The European Commission is batting for the consumer by hitting Google with a record fine

Competition chief Margrethe Vestager says the search giant abused its dominant position 

James Moore
Chief Business Commentator
Tuesday 27 June 2017 16:01
Google hit with record EU fine over 'unfair' shopping searches

An example of just what Britain is losing through its nonsensical decision to quit the European Union was this morning provided by Margrethe Vestager, the European Commission’s competition chief.

Vestager hit Google with a record €2.4bn (£2.1bn) fine for exploiting its dominant position as a search engine to favour its online shopping service.

In a statement, she rounded on the internet giant, arguing that it had “abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors”.

Now, Google didn’t do anything wrong in securing its de facto monopoly in the search business. It won that fair and square because it was, and is, the best service out there.

But if that position is used in an attempt to disadvantage rivals in other lines of business then it becomes problematic.

The issues identified by Vestager might not, on the face of it, seem such a big deal. Rivals that provide online marketplaces such as Amazon and eBay are, as Google has argued, big and powerful companies themselves and they don’t seem to be suffering too much.

But here’s the thing: if you give big companies the green light to rig markets in their favour, they will do so again and again and again, because, well, why wouldn’t they?

Ultimately that harms not just their competitors, it harms us as consumers.

One of the problems created by the rise of companies like Google, or rather with its owner, now called Alphabet, is that they have become so big and so powerful that they can roll over and crush most of their critics. They hold nearly all the cards.

America’s political system is so in hock to big money, and to the deployment of it by lobbyists, that it’s hard to see anyone seriously challenging its behaviour there. As for Britain, don’t make me laugh. Has the British government ever stood up to corporate interests on behalf of its citizens?

With the EU, it’s a little different. Oh sure, there are still lobbyists floating around Brussels, armed with fat cheque books. And it would be foolish in the extreme to pretend that corruption doesn’t find ways of flourishing there.

Nonetheless, there are also people like Vestager, who have proved more than willing to stand up to corporate misbehaviour.

Because those people have the backing of 27 nations, and the collective purchasing power of more than half a billion people, they have to be listened to. They have enough clout to go into bat for the consumer against the titans of Silicon Valley.

As Chuka Umunna, the former Labour frontbencher, and current chair of Vote Leave Watch, tweeted: “This case is a perfect example of the value that cross-border institutions like the EU bring.”

It is also the perfect example of what Britons will lose when we are on the outside looking in, and when our Government reverts to type by rolling over for big American companies.

Of course, this isn’t over. Google will appeal, and Europe and America will snarl at each other, while Britain tries to hide in a ditch.

But a blow has been struck all the same. Corporate power has, for now, been checked. In making it happen, Vestager has done a service for all of us.

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