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  • NETMEDIA International

[Opinion] Google under the test of competition law

While the Californian giant did not seem to have any obstacles to its growth until now, and was destined to continue its expansion in various digital markets, the various competition authorities and regulators around the world could be an obstacle to its strategy.

Google's near-monopoly position in the search engine market has allowed the company to generate comfortable advertising revenues. But Google now seems to be under attack from all sides by competition authorities around the world, as regulators seek new tools against digital platforms.

It is in particular in Europe that the company has been the most heavily sanctioned to date. First fined €2.42 billion by the European Commission in 2017 in the Google Shopping case, then €4.3 billion in the Android case in 2018, the latest decision concerns the AdSense service with a fine of €1.49 billion in 2019.

These prosecutions also extend to the member state level, including Germany, which recently passed new legislation targeting companies holding "significant importance" for competition and opened three investigations against Google. The new provision in German law includes a list of practices that may be prohibited if carried out by a company of primary importance for competition. The UK is also paying close attention to the company. An investigation by the UK authority into the deletion of third-party cookies on Google Chrome has led Google to propose commitments that have yet to be validated by the regulator. On June 15, a market study was initiated to analyze the situation in the field of mobile ecosystems, after it was found that Google and Apple held a "duopoly" in this area. In Italy, Google was fined €100 million for preventing the interoperability of an app with its Android Auto system, while an investigation initiated in October 2019 into its advertising services continues.

The French Competition Authority is not to be outdone.

After having pronounced precautionary measures requiring Google to negotiate with press publishers, in application of the European directive on related rights, the Authority is considering a new condemnation of the company for not having conducted these negotiations in good faith. Regarding advertising markets, the Authority recently fined Google 220 million euros for favoring its own services. According to Isabelle de Silva (president of the French Competition Authority), this is the "first decision in the world to address the complex algorithmic bidding processes by which online "display" advertising operates". It is also a rare example, considering the number of proceedings against Google worldwide, in which the company has agreed to acknowledge the facts and settle.

This decision could pave the way for another regulator's decision, this time at the European level. A few days after the decision of the French authority, the Commission announced the opening of a formal investigation against Google, for practices concerning its advertising services. The Commission was concerned that Google was distorting competition by limiting third party access to users' advertising data on websites and applications, while reserving this data for its own use.

In the United States, where Google has long seemed immune from such lawsuits and where European authorities were sometimes accused of being relentless, the company is subject to several parallel proceedings. One at the federal level led by the Department of Justice, which accuses the company of holding an "illegal monopoly" on online search and advertising, and two others led by coalitions of respectively 38 and 10 state attorneys general. There are also cases pending in China and South Korea.

While all of these proceedings often result in significant fines, it appears that traditional competition law alone cannot provide a lasting framework for practices and rectify the structure of digital markets. Some critics believe that competition authorities often act in reaction to practices that are already outdated in relation to the pace of development of these markets and that more proactive regulation is needed. In order to address the structural difficulties raised by these constantly evolving markets, a new regulatory tool has been proposed at the European level. The proposal by the European Parliament on December 15, 2020 of a Digital Market Act alongside the Digital Service Act is a milestone in the European digital space regulation strategy. The text proposes to identify companies with a "gatekeeper" status, to which it will be possible to apply a list of new obligations and prohibitions. The text, designed to target digital platforms, should strongly control the behavior of these companies and reserves the possibility, in more extreme cases, to take structural measures.

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