Google anti-trust foes see friend in new E.U. antitrust head

April 10, 2015, 8:55 AM UTC
European competition commissioner Margrethe Vestager gives a press conference at European Commission headquarters in Brussels on November 20, 2014. AFP PHOTO/Emmanuel Dunand (Photo credit should read EMMANUEL DUNAND/AFP/Getty Images)
Emmanuel Dunand — AFP/Getty Images

After waiting more than four years for Brussels to resolve his anti-trust complaint against Google Inc. (GOOG) while traffic to his website plunged by 80% percent, Michael Weber of German online mapping service held out little hope of success. Until now.

He says a meeting with the new antitrust chief of the European Commission has left him with newfound hope that Brussels will take action at last to curb behaviour by the U.S. Internet giant, which he blames for hurting his business.

Danish politician Margrethe Vestager, who took over the EU competition portfolio in November, inherited an anti-trust complaint by more than a dozen companies against Google, left unresolved by her Spanish predecessor Joaquin Almunia.

Almunia launched an investigation in 2010 and initially concluded that Google may have hurt competitors by favouring its own products and services in search results and blocking advertisers from moving their campaigns to rival platforms.

Since then, Google has offered three settlement proposals to resolve the case. Most recently, just over a year ago, it offered to give competing products and services bigger visibility on its website, let content providers decide what material it can use for its own services and make it easier for advertisers to move their campaigns to rivals.

Almunia initially accepted that deal, only to reverse his decision six months later and demand more concessions, leaving the ultimate decision to his successor.

So far, Vestager has said nothing in public that would explicitly signal what course she is considering.

She has also indicated that she will not rush into a decision. Asked whether enforcement regulators should emphasise quick action in cases involving fast-moving technologies, Vestager told Reuters: “I don’t think that speed should be the priority. We should be even handed and open minded in interpretation of the facts. Of course it is better to be fast than slow but it’s even better to be just.”

Nevertheless, executives from some of the companies that brought the complaint against Google say they are more optimistic now than they have been for years, and that they believe action is finally coming soon.

“With Almunia, there was no real dialogue. With Vestager, it is different. The questions she asked us show that she understands the complainants’ problems,” said Weber.

Another of the complainants, who spoke on condition of anonymity because a meeting with Vestager was confidential, said: “The first thing she said at the meeting was that she understands the harm we have suffered.”

The European Commission declined to comment on the case.

Google also would not comment. Spokesman Al Verney said he would not discuss anti-trust issues.

The stakes are high for Google which faces a fine of as much as $6.6 billion if found guilty of anti-competitive behaviour. Even more disruptive, it may have to modify its business practices.

Google’s dominant positions in markets like online search, advertising and smartphone operating systems have drawn regulatory scrutiny in various jurisdictions around the globe.

Its longstanding position is that competition is “just a click away”–a phrase meant to indicate that users have easy access to use rival services–and that its products are popular because people find them useful.

Vestager, 46, was a free-trading economy minister in Denmark who jolted Danes with deep cuts to the social welfare system, earning a reputation as a firm negotiator before coming to Brussels.

She has spoken in general terms of the need to keep fast-changing industries open and contestable and said both large and small players should be able to compete on the merits of their products, comments that some of the Google complainants have interpreted as sympathetic towards their case.

They also note that she met some of the complainants before seeing Google’s executive chairman Eric Schmidt and general counsel Kent Walker last month.

In one sign of movement in recent weeks, the European Commission has asked some of the Google opponents to allow regulators to declassify some of the confidential data they submitted to justify their accusations, a step that would be necessary to present the data to Google for its response.

Wilko van Weert, a partner at law firm McDermott Will & Emery and specialist in the field, said Vestager could push for a settlement that would require Google to provide more information about its search ranking formula.

“Coming from a Scandinavian culture where transparency is very important, I would not be surprised if she pushes for maximum transparency in the way Google organises and manages its search results,” he said.

Any ruling by Vestager might have to be able to survive a potential court challenge from Google, which could be tougher to withstand because of Almunia’s previous reversals.

Vestager may initially want to play hard ball, but that does not mean she will close the door to a settlement, said Mario Mareniello, a former economist at the Commission’s competition unit and now an expert at think tank Breugel.

“If at a certain point in the process effective remedies addressing her objections would be offered by Google, I guess it would be hard for her to say no,” he said.