ICOMP submits views on the remedies proposed by Google to the European Commission

On 31 May 2013, ICOMP submitted its comments to the European Commission in response to the Market Test of the remedies proposed by Google in the Commission’s anti-trust case.  The Market Test is intended to help the Commission assess whether the proposed remedies are effective in putting an end to the anti-competitive conduct which the Commission believes that Google has been engaging in.

In the Commission’s own words:

i.          “Google prominently displays links to its own specialised search services within its web search results and does not inform users of this favourable treatment […] while competitors’ results that are potentially more relevant are less visible and even sometimes not directly visible to users.”

ii.          “[…] [d]ue to the favourable treatment of Google’s own services, consumers are more likely to not make use of potentially more relevant competing services. […]  The Commission is concerned that this practice unduly diverts traffic away from Google’s competitors in specialised search towards Google’s own specialised search services.  It therefore reduces the ability of consumers to find a potentially more relevant choice of specialised search services.  Since Google is an important source of traffic for competing specialised search services, this may reduce competitors’ incentives to innovate in specialised search”.

The Commission has also noted Google’s enduring market shares “well above 90% in most European countries for a number of years” and that the markets for search and search advertising are characterised by “significant barriers to entry and network effects”.  The Commission has expressed its concern that Google’s conduct resulted in “harm to competition with negative effects on consumers, in particular in terms of reduced choice and less innovation.”

Under the EU competition rules companies with very high market shares, such as Google, have a special responsibility not to allow their behaviour to impair genuine, undistorted competition.  This includes not discriminating between its customers or, where the company in questions operates a platform or other facility, providing access to that platform or facility to third parties on less favourable terms to those which it grants itself.

In this case, the Commission has been looking at whether the favourable treatment Google affords its own services in search rankings unlawfully discriminates against its competitors in areas such as price comparison, travel, maps, news etc.

The ICOMP submission contains a detailed legal analysis of Google’s discriminatory practices as well as the standards that any proposed remedies would have to meet in order to be acceptable.  It gives reasons why the remedies proposed would need to end Google’s discriminatory practices and restore effective competition to the critical online markets of search and search advertising.

ICOMP concludes that the proposed remedies do little or nothing to achieve these objectives and that in many ways they could make things worse.  The defects of the proposed remedies are described in detail, and ICOMP has taken the position that they cannot be improved to a point at which it could be said with the necessary degree of certainty that they would be likely to be effective.

The restoration of effective competition is absolutely key to ensuring that consumers are offered a wide choice of online services and that European technology and content companies are incentivised to invest and innovate, to help create growth and jobs.

ICOMP also made a number of other points including that Google’s test results and explanations of the proposed remedies should be made available to third parties, as should the Commission’s preliminary assessment of Google’s behaviour.  ICOMP has also argued that it believes that voluntary remedies are not the most appropriate procedure in this case and that the Commission should proceed with a full in-depth investigation.

ICOMP looks forward to continued cooperation with the Commission on this complex case, the outcome of which is so important to consumers and the wider economy in Europe.