Tuesday, April 14, 2015

Europe Competition Commission Decides to File Antitrust Charges Against Google

Europe’s competition commission has decided to file formal charges against Google for violating the European Union’s antitrust laws, the result of a five-year investigation that many will see as analogous to the similar lawsuit faced by Microsoft almost a decade ago.

It is hard to say what will happen next, but Microsoft spent 21 years fighting antitrust regulators, and was seen by many as a turning point for Microsoft. That might someday be said about the EU case against Google as well.

Were Google to lose, the possibly $6 billion fine might be the least of the firm’s problems. The bigger issue would be the decisive break from past operating policies and growth strategies.

The EU has been investigating Google's market dominance for the last five years, and it seems unlikely Google will escape all damage, even if a consent decree “merely” restricts its business freedom.

In the past, such antitrust actions have had serious implications. The former Bell System monopoly in the United States was ended by just such a consent decree, splitting what became AT&T from seven local telephone companies and ending the AT&T telecom monopoly.

One can suggest we are a long ways from a resolution of the case against Google. But it wouldn’t be hard to guess that a “chilling effect” already has occurred, causing Google to move more slowly than it otherwise might have.

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