There’s something surreal about the European Union lawsuit against Google, the details of which were released last week.
Google is accused of distorting web results to favor its shopping service. This case will move fast. While the EU’s investigation took five years, Google has only 10 weeks to respond. The search giant has already rejected the charges, and in all likelihood, the matter will go to an open hearing where both sides will present their case.
Were the EU politicians overseeing the investigation to present their case honestly, they might admit that the investigation is a fine way of distracting the public from Europe’s real problem: slow growth and high unemployment. The EU’s 2015 financial forecast, released in February, states it plainly: “Growth this year is forecast to rise to 1.7% for the EU as a whole and to 1.3% for the euro area.” This while France’s unemployment rate is projected at 10.4 percent, Spain’s at 22.5 percent, and Italy’s at 12.8 percent.
Tech is particularly soft. In March, tech stocks contracted sharply in Europe, on fears of overvalued companies and uncertain growth. This isn’t a new problem. Take venture capital dollars, for instance. VC funding in Europe has lagged its American counterpart for two decades, both in total dollars invested and total returns to investors. The funds are so hard to come by that public money accounts for nearly 40 percent of total funds in European VCs — a generous investment by European taxpayers, but also a potential repellent for private money. Why? The lack of a data-driven investment culture, the short-term need for profits, and favoritism of certain countries or sectors. All of it can make well-intentioned public VC money a poison pill for private sector VCs and the companies who take the funds.
But what does any of this have to do with anti-trust violations by Google? Everything. Were the European tech sector booming — were it, for instance, developing Googles and Apples and Facebooks of its own — the EU wouldn’t have to sue Google to give European companies a fair shot. But tech in Europe is flailing, and the Google lawsuit represents a misguided effort to show European voters that, in fact, someone is on the case.
Who is that someone? Margrethe Vestager, Europe’s anti-trust cop. She’s known for being tough and no-nonsense; the case against Google limped along until she took up the cause. Now formal charges are filed — and “Queen Margrethe III,” as she’s known in Denmark, shows no signs of giving in easily.
During her U.S. tour last week, Vestager sat down with PBS Newshour’s Gwen Ifill. To watch the interview is to see the farce in full effect. Vestager acknowledges that 90 percent of European searches belong to Google. She admits that other companies, Amazon, favor their own products on their sites. At the 1:40-minute mark, Ifill asks the question that’s on every viewer’s mind: “Consumers in America are used to seeing [preferential search results]. They expect that the top four results are going to favor whatever search engine they’re using, whether it’s Yahoo or Google. Is it different in Europe?”
To which Vestager struggles to respond. “Well, I think consumers expect Google to present them with the best answer to their query, and I think they’re very reluctant to accept that the best answer is always the same.”
But let’s say consumers believe they aren’t being given the best search results. Couldn’t they take their searches elsewhere? Ifill asks as much: “People can still … it’s their choice, they can go somewhere else if they want to get a different kind of result.”
Vestager pauses, but not before delivering a response that reflects the core of the problem with the EU’s case: “Yes, uh, and of course, you can go somewhere else. You can find other search engines. But Google holds a very dominant position. And if you do that, well, you should not, sort of, misuse or abuse the powers that you have. Of course, I think it’s obvious that you should congratulate Google of being successful and innovative and, of course, helping us all quite a lot.”
That’s the EU’s Commissioner for Competition, thanking Google for their good deeds as she publicly campaigns against them. Her dissonant views reflect those of her colleagues. The trouble is that the people they represent continue to use Google as their primary search engine, choosing it in huge numbers over Bing and Yahoo and countless others. That’s why this case is shaping up as an unusual one: politicians ready to sue into submission a hugely popular, privately-owned service, on the pretext that the service is delivering a poor product for its users.
Which is the message Google will surely send when it has its day in court: The people have spoken, and they have chosen Google, warts and all.
