EU Takes A Swipe At Google - But Why?

The EU Commission has a bit of a gripe with Google over its size and reach, and is currently in the throes of taking it to court on anti-trust grounds. But why? Other internet provision services exist, right?

Per Matthew Finnegan at Computerworld, the EU Commission believes it's got the global internet giant bang to rights, and has a timeline of the five year case on one blog post.

The case

The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search. First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe. Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems. In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space. - European Commission - Press release - Antitrust: Commission sends Statement of Objections to Google on Android operating system and applications

Erm, that's bogus. I've got the option to use any search engine I want on my phone, which has an Android OS. I can easily access Bing or any other search engine simply by carrying out a search on "Search engine" on it. Besides, every computer ships with Microsoft Windows. If you want to install another operating system you have to go and dig one up and download it from a source that hasn't been compromised in some way, and you need to know what you're doing. Number of objections to Microsoft owning office and home computing OS: nil.

...it appears that the issue here with Google is that it requires all of its core services to be bundled together: so if you want to offer the Google Play Store, then you have to also offer the other pieces of the Google app suite so that they work well together. But, of course, this also doesn't stop phone makers or service providers from adding their own apps as well. - EU Officially Goes After Google's Android On Antitrust Grounds, by Mike Masnick for Techdirt

There is no harm to the consumer from any of this. Besides, Google's grip on the search market is weakening; Mozilla made Yahoo its default search engine in November 2014 and Apple has made Bing its default search engine.

So what's going on? This is down to a five year old feud.

The cause

This appears to be the result of a two-pronged attack: Microsoft's muck-spreading and a mad EU Commission idea that hobbling Google would give European startups a leg up. Let's take a closer look.

Microsoft's muck-spreading

On 31st March 2011, Microsoft formally made a complaint to the EU Commission over Google's dominance in the search market.

Microsoft Corp stepped up its rivalry with Google Inc, claiming in its first-ever complaint to antitrust regulators that Google systematically thwarts Internet search competition.

The formal complaint to European Commission regulators marks a role change for Microsoft, itself the target of antitrust action for two decades in the United States and Europe.- Microsoft files EU competition complaint vs Google, by Bill Rigby and Foo Yun Chee for Reuters

That was a bit rich considering they'd not only plagiarised Google's search algorithms for Bing, but they'd done all that and still came up with an inferior search engine. Bing denied it but Google ran a sting and caught them red-handed. A month or so later, Microsoft launched its complaint — about Google's dominance in search. This was on the back of a campaign led officially by including UK-based price comparison site Foundem—the original complainant in the antitrust case against Google in November 2010.

"Hobble Google to give local companies a chance"

Techdirt explains this better than I can:

...the EU's digital commissioner, Gunther Oettinger, has announced that the EU should regulate American internet companies to provide a bigger opportunity for European companies:

The European Union should regulate Internet platforms in a way that allows a new generation of European operators to overtake the dominant U.S. players, the bloc’s digital czar said, in an unusually blunt assessment of the risks that U.S. Web giants are viewed as posing to the continent’s industrial heartland.

Speaking at a major industrial fair in Hannover, Germany, the EU’s digital commissioner, Günther Oettinger, said Europe’s online businesses were “dependent on a few non-EU players world-wide” because the region had “missed many opportunities” in the development of online platforms.

Mr. Oettinger spoke of the need to “replace today’s Web search engines, operating systems and social networks” without naming any companies.

Obviously, the details of the charges against Google matter quite a bit, but, as we've said in the past, it seems odd that technocrat regulators seem to think that they know how to better design a search engine or a social network than the companies who have actually been doing so. Furthermore, the idea that European companies are at some sort of inherent disadvantage to American startups seems disproved by the success of multiple European internet companies, including Spotify and Soundcloud. Those companies didn't succeed by having regulators kneecap their competitors, but by building a better product. - EU Official Says It's Time To Harm American Internet Companies Via Regulations... Hours Later Antitrust Charges Against Google Announced, by Mike Masnick for Techdirt

What Mike says. But this isn't really about giving local tech companies a leg up over the bound and gagged body of Google. This is about the Preciousss copyright.

[EU Commissioner Andrus] Ansip seemed to indicate that he was upset about how much YouTube paid artists:

Andrus Ansip, who is overseeing an overhaul of the bloc’s copyright rules, said the YouTube’s comparatively small payments to artists gave it an unfair advantage over rivals such as Spotify, the Swedish streaming service.

“This is not only about rights owners and creators and their remuneration — it is also about a level playing field between different service providers,” said the former prime minister of Estonia. “Platforms based on subscriptions are remunerating those authors; others service providers do not. How can they compete?”

Different services have different business models and offer different features and benefits. That's how competition and innovation work. - EU Regulators Seem To Think They Can Tell YouTube That Its Business Model Should Be More Like Spotify, by Mike Masnick for Techdirt

So, in the name of giving local startups the opportunity to compete on a more level playing ground, Ansip wants to interfere in the way that Google pays its content providers. The trouble with taking this approach is that Ansip doesn't understand how the market works. I've said for ages now that the market isn't free. That does not mean for a moment that there's no such thing as the market. The demand-side will decide who wins or loses, not the EU and certainly not the big players. Besides, this is a "Be careful what you wish for situation": the rules they plan to bring in are a lot more likely to either backfire or hurt the smaller local companies that can't bear the burden of regulation, e.g. instantly remove objectionable content, like the bigger ones can. To nobody's surprise, the issue of "ancillary copyright," where a monopoly rent is due for linking with snippets, is buried in the details. Ansip is still open to this despite what happened when Spain implemented it.

Conclusion

Whether you take issue with Google for using your search history, etc., for marketing or not, there's no good reason to go after it on the grounds of trust-busting or for copyright/remuneration of creators. Google isn't stopping anyone else from competing and other services exist; it's not stopping them or even slowing them down. In fact, if anyone is getting in the way of innovation in European tech, it's those meddling morons who think that extending monopoly privileges and pretending they are property rights will enable us to pull ahead of the Americans. If only they realised the truth: enforcing incumbent proprietary regulations actually holds us back. And by the time they realise this I daresay China and India will have hopped, skipped, and jumped ahead of us using rent-seeking strategies of their own to keep us from catching up.