Google and its Anti-Trust Woes (An Update on the EC Investigation)

Joaquín Almunia, Vice President of the European Commission responsible for Competition Policy on 21st May released a statement on the Google investigation. (Agree this is a rather late update. Unfortunately, missed it due to examinations).

In it, he has highlighted four concerns against Google which are as follows

First, in its general search results on the web, Google displays links to its own vertical search services. Also, Google displays links to its own vertical search services differently than it does for links to competitors.The Concerns of the EC are that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.

Second, concerns related to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors.

Third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements.

The fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors.  The concern is that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.

On a related note, notice that the statement is conciliatory in nature, which Joaquín Almunia himself stating, and to quote

“I offer Google the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points.”

This is not a new phenomenon in competition investigations and it it is one which the CCI itself should begin to adopt. It saves time and prevents unnecessary and lengthy litigation. The logic in this case (though it may differ on the circumstances of each case) is that despite their their potential anti-competitiveness, it must be universally accepted that Google products are in general extremely beneficial to its users, and thus any changes forced upon Google, while they may or may not ensure a competitive marlet, shall in all probability harm consumer welfare till a certain extent. (This is one of the issues underlined by  Robert Bork in his competition law classic The Antitrust Paradox: A Policy at War with Itself. A must read for all those with a special focus of interest in competition law.)

The Domination of Sport

Two of the complaints presently before the Commission are those filed against Hockey India by several Hockey Olympians as well as a group of chess players who have separately approached the Competition Commission of India (CCI) over the abuse of dominant positions by the respective authorities overlooking their sports in India.

Hockey India, which holds the sole mandate to govern and conduct all activities for hockey in India warned players that if they participated in the World Series Hockey (WSH) proposed by the Indian Hockey Federation, they would lose their position in the national team.

Interestingly, there is little to go by precedent on this specific issue, i.e., whether a sports regulatory body abuses its dominant position by imposing certain restrictive conditions upon the players affiliated to it, and therefore the Commission could end up conducting some pioneering research and analysis in this field. while there have been cases on the legality of exclusivity arrangements in the sports sectors regarding sports equipment and sportswear ( See American needle v. NFL), the closest dispute to the present issue arose in the EU in the withdrawn preliminary reference in the Oulmers Case,  which involved issues relating to the right of clubs to be compensated by national federations for the release of their players for international games and tournaments. It was initiated by a complaint lodged by ASOBAL (the Spanish Handball League) before the European Commission in March 2009. The complainant argued that by precluding the payment of a compensation to clubs the regulations governing the release of players restricted competition were contrary to both articles 101 and 102 TFEU. The European Commission took an interest in the case and started a preliminary investigation which was only put to an end pursuant to an agreement between ASOBAL and the European Handball Federation.

It will be interesting to see how the Commission handles this complaint.