Anti-Competitive Lawsuits Hit Google, Others

EU Competition Commissioner Margarethe Vestager has filed anticompetitive charges against Google and other big players. This Iron Lady of Denmark is showing how she deserves this title as she goes after these powerful corporations. Among the complaints are malpractice, georestriction policies, and unfair licensing agreements. She invites these companies to argue their sides as she has at the same time boldly stepped out to call them on their practices. Her points seem valid and this has earned her more than a few enemies in the corporate world.

Google is Abusive

Vestager had a formal complaint filed against Google for malpractice. Charges filed so far have to do with the company’s shopping comparison service. A Statement of Objections was sent to Google in April of this year, explaining the EU’s position regarding Google’s apparent abuse of its dominant position in the European Economic Area (EEA). Google is accused of promoting its own service as a rule without regard for other, possibly better ones. As a search engine, Google should present the best results based on relevance and not favor its own products. This unfairly sweeps legitimate rival services aside and thus harms healthy and natural competition. Google has yet to respond to the charges, and has asked for an extension until August 17 to review them. If found guilty of this anticompetitive behavior, the company could be made to pay 6.6 billion US dollars in fines. The company is also expected to be served with charges on several additional offenses. Vestager says that she respects Google, but must challenge these policies and behaviors that offend EU antitrust rules.

Georestriction Creates Monopolies

Sky UK was targeted for investigation in the complaint filed for georestriction practices. Vestager says that blocking services from being enjoyed in certain areas simply because they are different physical locations allows a company to create a monopoly on certain content. To her, this is anticompetitive. NBCUniversal, Disney, Sony, Paramount Pictures, Warner Bros and Twentieth Century Fox also received a Statement of Objections from the European Commission regarding these charges. These companies are known for their licensing terms that force a lock-in to their services for the enjoyment of certain audio-visual products. This practice has been explained as copyright protection, but the EU sees it as harmful.

Gazprom Prices Unjustly

The battle to enforce EU competition laws is not limited to the digital sphere. Vestager and her team have also pointed fingers at the global energy company Gazprom. They have found that the company has been imposing unfair gas price hikes in some countries. There is a process for computing and regulating gas prices that preserves the market and serves consumers, and Vestager claims that the company is ignoring it. It must be noted here that Gazprom holds a 72% share in Russia’s natural gas reserves and only a 17% share on global reserves. The company is also responsible for 72% of Russian gas output. The complaint then has an obvious negative impact on the Russian economy, and has Russia shouting foul. Some believe that Vestager is targeting them for political reasons since the EU and the US have so recently imposed a third round of sanctions on business transactions with energy companies, among others. Vestager dismisses it all as a matter of coincidental timing. She clearly stated that there is no malice or prejudice involved in the issuance of the statements or the filing of complaints. Earlier on, she was also accused of being anti-American because of the charges filed against the above-mentioned US companies. But she gave the same response then, explaining that she is only doing her duty by upholding the EU’s legislation.

Next Steps

The companies who have received notice of the charges filed against them have been given time to review and respond. Then, once they have recognized the charges, court proceedings will begin to examine the positions of both sides. In addition, other complaints have yet to be formally filed against these and other companies such as Apple, General Electric and Mastercard. Vestager is confident that she is pursuing justice and paving the way for more healthy competition in the EU. We agree that someone has to stand up against the abuses that she seeks to expose, in the interest of fair market competition. Companies that strive to make their mark in the global arena have the benefit of a very wide market. But they cannot expect to reap the rewards of serving such a vast clientele yet spurn laws beyond their natural borders.

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