EU's Google Shopping decision taught lessons and influenced behavior, says company lawyer

8 October 2019 9:39am

3 October 2019, by Michael Acton

Google’s EU antitrust decision in 2017 for abusing its search-engine dominance in online shopping did push the company to change its behavior and strategic choices, a senior lawyer for the company has said.

While the tech giant still intends to overturn the decision at the EU courts, it still “teaches us lessons about how we should be behaving in this space,” Oliver Bethell said.

Bethell was speaking on a panel* in Brussels about "ex-ante" and "ex-post" competition enforcement — simply put, the choice between setting out a specific regulatory framework for the Big Tech companies or allowing antitrust decisions and case law to determine the limits on their behaviour over time.

The EU consumer organization umbrella group BEUC released a report calling for tougher regulation of the biggest platforms, to allow antitrust enforcement to keep pace with changes in the digital space.

In its 2017 Google Shopping decision, the European Commission fined the company 2.4 billion euros ($2.6 billion) and ordered it to apply the same "processes and methods" to place and display rival comparison shopping services in its search results as it gave to its own service.

The long-term impact of such cases, even if limited to a specific business area, shouldn't be underestimated, Bethell said. “I think it’s important when thinking about this sort of dichotomy between ex-ante and ex-post, to think about the precedential value of some of these big cases,” he said.

“When you look at cases like Google Shopping, for example, which is on its face a very narrow case, I take that, and it is a case that took a long time, that’s true — but the implications of the case for us as an in-house team are broader.”

The decision, he said, “does affect the conduct and the decision-making of the firm moving forward … Google asks itself: 'What’s the evidence that will be important to regulators? What are the kind of things that we should be looking at when we are making launch decisions?'," he said.

After the Shopping decision, the EU regulator turned its sights on other areas of the company’s business, including its Google for Jobs service which it started to roll out in Europe in 2018. The commission is looking at whether Google is favoring its own jobs service over competitors in search results.

EU competition chief Margrethe Vestager, who is set to take on an additional role overseeing digital policy in the next commission, due to take office next month, has said new rules for platforms may be necessary to add to the precedents set by specific antitrust decisions.

But while acknowledging that ex-post enforcement did leave “gaps” around what behavior is considered anti-competitive, Bethell said its importance should not be underestimated.

“Let’s not think that [in] these cases, there’s a fine, there’s a remedy and then it goes away. That’s not my experience of this,” he said.

“You look at a theory such as favoring. We have a very good idea of what that means in shopping, we’ve thought that out, we’ve talked to regulators about it a lot, we’re very clear about the understanding of the conceptual framework, the evidence that will be brought into that discussion. So too in other areas of vertical search.”

“But as you sort of move outside, if you move to concentric circles beyond that, it does become a little less clear."

Efficient feedback mechanisms for companies on the impact of future regulations would be important, Bethell added. “When we are thinking about places where ‘ex-ante’ regulation might plug a gap — how are we going to hold ourselves to account?” he asked.

“What are the questions [regulators] are going to ask us, as an industry, to determine whether or not the measures are working? What kinds of tests will you be running? Will we have a feedback loop that will allow us to admit that perhaps this measure hasn’t worked?”

* "Protecting Consumers' Freedom in the Digital Era," BEUC, Brussels, Oct. 2, 2019.