellow and green veils to win back the favour of their distant and angry masters.

dazc3• 8 years ago

People would still use Google though and be unlikely to notice any difference. Plenty of data centres outside of the EU's jurisdiction and many a lot closer to the user than Dublin.

simion3144• 8 years ago

No, I assume Google has many customers that pay for the services, they can afford to dial down the crap to keep the more profitable things.

thomasz7• 8 years ago

The mandate is to regulate monopolies. Regulation is always easier if the company isn't a key player in your own economy - just compare the fines against Volkswagen in the US and Germany. And honestly, I don't think this is ridiculous at all. At least not more ridiculous than the case against Microsoft for bundling IE with windows. The only ridiculous thing is that the US has stopped any pretence of regulating monopolies by itself.

dahfizz• 8 years ago

The only ridiculous thing is that the US has stopped any pretence of regulating monopolies by itself.

The difference is that US antitrust laws require the consumer to be harmed. I think it's pretty easy to make the argument that everyone uses Google, not because they are compelled to, but because they want to because Google is better than the competition. Consumers are better off with the superior product that Google provides.

On the other hand, EU antitrust laws let them attack companies just for being big. This seems ridiculous to me because, often times, a company is big because consumers prefer it. Having a 'hobble the leader' economy necessarily hurts the consumers that want the better product from the bigger company.

pgeorgi2• 8 years ago

The search engine investigations seem to be an American tech proxy war, too: https://www.telegraph.co.uk/technology/2018/02/28/google-sti... indicates that one of the bigger complainants is the Fairsearch consortium, which seems to be influenced by Oracle and Microsoft (see https://en.wikipedia.org/wiki/FairSearch)

AnaniasAnanas3• 8 years ago

In September 2012 Oracle and Nokia joined[9] in filing a complaint regarding Android with the European Commission, alleging that its free-of-charge distribution model constituted anti-competitive predatory pricing

A "consumer protection" organization, huh? I do wonder how these lobbying organizations are even legal.

crazy_monkey• 8 years ago

No, Google's competitors are trash.

corv• 8 years ago

And why is that when many of their employees are from Europe?

The antitrust cases were lost for a reason.

thrower123• 8 years ago

The EU revealed in it's ludicrous capriciousness. I like Europe, but fuck their governments if they want to do stupid things.

rimliu• 8 years ago

Stupid things, n. — things that are not necessarily stupid but I do not agree with them.

cavisne• 8 years ago

Google should leave the EU. Drop an IP block and be done with it.

ekianjo• 8 years ago

They would probably still find a way to fine Google even if they did that. The WHY is just an excuse.

zlynx• 8 years ago

If Google had no physical presence in the EU then Google can just ignore the fines. The US won't force them to pay fines levied by a different country. They'd have to win a US court case.

Just like China can be upset with Wikipedia. Wikipedia can tell them to pound sand.

thefounder4• 8 years ago

And then what? Loose almost 50% of its value?

adventured• 8 years ago

All of Europe is about 1/3 of Google's sales. The US is close to 50%. The EU minus the UK is probably more like 25%.

They could certainly rationally abandon the EU market if the fines continue to outpace what the entire EU search market is worth in profit. If you're Google and you can stay somewhere close to break-even on the fines, it's worth staying in the market just to suppress potential competition.

The ideal solution however is the for the US to respond by targeting EU companies, for example Volkswagen and Deutsche Bank (soon to be nationalized as it's collapsing) as two they've already very clearly gone after.

ehsankia4• 8 years ago

These fines are quickly adding up to more than their profit in Europe anyways. Once they reach the point of running profit negative in Europe, wouldn't it actually a better business move to pull out?

rtomanek• 8 years ago

Why, pray tell?

AnaniasAnanas3• 8 years ago

Drop an IP block

Why? They can leave the EU without IP blocks.

mrhappyunhappy• 8 years ago

It's interesting that complain was made by a US company - Yelp. I'm curious to who the other rivals in the complaints were.

hahla• 8 years ago

Slightly off topic to your commment but... I’m actually concerned watching Google increasingly cut into it’s search results. It’s easy to justify it as one additional feature but take a look how search looked like 10 years ago to what it looks like today. Even companies who provided services in specific verticals are being axed overnight by Google adding a widget to search. Google reviews are growing exponentially in search importance and that’s becuase the priority and UI they can implement to highlight google reviews vs a traditional search result (yelp). The internet landscape will look completely different in the next 10 years.

onetimemanytime2• 8 years ago

Did you expect Yelp to sit and watch their listings on into page 3 and not complain because of "patriotism"?

It's not the fine that's crippling, it's the changes that must be made. Google might make 20100-like profits in EU

joejerryronnie2• 8 years ago

At this point, US tech should go political full court press on the EU. Just bait Trump into action based on European protectionism and “national security”, sit back and watch it burn.

The ironic thing is that eventually, the EU will push out US tech but it will not be replaced with Euro tech. It will be replaced with Chinese tech and good luck to Vestager on squeezing one single penny out of Xi.

thomasz7• 8 years ago

There is zero evidence that the EU is trying to push out US technology companies or that there is any plan to run some form of import substitution. These fines are not arbitrary, and they do not hit "tech", they hit tech monopolies with blatantly anticompetitive behavior like intel, Microsoft and Google as well as European breweries, maritime car carriers, cement plants and what not.

This is a fantasy, or more likely a projection of your own newly awakened jingoistic tendencies.

Does Google harm local search rivals? EU antitrust regulators ask

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