U.S. Rivals Behind EU Push to Force Google to Fix Search Results
(Bloomberg) -- It’s not only the European Union that has it out for Google.
Seven large U.S. tech companies had written to the EU’s antitrust watchdog urging it to go ahead with what ended up being a record fine on the world’s most-used search engine for obstructing competition and “stifling innovation.”
“As U.S.-based companies, we wish to go on the record that enforcement action against Google is necessary and appropriate, not provincial,” the companies, including Yelp Inc., Oracle Corp. and Rupert Murdoch’s News Corp., said in a letter to EU Competition Commissioner Margrethe Vestager.
The companies “have watched Google undermine competition in the United States and abroad,” they said in the June 26 letter. “Decisive action is necessary to restore competition and once again open the internet to innovation and growth.”
The European Commission on Tuesday fined Alphabet Inc.’s Google a record 2.42 billion euros ($2.7 billion) for skewing results to the detriment of smaller shopping search rivals. Google was given 90 days to change its behavior, or face further fines of up to 5 percent of its daily revenue.
The decision is a further step in the tumultuous seven-year EU probe fueled by complaints from small shopping websites as well as bigger names, including News Corp., Axel Springer SE and Microsoft Corp. It’s not a final blow, however. Google has the right to appeal to the EU’s top courts, and the commission said it plans to monitor Google’s reaction to the order “for a number of years.”
European politicians over the years have called on the EU to sanction Google or even break it up, while U.S. critics claim regulators are targeting successful American firms.
The letter seeks to dispel criticism that the commission is using its powers to deliberately and unfairly target U.S. companies.
“The case against Google, both in Europe and the United States, rests on sound legal and factual foundations,” the firms said in the letter.
In addition to three separate probes into Google, the EU last year slapped Apple Inc. with a record 13 billion-euro ($14.6 billion) tax bill plus interest after the commission accused it of benefiting from selective tax treatment in Ireland. Similar EU decisions may be in store against Amazon.com Inc. and McDonald’s Corp. over their tax affairs in Luxembourg.
On Tuesday, Vestager again refuted allegations that her actions were biased against U.S. companies.
“I’ve been going through the statistics in antitrust, in merger control, in our state aid work,” Vestager told reporters in Brussels after announcing her fine against Google. “I can find no facts to support any kind of bias.”
Luther Lowe, vice president of public policy at online review site Yelp, one of the letter’s signatories, said his company and competitors in the U.S. played a big part lobbying the Brussels-based commission to take action because American regulators weren’t as receptive to their arguments.
The U.S. Chamber of Commerce in March called on President Donald Trump to "address the misuse of competition law by other nations that impede international trade and competition and harm U.S. companies."
In an economic and political climate where tensions are heightened, “it is vitally important for the United States and Europe to cool the rhetoric, restrain the rancor and keep our eyes on the prize,” said James Baker, former U.S. Secretary of State, at an event in Brussels last week. “The prize is a transatlantic alliance strong and flexible enough to promote our common interest and our shared values.”