EU Investigation Puts GBS Power Grab in Perspective
The European Commission’s Directorate General for Competition announced today that it was opening an investigation into allegations of Google abusing its dominance in online search.
“The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services which are specialized in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services,” said the Commission in a press release.
In opening the investigation, the Commission joins other investigations about Google’s use of its monopoly on search to stifle competition in vertical search markets like books. The Texas Attorney General opened a similar investigation into Google’s search manipulation in September and Harvard Professor Ben Edelman released a study that found that “…Google’s systematic promotion of its own services sharply reduces the space available for others. And with results systematically featuring listings from Google and its hand-selected partners, there is reason to doubt Google’s promise of unbiased results guided only by relevance.”
Like we saw with the GBS, Google’s own business behavior is uniting a chorus of voices against itself. A cross-section of voices from around the world including the U.S. Department of Justice, foreign governments, State Attorneys General, authors, independent publishers, libraries, consumer advocates, privacy groups and hundreds of other organizations have united in opposition to the GBS because of its faults on antitrust, copyright and class action grounds.
Akin to Professor Edelman’s report, a report from Technology Review’s Christopher Mims after parsing through University of Chicago Law professor Eric Fraser’s exhaustive paper on the GBS concludes that the GBS means “that under the current settlement, there is no reasonable expectation that a competitor to Google Books will or could ever arise. Because Google will be allowed to set prices more or less in collusion with publishers, this will give Google no effective competitors in this space. Google will be a de-facto monopoly.”
As the evidence against Google mounts, it’s worth revisiting why this is a bad thing for consumers. Google controls about 70% of the online search market in the United States, and in some other countries, Google’s marketshare is above 90%. Why does that matter for you? Because Google controls so much of the online search market, it is the de facto portal to the internet for many users. Thus, as Google puts it, it has the power to be the kingmaker of the internet, picking winners and losers simply by placing certain results at the top of search pages.
Book search is another vertical market that Google is seeking to dominate. As GBS objectors from around the globe have stated before, granting Google an exclusive set of rights over millions of books through a flawed class action process that seeks to turn copyright policy on its head and trample individual author’s contract rights – as the GBS seeks to do – is a terrible idea.