EU Fines Google in a Dose of Net Neutrality Schadenfreude
The European Commission's long-running investigation into Google has finally come to an end, and it's not good news for the search giant. Commissioner Margrethe Vestager confirmed today that the company has been fined €2.42 billion ($2.72 billion) for unfairly directing users to its own products rather over those of its rivals. It's the biggest financial penalty the Commission has ever handed out, eclipsing the €1.06 billion ($1.4 billion) charge incurred by Intel back in 2014.
In a statement, Vestager said: "Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.
Via calls for "net neutrality"** in this country, Google has been arguing that ISPs must act as common carriers of its content and must ignore the fact that nearly half of all US ISP bandwidth investment is used without compensation to support the business model of just two content providers (Google and Netflix). Google does not want ISP's to somehow favor other content providers over themselves, even though these others cost orders of magnitude less to serve than does Google's Youtube division.
Well, as I wrote before, the EU is bringing karmic justice to Google via this decision.
Hah! I think this is a terrible decision that has nothing to do with economic sanity or even right and wrong -- it has to do with the EU's frequent historic use of anti-trust law as a way to bash foreign competition of its domestic providers, to the detriment of its consumers. But it certainly is Karma for Google. The EU is demanding that Google's search engine become a common carrier, showing content from shopping sites equally and without favor or preference. The EU is demanding of Google exactly what Google is demanding of ISP's, and wouldn't you know it, I don't think they are going to like it.
** I put "net neutrality" in scare quotes because I think it is a term that means exactly the opposite of what it says. Neutrality is what we had 2 years ago, with no regulation that favored either content providers or bandwidth providers in the typical negotiations and back-and-forth that occurs in every supply chain. "Net neutrality" actually means tipping the scales and being non-neutral in favor of content providers over ISP's.
