Europe Steps Up to the Challenge of Digital Competition Law

Two years ago U.S. authorities abandoned a critical case in digital antitrust. The EC now appears ready to fill the void:

The European Commission is said to be planning to charge Google with using its dominant position in online search to favor the company’s own services over others, in what would be one of the biggest antitrust cases here since regulators went after Microsoft. . . . If Europe is successful in making its case, the American tech giant could face a huge fine and be forced to alter its business practices to give smaller competitors like Yelp greater prominence in its search queries.

I applaud this move. As I’ve argued in The Black Box Society, antitrust law flirts with irrelevance if it fails to grapple with the dominance of massive digital firms. Europe has no legal or moral obligation to allow global multinationals to control critical information sources. Someone needs to be able to “look under the hood” and understand what is going on when competitors of Google’s many acquired firms plunge in general Google search results.

Google argues that its vast database of information and queries reveals user intentions and thus makes its search services demonstrably better than those of its rivals. But in doing so, it neutralizes the magic charm it has used for years to fend off regulators. “Competition is one click away,” chant the Silicon Valley antitrust lawyers when someone calls out a behemoth firm for unfair or misleading business practices. It’s not so. Alternatives are demonstrably worse, and likely to remain so as long as the dominant firms’ self-reinforcing data advantage grows. If EU authorities address that dynamic, they’ll be doing the entire world a service.

PS: For those interested in further reading about competition online:

Bracha & Pasquale, Federal Search Commission?

Hazan, Stop Being Evil: A Proposal for Unbiased Google Search

Newman, Search, Antitrust and the Economics of the Control of User Data.

Newman, The Costs of Lost Privacy: Consumer Harm and Rising Economic Inequality in the Age of Google

Pasquale, Paradoxes of Digital Antitrust.

Pasquale, Privacy, Antitrust, and Power

Pasquale, Beyond Innovation and Competition: The Need for Qualified Transparency in Internet Intermediaries

Pasquale, Internet Nondiscrimination Principles: Commercial Ethics for Carriers and Search Engines

Patterson, Manipulation of Product Ratings: Credit-Rating Agencies, Google, and Antitrust

Zingales, New Challenge for Competition Policy and Data Protection: Exerting Regulatory Scrutiny Over Search Engines

And, for a bit of historical perspective, today’s Google Doodle:

Octopus

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