Tuesday, May 22, 2012

Will Google be EU's next antitrust target?

NYT thinks the odds are high, according to today's front page story.  The euro-trustbusters are concerned that, for any given search string, Google gives its own services priority over those of rivals.  Google's advertising business also is a focus of the investigation. 

Google has about four-fifths of the search market, so it definitely meets the numerical standard for a monopoly case in the US (where a parallel investigation is taking place).  The EU can charge Google a fine of 10% of its global revenue, a fine that would be twice as much as the London Whale lost for JP Morgan.  Google's defense will be that its dominance is due to having a superior product. 

Antitrust cases typically take many years to settle.  In industries subject to rapid technological change, the issues that launched the case may be moot by the time it is resolved (e.g., IBM, Microsoft).  It is hard to imagine a world without internet searches 10 years from now, but what if someone comes up with a better way of doing it than Google?

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