BUTNOTHING DAY, another antitrust case against large technologies. Only in May, the DC attorney general filed a complaint against Amazon, Germany’s antitrust authority went to Amazon and Google to determine if they were “of prime importance to competing in different markets,” and his Italian counterpart hit Google with € 100 million. ($ 122 million) Fine for restricting access to Android Auto, the company’s version of its mobile operating system for cars.
And the pace may be picking up steam. 4 June UK Competition and Markets Authority (CMA) and the European Commission, European UnionThe company’s management launched parallel studies to find out if Facebook is using the data it collects to gain an improper advantage in online advertising. On the same day, German trust advocates opened another case about whether Google endorsed its new “News Showcase,” a carefully curated collection of newspaper articles, in search results. And on June 7, the French competition watchdog agency announced it had reached an agreement with Google over claims that the company was abusing its dominant market position to place online ads. Google will pay a € 220 million fine and amend some business practices.
In part, regulators are responding to political winds. “They can’t do anything wrong by following big technology,” jokes Justus Haukap of the University of Düsseldorf. There was a similar flood of technology cases in America last year, with the Justice Department suing Alphabet (Google’s parent company) and the FTC pursuing Facebook in conjunction with state attorneys general. But another dynamic at work suggests that such cases will become even more common.
First, antitrust authorities are increasingly competing with each other. “First in America, and now in Europe, everyone wants to leave their mark on technology regulation,” notes Thomas Vigne of the law firm Clifford Chance. IN CMAA new division for digital markets needs to make a name for itself. Andreas Mundt, head CMAGerman counterpart, wants to make his agency a pioneer in the field of antitrust law. The new internal affairs are also an attempt to escort the seizure of power by the European Commission, which European UnionThe Digital Markets Bill will leave responsibility for competition policy.
According to Christina Caffarra of consulting firm Charles River Associates, all of this muscle also points to a “big turn” in competition policy, from ex post antitrust lawsuits filed ex post to ex ante rules restricting digital firms upfront. Germany’s new competition law, which came into force in January, was the first to formalize this approach in law; German cases against Amazon, Google and Facebook are exploiting this. IN CMARussia’s digital arm is expected to follow the same path if the UK parliament approves the necessary legislation. If a European UnionDigital Markets Law becomes law, large technologies will have to comply with a long list of preliminary rules.
All of this could cause trust-breakers, especially in Europe, to rely less on a few large investigations and more on many smaller ones – in other words, akin to regulation in more fragile industries. Regulators will act quickly if they think tech giants have done (or are about to do) something wrong. It is hoped that firms might think twice before expanding their digital dominance by merging an old product with, say, a new one, or using data collected elsewhere in favor of their own services.
Don’t hold your breath. In the French case, Google agreed to make life easier for rivals, for example by improving access to data. But this is unlikely to diminish its dominance in advertising technology. Investors in high-tech stocks were oblivious to antitrust measures. The likely outcome – the constant switching between firms and regulators – is acceptable to all.
To understand why, consider the older European Union case against Google. Three years ago, the European Commission fined the firm 4.3 billion euros and forced it to separate its search service from its Android mobile operating system. Buyers of new smartphones were presented with a “selection screen” of alternative search services, which offered to place them in a prominent place. The winners did not attract many users, most of whom were still addicted to Google. On June 8, the commission said the selection screen would instead rank search engines by their market share – hardly a revolution in antitrust law. ■
This article appeared in the Business section of the print edition under the heading New Traffic Rules.