Almunia struggles to defend Google case

By trying to strike a deal with Google, the competition commissioner has laid himself and the Commission open to accusations of political interference.

In competition law, four years is a short time, Joaquín Almunia, the European commissioner for competition, seemed to be saying as he defended his handling of an investigation into Google on Tuesday (23 September).

The European Commission’s failure to strike a satisfactory settlement with Google after almost four years of investigation was justified by the “very complex”, nature of the case, he told members of the European Parliament’s committee on economic and monetary affairs.

The Commission’s competition department, which is principally concerned with how Google presents its search results, including links to its own services, and whether this puts rivals at a disadvantage, decided in May 2012 to explore a settlement deal with Google. It passed up the option of formally charging Google with breaching European Union antitrust rules, a step that can lead to a fine, a settlement or the charges being rebutted.

Progress has since been slow, argued Almunia, because competition law has never before been applied to the market for search, while Google’s services were changing “almost every month”, Almunia argued.

If four years seem a long time, consider that the Commission’s myriad antitrust dealings with Microsoft lasted 13 years, he continued. And yet “there are more problems with Google’s functioning” than with Microsoft. Consider also that the United States’ Federal Trade Commission (FTC) closed the case “without being able to do anything” to Google, said Almunia. “We want to do something”. More, he promised, was on its way, alluding to forthcoming inquiries into Google’s Android smartphone operating system and “distortion of traffic”.

It was a defence that was more than a little disingenuous. For example, the FTC was not constrained from acting against Google: it concluded that the core allegations being investigated by the Commission were unsubstantiated under US antitrust law. Nor are the two Microsoft cases really comparable with the Google case. In one case, the Commission adopted a prohibition decision after four years, in the other the Commission settled the charges after two years. It was Microsoft’s subsequent failure to comply with those decisions that led to years of legal wrangling, but cost the company some €1.5bn and served as a stark lesson to others. In sum, four years certainly seems a long time when one considers that the main objective of settling was to ensure a “quick resolution” in what Almunia described as “fast-moving markets”.

But Almunia was at his most disingenuous when making an impassioned defence of “the independence, impartiality and objectivity” of the Commission’s competition procedures in the face of intense lobbying. “We are the most respected competition authority in the world precisely because of the way we guarantee these principles.”

The lesson of the Google case is that, by seeking to strike a deal, Almunia invited all and sundry – from MEPs to national politicians – to proffer their opinion on what is meant to be a legal process. Almunia may protest that he was uninfluenced by it all. But is the same true of those other commissioners within the college who either actively or tacitly objected to the third settlement deal backed by Almunia, which he eventually rejected earlier this month?

The Commission is packed with excellent competition lawyers able to draft watertight advice and decisions. Almunia should have made greater use of them and relied less on his political advisers and negotiators. His readiness to cut a deal has backfired.

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