Posted on 22/Apr/2015
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What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions against US-based companies will not enhance its ability to innovate and compete — they will only make it more reliant on the whims of bureaucrats.

Last week, as Commissioner Vestager stood at the podium to announce that the EU Commission was finally issuing a Statement of Objections regarding Google’s search practices, long-time commentators of EU competition-policy matters thought back to the infamous Microsoft wars of the early 2000s—not just because it made them feel some ten years younger.

The two cases at hand bear striking similarities: both targeted the most visible company in the computer industry at the time; both were preceded by analogous proceedings in the United States, but ended up following a different path; both focused on extremely sizable market shares, but failed to take into account changes already occurring in the marketplace; and both arguably marked exemplary instances of a politically-oriented approach to the allegedly technical field of competition law.

Indeed, the current Google case seems to rest on shaky foundations—if anything, an investigation that lagged for five years and survived three settlement attempts should be proof of that. According to the Statement, Google favoured its own comparison shopping service at the expense of competing “vertical” services. However, it’s now hard to tell horizontal from vertical search, as they become increasingly intertwined. Long gone is the era when search engines worked as the internet’s yellow pages—and luckily so.

Yesterday, Google’s job was to tell users where they could find answers to their questions; today, Google is in the business of providing them: it looks only natural that those should be Google’s own answers.

But since the Commission launched its investigation, search evolved in another important respect: mobile ate up desktop computer time, apps displaced the browser, the social web did the rest. To be clear, traditional search engines are far from marginal, but they no longer are the primary tools for gathering information, particularly in specialized niches. This applies to Google, as well. For years it’s been said that competition was just a click away: users are now beginning to click away, only in a different direction than expected.

Irrespective of its merits, the case gained momentum over the last few months. In November, the EU Parliament resolution called for the unbundling of search engines. Just days before last week’s Statement of Objections, digital commissioner Oettinger said Europe’s online businesses were “dependent on a few non-EU players world-wide” and urged to “replace today’s Web search engines, operating systems and social networks”.

Europe’s digital shortcomings are a reality, but going after US-based tech companies won’t help overcome them.

In fact, the only industry that stands to benefit from a new season of muscular antitrust enforcement is the lobbying industry. What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions will not enhance its ability to innovate and compete—they will only make it more reliant on the whims of bureaucrats.

 

photo credits: vango