How the tech industry is pushing back against the European Commission’s Google case

Former U.S. Federal Trade Commission Chairman Ed Black testified Tuesday morning before the House Energy and Commerce Committee. Black, who is now the president and CEO of the Computer and Communications Industry Association, has…

How the tech industry is pushing back against the European Commission’s Google case

Former U.S. Federal Trade Commission Chairman Ed Black testified Tuesday morning before the House Energy and Commerce Committee. Black, who is now the president and CEO of the Computer and Communications Industry Association, has been a frequent critic of the Trump administration’s antitrust policies.

The Digital Advertising Alliance (DAA), which represents the advertising industry and claims to be “independent of third parties,” requested Black testify, saying, “We believe it is important to share our perspective on the state of competition in the United States and world with Congress and government regulators.”

The DAA and Black’s testimony touched on the value of online advertising, but ultimately, Black’s testimony paled in comparison to recent testimony at a European court about Google. Black called himself “very lucky” that he was able to testify with the DAA on his side.

Black testified that he had voted with the FTC when it approved Microsoft’s search engine, Bing, in 2009, and when the FTC did not file civil charges against Bing until 2012. The FTC said it was investigating whether Microsoft violated antitrust laws, and Black said the agency never charged the company.

The judge in the European case said last week that the FTC failed to properly investigate Google and gave the European Commission a new opportunity to look into the matter. Google will have to prove by July next year that it has not done any illegal behavior in a new $2.8 billion fine. (The case was not part of the recent update to European competition laws that the European Commission announced in December.)

Google may be able to manipulate its own search results and engineer its way out of the European Union over its search engine in the next year or so, but Black expressed some skepticism about how effective such a strategy would be for the company.

Google has historically tried to find a solution to objections to its search engine, but this “Herculean effort” would eventually backfire, said Black. If that happens, he added, the company’s financial plight could be precarious.

Black testified that Google should have to face criminal prosecution as well, as the company may be guilty of violating antitrust laws in some regions. The potential for that is not small — he cited the Hungarian antitrust case against Google, which alleged that the company showed images of real people and photos of children in its search results. Google failed to remove those images, which the Hungarian antitrust commission said suggested that Google was violating that country’s antitrust laws.

Google’s share of search traffic has fallen from 83 percent in early 2009 to 61 percent at the end of 2018, according to ComScore. Black testified that advertising plays a significant role in these declines, citing Facebook and Amazon as other companies that have hurt search engine advertising with their algorithms. Google has said that Facebook has influenced the decline in search engine advertising.

Black said that Google had “strong and aggressive strategies” to defend its search engine and was able to exploit privacy and data protection laws to improve its business.

Black testified that antitrust authorities had “failed to understand how much Google had used this trust to violate that trust.” He asked if regulators would “join this battle?”

Black also said that no one had ever given him information about anti-trust investigations, despite the Communications Act and several previous probes. But, he said, he was “encouraged” when Google announced it was hiring former antitrust officials, including James Cicconi.

The FTC has said that it would oppose any changes to its search algorithm proposed by the EU’s antitrust agency. And Google said it was not worried about the EU investigation, either, saying it had “conceded” that the regulator might not get a better result than it has so far.

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