SHOULD GOOGLE'S SECRET SAUCE BE ORGANIC?

• Published in: Melbourne journal of international law 2015-12, Vol.16 (2), p.1
• Main Author: Wagner-Von Papp, Florian
• Format: Article
• Language: English
• Subjects: Advertising campaigns; Antitrust; Competition policy; Jurisdiction; Search engines; Shopping; Vice Presidents
• ISSN: 1444-8602; 1444-8610

This commentary discusses the European antitrust investigation into Google and the international implications of the case. It focuses on Google's alleged dominance and the allegations concerning Google's self-preferencing of its Google Shopping results on general web search result pages, which form the subject matter of the Statement of Objections that the European Commission ('Commission') sent on 15 April 2015. As a threshold matter, the Commission's international jurisdiction to prescribe is found to be unproblematic. However, the tendency towards over-enforcement resulting from the cumulation of national and supranational investigations by competition authorities worldwide counsels caution in borderline cases. And, as the assessment of the merits of the case shows, Google is indeed a borderline case. While it seems possible to construct a story of dominance and consumer harm, this paper doubts Google's ability to act to an appreciable extent independently of its competitors and customers. Ultimately, this is an empirical question and the Commission may have sufficient evidence at its disposal. However, the publicly available evidence does not seem to support a finding of dominance, despite Google's high share of user searches. With regard to a finding of abuse, classifying Google's self-preferential treatment as an abuse would require changing the goalposts: one would have to accept that instead of a constructive refusal to deal, it is already abusive if services are not provided to third parties on identical conditions, or that instead of requiring coercion of consumers to acquire a tied product or service, it is already abusive if consumers are merely nudged to preferring the vertically integrated firm's products. These changes would amount to a paradigm change. Traditionally, competition is meant to force producers to be responsive to consumer preferences. Consumer choices are taken to reveal their preferences unless coercion can be shown. Allowing intervention already below the threshold of coercion, when consumers are merely nudged to make particular choices, risks substituting the competition authority's assessment for consumer preferences.