“My services are currently examining some allegations of anti-competitive conduct in relation to search….I am looking at the allegations very, very carefully.”
With these words the Commissioner for Competition, Vice President Almunia, concluded his remarks yesterday at a speech in London that had been widely trailed in advance as a significant signal of the Commission’s intentions in relation to Google.
There was much to ponder in the speech. While acknowledging the complexity of online markets, the Commissioner stressed that “the principles of competition must be maintained in the digital economy with the same intensity that they are imposed in the brick and mortar world”. He focused in particular on the search and search advertising markets. While noting that these markets are constantly evolving he expressed concern at the existence of very high market shares in some areas, attributing to Google a usage share of 95% in Europe.
It is usual for such speeches to be very carefully worded, to avoid any impression that issues are being pre-judged. Therefore the Commissioner was careful to underline that market definition can be a difficult exercise and that market share on its own does not always signify market power. But probably of most interest to those concerned about healthy competition in search, was the fact that he went beyond mere discussion of market structure and addressed questions of behaviour.
Echoing complaints that have been filed against Google, he raised the problem of search results being “manipulated” by the search engine and questioned whether the risks could in part be addressed by transparency. However he also suggested doubts as to whether even transparency would be enough to counter the harm to competition caused by such manipulation.
ICOMP welcomes this public contribution to the debate over Google’s market power and behaviour. In speaking out now the Commissioner has clearly issued an invitation to all market participants to come forward, and quickly, if they have evidence to contribute to his investigation. All the signs are that the Commission will want to move ahead soon.
But while that investigation continues, Google is not standing still. In addition to its attempts to gain preferential access for its search engines to millions of books through the Google Book Settlement it has recently announced its intentions to spend $700 million on the acquisition of ITA. That transaction, if permitted to continue, would give Google control over an essential input for travel search services. Like so many of Google’s acquisitions, this deal will probably escape merger scrutiny by the European Commission but it may nevertheless trigger the merger thresholds in a number of EU Member States. ICOMP would urge the competition regulators in the EU member states as well as elsewhere in the world to ensure that their rules are fully enforced, and to play their part in achieving a truly competitive online marketplace.
David Wood
ICOMP Legal Counsel