Leonid Bershidsky writes: Google has lost patience with its soft approach to the European Union’s bureaucracy in Brussels, showing a new fighting spirit in its answer to antitrust charges against the company. This is a path that led Microsoft nowhere and cost it more than a billion dollars in fines.
The company’s general counsel, Kent Walker defends the way Google prominently displays results from its own shopping comparison service, but not from its competitors — a practice at the heart of the European Commission’s case:
Walker also reveals that Google hired Bo Vesterdorf, the former president of the General Court, part of the EU’s judicial branch, to write a separate response. This argues that Google has no duty to supply its own rivals, as if it controlled an input that was both essential and not available anywhere else. That just isn’t the case on the Internet, Vesterdorf said.
Before reaching this stage, Google had tried a more pliant approach, seeking to satisfy the antitrust commissioner and avoid the large fine that would come with an adverse ruling.
Last year, Google doubled its EU lobbying budget to 3.5 million euros ($3.9 million). That isn’t much less than Deutsche Bank or ExxonMobil is spending. According to data on the same site, Google has held more meetings with EU officials than any other company since last November — 32 in all.
In the comparison shopping case, though, Google’s competitors and the European Commission remained unhappy. So the company stopped smiling and nodding and decided to get tough: It’s no longer proposing any compromises, just boldly stating that the way it displays offers from various online merchants is within the law and good for users. .
Older tech companies know it’s useless to tell the EU — and, inevitably for such a strategy, European courts — that they don’t understand what they’re doing. The bureaucrats and judges may be unable to produce another Google, but they are good at listening to experts and far from dumb. And they often hate what they see as American arrogance.
Microsoft can tell Google exactly what happens next; indeed, Google’s lawyers realize there will be other antitrust investigations. One, concerning the Android operating system and its links to Google services, is already in the works, although no official charges have been brought. Another may soon hit Google where it really hurts, challenging its dominance in online advertising. Google will fight and probably lose, because Europe doesn’t like big U.S. companies to dominate its markets.
Lobbying and complying with whatever demands still can’t be avoided is a less painful path. Microsoft spent 4.5 million euros last year, a million more than Google, on efforts to get EU officials to see its points on issues such as data protection and cloud computing.
It’s admirable that Google now wants to fight for its principles and against the dilution of its superior offering. It makes me cringe, however, to think of the time and money that will be burned in this hopeless battle.
