Ramon Tremosa i Andreas Schwab expliquen les novetats sobre el cas de Google a Brussel.les

19/11/2014
Els dos eurodiputats han fet una roda de premsa davant els mitjans internacionals

Adjuntem el text que s'ha repartit avui als assistents a la roda de premsa:

 

Andreas Schwab MEP (EVP/CDU)                                                   November 2014

Ramon Tremosa i Balcells MEP (ALDE/CDC)

 

 

PRESS CONFERENCE

19th November, 11am

 

ANNA POLITKOVSKAYA room

European Parliament

Brussels

 

 

The antitrust procedure against "Google" - five years after the start of investigations in 2010

 

The antitrust procedure against Google is in its fifth year now. In the past, Google has failed to propose adequate remedies to address the Commission’s concerns and continued to pursue its practices unabatedly. It continued thereby to suppress competition to the detriment of European consumers and businesses. This paper gives a compact overview of the antitrust procedure and an insight into the ideas and proposals of remedies we present.

 

 

I.The state of play in November 2014

 

a.Facts on the "alleged" dominant market position

b.Facts on the proceedings

 

 

II.Possible next steps within the antitrust procedure

 

1.   Settlement

2.   Statement of objections

 

A possible solution: a ‘rotation mechanism’ for the general web search

 

 

IV.Legislative options for the development of the digital market: regulation of search engines

 

 

 

I.          The state of play in November 2014

 

a. Facts on the "alleged" dominant market position

 

1.Google gives preferential treatment to its own specialized services (e.g. Google Shopping, YouTube, Google Maps, etc.) in its general web search by displaying its services higher and with greater visibility in the search results despite not always being the more pertinent for consumers and citizens. Thereby, its own services are promoted at the expense of its competitors. In fact, less than five per cent of internet users click beyond page 1 to pages 2, 3 or further in a Google search result.[1]

New data proves the existence of direct consumer harm. This has been confirmed by BEUC becoming an official complainant in this case. Moreover, market tests such as the Focus on the User solution illustrate that it outperforms the current anti-competitive Google practices in an A/B test with thousands of respondents. This is significant because it goes beyond describing consumer harm as a “reduction of choice in the marketplace as competitors are pushed out”, but identifies how consumers either are not finding what they are long for or are being led to believe the best answers are offered by Google. [2]

2.Google requires mobile phone producers to preferably use the installation of its own services, such as Google Search, on mobile devices using the market-dominating operating system Android.

3.Google is not only a market leading search engine, but also holds a dominant position in browsers (e.g. Chrome). It interconnects all main businesses of operating systems, browsers and search engines and makes them thereby interdependent. In the case of Microsoft, the linkage of merely two services, i.e. Windows and Internet Explorer, was already enough to consider it an infringement of EU competition rules. A reaction to this is therefore urgently needed.

4.Google is one of a number of multinational companies (see the recent cases denounced by the EC of Apple in Ireland or Fiat in Luxembourg) that profit from paying fewer taxes than other EU companies thanks to alleged illegal State aid.

 

 

b. Facts on the proceedings

 

-The antitrust investigations against Google were launched in November 2010. The facts of an alleged abuse of a dominant position seem clear now after an informal and formal market test and the inquiry of the claimants in May 2014. Throughout the five-year investigations, none of the three sets of commitment proposals made by Google has succeeded to address the main concern, i.e. the anti-competitive preferential treatment of its own services.

 

-The last set of commitment proposals was rejected by former Competition Commissioner Joaquín Almunia on 9 September 2014. It is surprising that the Commission grants for the fourth time the chance to come up with another commitment proposal. Normally, a competition procedure would foresee now a statement of objections as a next step towards a clear prohibition of anti-competitive conduct.

 

-In fact, the proposed 3 rival links solution does not solve the problem of the divergence of traffic, nor the issue of the most pertinent links for consumers being put at the top of the search result.

 

II. Possible next steps within the antitrust procedure

 

1. Settlement:

 

A first possibility would still be to try to settle, which is the most preferred option for the Commission at this stage, as it speeds up the procedure for adoption of a cartel decision. Thereby, unilateral commitments by Google will be accepted by the European Commission. This is a particularly useful antitrust tool for rapidly changing digital markets. However to have any chance of being effective and future proof, the settlement would have to be principle-based, a clear non-discrimination principle supported by a majority of complainants. Google can completely change the design of the website overnight, thereby making any settlement, which stipulates the details of the page, obsolete.

The problem is that the room for manoeuvre for the Commission is rather limited, as it will be dependent on the concessions made by Google. Moreover, such a settlement will comprise certain shortcomings. First, it will fail to comprise a fine for Google. Second, there will be no formal establishment of a violation of EU competition law. In light of this, a commitment decision may only be adopted if the proposed commitments completely satisfy the identified competition concerns.

 

Nils Wahl, Advocate General of the European Court of Justice, recently criticized the European Commission for using the settlement procedure too often: “A much-too-frequent use of commitment or settlement decisions might lead to the downplaying of the role of the Court of Justice, and thus only focus on the policymaker”.

 

2. Statement of objections:

 

The statement of objections will be a logical consequence when no other milder measures for the ending of the anti-competitive behavior are available. It would lead to the traditional anti-trust proceedings, including a prohibition decision covering all areas of Google’s anti-competitive behavior, and end with the issuing of official charges against Google. As an option to put an end to Google’s practices, the unbundling of its main services might be considered by the Commission.

By embarking on the traditional path of statement of objections, the risk of a possible long battle before the courts might however arise.

 

 

III. A possible solution: a ‘rotation mechanism’ for the general web search

 

Google’s anti-competitive practice of giving preferential treatment to its own specialized services in its web search, thereby causing a traffic diversion away from rival verticals, is first and foremost challenged by the European Commission. A bidding procedure for the ranking positions of its competitors in the search results, as proposed solution by Google, faced large criticism; particularly the German and French Ministers expressed their opposition in their common letter of 16 May 2014.

 

A possible remedy to this practice could be the set-up of a rotation mechanism pursuant to which Google’s and competing verticals would be displayed in the same location and with the same prominence on the search results page. While Google would be entitled to keep the current design, it would have to ensure that all relevant verticals would be able to compete. Google’s verticals and rival verticals meeting certain minimum performance thresholds would be able to participate in the rotating group of verticals shown on Google’s search result page. The mechanism would hinder Google from applying the ranking algorithms that it currently uses. Thereby, it would be guaranteed that users receive relevant results while benefiting from greater choice.

 

Conceptually, this remedy is similar to the Browser Choice Screen which Microsoft delivers to users of Windows who have Internet Explorer set as their default browser (pursuant to the Microsoft Commitments of 2009). The Browser Choice Screen gives consumers in the EU the opportunity to choose from a variety of browsers to access the Internet. The five highest ranked browsers are directly visible on the screen and the remaining browsers need to be scrolled to — all being displayed in a random order. The browsers are displayed in a fair and unbiased way, using the same format, size of the icon and appearance of the text. The list of the browsers is updated every six months. Remarkably, the participation in the Browser Choice Screen is completely based on a neutral mechanism, not involving any auction or other payment to Microsoft.

 

A rotation mechanism as possible remedy to Google’s anti-competitive traffic diversion practice could be designed on the basis of the same principles. Moreover in recent years, the shift of users from normal large fixed computer screen to mobile devices with smaller screen has been considerable. This is an important and fast moving change that makes it increasingly necessary to set up a clear visible rotation mechanism system where rival links are clearly visible on mobile devices screens.

 

In order to provide for a successful mechanism based on the principle of non-discrimination, the concerns of search bias and the “Focus on the User” principle should be directly discussed. Accordingly, non-fact-based answers should be filled with results from the organic algorithm instead of Google+. This would underscore that a future-proof solution, which ensures that Google is free to innovate on the user interface, is very easily accessible.

 

 

IV. Legislative options for the development of the digital market: regulation of search engines

 

-In case the proceedings against Google carry on without any satisfying decisions and the current anti-competitive behavior continues to exist, a regulation of the dominant online web search should be envisaged. This should be done by particularly taking into account the dynamic development of the digital market.

Taking the existing example of the regulation of Computerized Reservation Systems (CRS) where the EC adopted legal measures of supplementary nature to the existing competition rules, the EU could proceed in the same way in the case of Google.

CRS is a similar case of preferential treatment in the context of air transport services. One of the major CRS providers, Amadeus, was being used by a few airlines in a way that profited them from preferential treatment in the operations of the CRS. As these CRSs were mainly owned and controlled by the airlines themselves, there were many risks for anti-competitive behavior of the airlines for which the existing competition rules were insufficient. Airlines could, for instance, use their position of ownership to exclude their competitors. This could be achieved by either hindering the display of flight information of competitors, who used the same CRSs, or even by placing their competitors in a less favorable way on the screens shown to travel agents —a similar situation of preferential treatment as in the Google case.

As a consequence, the then EC introduced an obligatory code of conduct based on the principle of non-discrimination for all CRSs through Regulation No. 2299/89, which has been replaced by Regulation 80/2009 in 2009 due to technological and market developments. Safeguards to prevent abusive behavior and obligations for the CRSs were introduced to hinder the benefitting from preferential treatment. The CRS regulation proved to be successful in preventing abuses of market power. In light of the adoption of such a legal instrument to deal with the issue of anti-competitive behavior, the question arises whether such an approach should not also be envisaged in the context of Google.

The only issue with adopting legal measures in a similar way as in the case of the CRS Regulation is that the latter has been adopted on Article 84(2) EEC, i.e. a legal basis in the transport policy field. Logically when drawing this parallel to the CRS Regulation, this legal basis could not be taken for a regulation in the Google context. Rather Article 114 TFEU should constitute the legal basis. As the reasoning behind both articles is identical, i.e. the harmonization of a certain policy area, one would not be prevented from using Article 114 TFEU for such purpose.

 

-A new regulation should particularly include the promotion of an increased chance of market entry for SMEs. Moreover, it should take aspects on consumer protection, data protection and copy rights into account.

 

-In the context of the Network and Information Security (NIS) Directive, we have already urged the Commission to find a coherent approach on how to classify Google as a service. While DG Connect considers it to be a critical service (i.e. the security of the European Union is dependent on a better protection of these services against cyber-attacks), DG Comp has problems to classify Google. A coherent approach by the European Commission on this classification is urgently needed now as we are currently dealing with Google in antitrust proceedings and in the context of the NIS Directive.

 

-It is essential that competition within the EU is not obstructed by multinational internet companies that possess a dominant position. Therefore, the EU is in clear need to take stronger measures against such abuses in the fast moving and dynamic digital market both on the national and European level.

 

[1] http://searchenginewatch.com/article/2049695/Top-Google-Result-Gets-36.4...

[2] http://focusontheuser.eu