Editorial

New tech, old values: European Commission's fine on Google

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The EC’s massive fine on Google points to the changing role of regulators

The long arm of the European Commission has once again struck the technology world with the imposition of a €2.42 billion ($2.7 billion) fine on Google for the company’s abuse of its market position. The Commission found that Google abused its dominance in the Internet search market to give itself an unfair advantage in another market — comparison shopping services. Google’s comparison shopping service disadvantaged competitors by placing them lower in its search results, systematically giving Google’s own services higher placement and greater visibility, leading to more clicks. Google, which is required to pay the fine within 90 days, may appeal the decision. While the fine itself is unlikely to pose financial problems for Google, whose parent company, Alphabet, posted a profit of over $55 billion in 2016, the impact on how Google does business is likely to be significant; the Commission has said, and rightly, that it would leave it to Google to remedy the situation. The European Union’s Competition Commissioner, Margrethe Vestager, also said the ruling could guide future decisions on complaints around Google favouring its own products and services via its search engine. The verdict is the latest in a long list of actions the EU has taken against tech companies from across the Atlantic. From a fine earlier on Microsoft for bundling its browser and operating system together, to a record €13 billion tax bill slapped on Apple last year for back taxes owed to Ireland, Brussels has signalled in no uncertain terms that it is determined to take on large tech companies, some of which have become gargantuan transnational entities, in the interest of its citizens.

 

The old idea that market power cannot be used to stymie competition, a result of which is a lowering of consumer choice and welfare, is good even when the market is new and changing rapidly, as happens at the technological frontier. Attempts to cast Google’s run-in with the Commission as a game of trans-Atlantic dominance have quietened down, partly reflecting the wariness with which the current White House views tech giants, many of whom spoke vociferously against Donald Trump’s ‘travel ban’. In contrast to criticism from the U.S. government when the Google complaint was first lodged and for the Apple tax bill of 2016, the White House refrained from getting involved after the EU fined Google. The fault lines between tech giants, which often act as supra-national entities, and national and multinational governmental bodies, are changing fast as the relationship between citizens, their governments, media and technology is transformed. In the years to come we can expect new lines to be drawn as technological frontiers are crossed. While technology is constantly changing, valuing choice, competition and consumer welfare never gets outdated or obsolete.

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Printable version | Jan 24, 2020 11:20:48 AM | https://www.thehindu.com/opinion/editorial/new-tech-old-values/article19165985.ece

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