What do you do when a company is just too good at what it does? This question seems to be looming in the heads of antitrust authorities throughout the European Union, where a new complaint about Google’s assertive practices has emerged. Google has recently been in the spotlight for its practices regarding search engine results, with websites claiming that Google did not react positively when their requests were denied. After a 19-month investigation, the Federal Trade Commission has decided that Google’s search engine in fact did not violate any relevant antitrust laws.
This new argument once again places Google in the forefront of the antitrust spotlight in Europe, where the search engine controls about 90% of the market share, compared to about 70% in the US market. The argument is that Google demands prominent placement of its search app, as well as its associated apps (such as YouTube, etc.) in new cell phone devices running the Android platform. There are several parties involved in the inquiry, including Nokia, Microsoft, and Oracle, under the auspices of a union called Fairsearch Europe, which aims to dismantle Google’s dominance in the European search engine market.
The article raises an important point that cannot be easily dismissed: why should someone be punished for just being better than their competitors? First, it seems a bit hypocritical that a company as massive as Microsoft should take part in a complaint regarding antitrust activities when they were in fact the culprits of some of the worst examples of this behavior in the past. Furthermore, it seems reasonable to assume that Google is going to exert its market force to ensure that its products receive the best possible placement possible– doing anything else would seem a bit silly.
During our discussion of Dell in class, we came to an understanding that Dell was able to secure almost immediate delivery of hardware parts from its suppliers, with payment delayed for 30 days, simply because it was Dell– it was big, had the power to cause competition between hardware parts suppliers, and its name was enough to ensure that they got what they asked for (same with WalMart). Similarly , by demanding that its apps be placed in a prominent position on Android devices, Google is simply exerting its dominance in the area.
Another consideration to keep in mind, at least in my opinion, is that Google’s apps have consistently been the best at what they do– can someone be punished for being the best? As the iOS 6 rolled out, it became quickly apparent that Google’s map app was significantly more reliable than the built-in iPhone map app. Similarly, it is reasonable that Apple would want to promote its own products, which explains why the Google Maps app was no longer a default app on its devices. The choice for consumers continued to exist, however, as the Google Maps app could be downloaded from iTunes. Similarly, despite Google apps being default on Android devices, the choice finally lies in consumers’s hands. They have the choice of choosing to use a different app that performs a similar function by downloading the relevant option from the Android App platform.
As the issue of Google’s antitrust behavior continues, I think it is important to always consider whether Google is in fact destroying competition unfairly, or whether its products are just so good that new entrants fail to capture the public’s attention and interest in their own products.