Google and the Trans-Atlantic Antitrust Abyss

Abstract

During the late 2000s, several jurisdictions, including the EU and the U.S., opened investigations into potential antitrust violations by the Internet search firm, Google, for alleged bias in the ranking of the links returned in response to search queries. While the EU investigations in 2017 resulted in a record EUR 2.42 billion fine (with further proceedings pending), the U.S. proceeding came to a close in 2013 with a brief statement by the Federal Trade Commission exonerating Google of antitrust law violations. These diametrically opposed outcomes occurred despite the similarity at the core of the single-firm antitrust doctrine that prevails on the two sides of the Atlantic and the near indistinguishability of the factual allegations of Google’s conduct raised in the two jurisdictions. In this paper, we outline and compare the merits of the two cases in an attempt to reconcile the different outcomes, with a particular focus on the theories of harm examined by the two agencies and the supporting evidence they considered. We ultimately observe that the EU in this case applied a more encompassing legal standard for abuse than in past cases. Specifically, the EU Google Search (Shopping) matter appears to have moved away somewhat from the characteristically American consumer welfare standard, as employed by the FTC in its consideration of Google search. Rather, DG COMP appeared to apply a legal standard more closely resembling the characteristically German ordoliberal approach, which focuses on impediments to the competitive market process and the preservation and promotion of consumer choice. However, because the EU did not specify the legal standard under which it was proceeding, its reasoning is opaque, so that many of the same concerns motivating the decision by the FTC to close its investigation without action inexplicably seem to have motivated the EU to declare an infringement of EU competition law and levy a record-breaking fine.