On 15 April 2015, Margrethe Vestager filed a formal antitrust lawsuit against Google’s operations in Europe. The following day, an investigative journalist headed to Europe to verify some of the claims presented by the EU’s competition commissioner. One of the first interviewees, Miriam Hofer, owns a small retail shoe business in London. Her business started as a simple retail outlet in the small town of Newbury, but after receiving some funds from her husband, she relocated to London. Her husband proposed the development of a website to expand market reach. Additionally, the couple argued that there was a need to redesign their business model to fit within the current digital platform.
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Their small website was hosted in the UK in 2009. In 2010, Miriam’s daughter advised her parents to implement an online marketing strategy in order to improve the company’s ranking in the search engines. The strategy was very effective because it managed to improve the ranking. Additionally, it identified some changes in the company, among the first page of Google, and among the first three results in Yahoo.
Miriam claims that the situation started changing two years ago when she realized that her ranking had shifted to the second page on Google. Despite the change in Google’s ranking order, the investor claims that it did not change in Yahoo. During the interview, the journalist asked whether Miriam had subscribed to Google’s advertisement service at which she said she could not afford. The investor also argued that she noted an increase in the number of competing firms in the region.
According to Macnab, the competition law maintains that all companies must offer the most favorable terms to their goods and services (13). Additionally, it encourages firms to be efficient, innovative, and reasonably competitive. The type of competition emphasized by this law allows companies to operate independently but within the constraints of the competitive pressure created by other firms. However, if one company interfered with the competitive pressure, then an antitrust law is breached. Pace defines antitrust as an act of creating unfair competition by restraining the operations of other companies of creating monopolies that discourage new entrants into the market (par. 4).
According to Article 102 of the EU Treaty, dominant companies are not supposed to misuse their competitive advantage to suppress the marketing strategies of their competitors. In Google’s case, the company had been manipulating its search algorithms to the advantage of its shopping service. According to Guynn, Google’s online service had been offering free services using key Ad-words to improve a company’s performance in the search ranking (par. 7).
However, it introduced paid submissions in 2012 to companies interested in improving their ranking in the search index. The case extends to the Android mobile operating system, which is one of the leading strategies in Google’s smartphone marketing.
In an interview with Guynn, Vestager argued that Google is using its dominance to suppress the marketing initiatives of companies that have not subscribed to its shopping services (par. 6). Additionally, she claimed that Google had already been supplied with complaint forms for over five years, but it had not responded to any of the issues presented. In the antitrust law, Google is misusing its platform as the largest search engine to control consumer choices. In the plaintiff’s submissions, Google is using an illegal algorithm that prioritizes the search results of only the subscribed corporations. This trend leaves a significant gap in the competitiveness of many corporations that are not registered with the Google shopping service.
Additionally, the plaintiff argues that the antitrust law establishes legal and business models that should be followed by all corporations. Companies operating in a common geographical location should ensure that their operations do not interfere with the operations of competitors. The law emphasizes autonomy and respect for others.
The plaintiff stated that Google had ten weeks to respond and present submissions against the claims presented by the European Union. The timeframe submitted by the EU is meant to assess the reactions of EU consumers and investors. Additionally, it is meant to give a reasonable period to Google for the presentation of arguments in favor of its ranking algorithms. The EU has established strong legal frameworks against multinationals that breach the antitrust laws. The region recognizes the efforts and business opportunities among small, medium, and large corporations. Google is the biggest search engine in the world. The plaintiff maintains that the company has been altering the search algorithms in favor of those companies already subscribed to Google shopping services.
The antitrust law maintains that multinationals should never capitalize on their influence to alter the competitive advantage of other companies. In an interview with Eunan, an Irish entrepreneur, the investor claimed that the end of the Ad-words generated imbalances in the ranking of companies using online marketing strategies. In the EU antitrust law, the product market and the geographic markets are evaluated to ascertain whether they affect the competitiveness of other companies. In Google’s case, the evaluation of the product market exposes the number of firms that rely on Google to market their products. Additionally, the geographical market must be homogenous in order to ensure that the deficits are not introduced into an investor’s competitive strategy. The effects of breaching these performance contracts interfere with the market shares and hinder the competing firms from making credible assertions.
Google allows its clients to feature among the first search results. In the antitrust law, a company should not have competitive advantages over its competitors. In fact, the company should establish an effective solution to its product and geographical market. The plaintiff maintains that the claims are currently in the hospitality and travel industries. However, these claims are expected to expand into the travel and maps sector of the competing form. Additionally, the popularity and manipulation of the Android by the parent company shift the search results of the priority settings to Google clients. The company does not allow non-subscribers to have equal opportunities as its clients. Google’s approach causes intrusive antitrust laws that demonstrate its failure in safeguarding the opportunities of other companies.
In an interview with Jack, one of the supporters of Google’s initiative, the interviewee claimed that the results have been influencing the market direction. Additionally, the investor claimed that corporations are required to invest in their online marketing platforms to enhance their competitiveness. Jack argues that Google has been establishing a favorable competing environment by requesting consumers to cater to investment charges. The investor observes a significant change in the popularity of products because the current search criteria prioritize the companies that have already invested in Google’s shopping service.
In one of the arguments presented by the defendants, president Barrack Obama termed the accusations as charges against America. In this argument, the white house claimed that the EU was initiating an anti-American move. However, the author maintained that Google was an independent company that was supposed to face its charges without having internal interference. The president’s remarks are supposed to serve as patriotic sentiments against multinationals. However, Vestager maintains that the EU has a right to understand Google’s aims and strategies in the European market. Additionally, it maintains that there is a need to share the company’s operations with the EU laws to establish a concession between the plaintiff and the defendants.
The research demonstrates that Google has a strong case to answer because it has already interfered with the EU’s competitive strategies. In fact, the company has failed to explain its suspicious operations against some of its operations. Google has faulted regional and international laws at the expense of its competitors. The operations of the company in the EU have demonstrated that the company does not respect the independence or competitiveness of other firms in the region.
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The lead plaintiff, Vestager, argues that Google has made it impossible for emerging European companies to feature among the first corporations in Google’s search results. When Google prioritizes its search engine to feature the companies in its shopping service, the findings are biased towards corporate goals. The EU argues that Google has been manipulating its closest competitors using its monopolistic criteria to divert investors’ actions towards the majority shareholders. The case is expected to be formally presented before a court after the expiry of a 10-day ultimatum issued by the EU.
Guynn, Jessica. Google’s EU ‘enforcer’ on antitrust, Twitter, Daily Show. 2015. Web.
Macnab, Andrew. European Community law of competition. Oxford, United Kingdom: Oxford University Press, 2013. Print.
Pace, Lorenzo Federico. European Antitrust Law-Prohibitions, Merger Control and Procedures. 2007. Web.