More Needs To Be Done Even Though EU Antitrust Body Is The Toughest On Tech Giants

Despite the antitrust body of the European Union being one of the toughest regulators for large tech companies, and have pulled up and punished a number of global tech giants over intentional market dominance strategies aimed to wipe out rivals, large tech companies are still ruling the roost in the continent, claimed a report published by the New York Times.

The report cites the case of Kelkoo, once a leading online shopping destination in Europe, owned by Richard Stables, which was allegedly victimized by Google resulting in a fine of $2.7 billion fine in 2017 being slapped by the European Union over violation of antitrust laws.  Stables had complained for years about the power that Google was wielding to smaller competitors in Europe to marginalize them and drive them out of the market. Stables had to close down the company because of unethical competition from Google even while the Eu was hearing the case against the search engine giant.

“It took basically eight years to get something done,” Stables, 50, said in an interview at his London office to the New York Times. “That’s a complete disaster.”

And even as United States market regulators are investigating Google, Amazon, Apple and Facebook over their alleged power in the market, the case of Stables shows that the actions taken by the EU against these companies were incomplete and more needs ot ne done to ensure a level playing field for all companies.

One of the major issues with antitrust cases in Europe is that they take a very long time – sometimes several years, to get over, partly because of the stalling techniques used by the lawyers hired by companies. Such a technique gave enough time to the tech giants to drive  out competition from the market, claimed the report citing quotes from companies, lawyers and consumer groups who were part of the law suit against Google.

Another mistake that had been committed by the EU was that instead of focusing on the entire business of the etch companies, the antitrust regulators probed only one single aspects of the companies such as the Google shopping in the Google case. And according to the report, the focus has been more on the imposing record amounts of penalties rather than trying to force the etch companies to bring in structural changes which can help in creating a level playing field for smaller rivals in the market.

And despite the record levels of penalties imposed against Google, the tech giant’s business has not suffered as its revenues increased from $23.7 billion in 2009 – when the antitrust complaint was filed by rivals, to $137 billion in 2018 – a year after the EU slapped a huge fine on the company for violation of antitrust laws. .

“You have to move fast and impose remedies that actually bite,” said Thomas Vinje, an antitrust lawyer who represented companies against Google in Europe.

Antitrust regulators in both Europe and the US have signaled in recent week about their belief of the need for stricter enforcement of antitrust laws in the tow regions.

And mew approaches are being put forward by the top antitrust regulator in the European Union, Margrethe Vestager, under whose regimen Google has been fined a total of about $9 billion in the last two years over antitrust issues. A rule known as “interim measures” that has been used rarely has been applied by Vestager which acts like a cease-and-desist order which aims to force companies to change a particular way of its functioning till the completion of a related antitrust investigation.

Shifting of the burden of proof in cases involving large tech companies is another idea that has been put forward by Vestager. Her office is currently investigating Amazon and exploring cases against Facebook and Apple. Under this new approach, it would be incumbent on the tech companies to show that their business behavior actually is productive for customers. Typically the burden of proving the customers are  being harmed lies with the regulator.

“If the American authorities learn from Europe’s experience, they have a big opportunity” to restore competition, said Shivaun Raff, a co-founder of Foundem, a price comparison website that filed the original complaint against Google in 2009. In October, she met with federal and congressional investigators in Washington.

“Google used what may charitably be called its rights of defense, which was good lawyering,” Vinje, who represented Google’s competitors, told the New York Times. “By the time the decision was issued so many years later, Google had largely achieved its objective of pushing the pioneers in the comparison-shopping market out and basically dominated the market itself.”

(Adapted from NYTimes.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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