Google’s enemies line up to fire in antitrust probe – The Wall Street Journal

Being number one is a good way to make enemies, as Google seems poised to learn. The company is the target of a growing number of competition probes. Governments from the US to Europe are looking at how Google uses its dominant market position to stifle rivals and maintain its enormous margins. The probes in the European Union are barrelling ahead – Google has been paying big fines for its bad behaviour on Android and elsewhere. But it's the threat of a US investigation that really poses a danger to Google's dominance. It's encouraging to see America finally get around to investigating the market structure in the tech business. It seems clear that the enormous network effects that tech giants like Facebook and Google enjoy contain the seeds of serious market issues. One of the most important things that governments can for the economy do is to keep markets competitive. It's enormously tempting to simply let national giants steamroll on and to capitalise on their juicy margins with higher taxes. But as the long economic history of the US has shown, that way lies stagnation. It's actually much better, in the long-term, for a government to force national giants to become smaller, leaner, and tougher. This encourages innovation, grows productivity, and ultimately helps build a more diverse, resilient economy. It's an important lesson for all governments, especially in a market so subject to oligopoly as SA. – Felicity Duncan.Google's Enemies Gear Up to Make Antitrust Case.By Ryan Tracy in Washington and Valentina Pop in Brussels.As U.S. officials prepare an antitrust probe of Alphabet Inc.'s Google and possibly other Silicon Valley giants, a loose-knit crew of its rivals is gearing up to help..___STEADY_PAYWALL___.In industries from news to travel to online shopping, competitors of Google are readying documents and data in anticipation of meetings with the Justice Department, according to industry representatives..Many of these companies have long argued that Big Tech platforms illegally abuse their market power. In recent years some of them have found a receptive audience in Europe, where authorities have thrice fined Google for alleged monopolistic practices. Google has paid the fines but is challenging them in court..Now rivals are stepping up their advocacy in the U.S., where antitrust enforcers recently divvied up the job of examining antitrust concerns at large tech platforms, with the Justice Department preparing a Google probe. The Wall Street Journal reported on the potential probes by the department and the Federal Trade Commission earlier this month, citing people familiar with the matter..Antitrust lawyers say any probe could take years to complete. Battle lines are already forming. Google is preparing its own data and arguments, the Journal has reported. It also recently overhauled its Washington lobbying operation with an eye toward amplifying the message that its products promote competition and benefit consumers..Google has successfully navigated U.S. regulatory scrutiny of several previous mergers. In 2012 and early 2013, it persuaded the FTC not to pursue a possible antitrust case by agreeing to change some business practices..A Google spokeswoman declined to comment..The stable of Google critics includes TripAdvisor Inc. and Yelp Inc.,which accuse the search giant of unfairly favoring its own content..Oracle Corp. , which has a long-pending copyright case against Google, has briefed European antitrust regulators about Google's use of data to target ads and was part of a successful coalition of plaintiffs against Google's alleged anticompetitive behavior in its Android operating system for smartphones, which led to a record fine issued by the European Commission last year, of €4.3 billion..News Corp, which owns The Wall Street Journal, and other publishers say Google and other tech platforms siphon ad revenue away from content creators..All these companies say they would welcome further antitrust scrutiny. They and others are expected to seek out Justice Department officials as they prepare a Google probe, according to industry executives and antitrust lawyers..Still more firms haven't criticized Google publicly, but privately stand ready to provide information to U.S. authorities about practices they view as potentially anticompetitive, according to industry representatives.."There is a lot more concern that you hear behind closed doors," said Jason Kint, chief executive of Digital Content Next, a trade association for online publishers that has argued online tech platforms are harming competition and consumers.."Cautious and quiet optimism," is how Mr. Kint described his members' mood upon hearing the news of the potential Justice Department probe..Private testimony was key in the FTC's previous probe of Google, when competitors such as Microsoft Corp. provided regulators information on Google's business practices, according to an internal FTC report from 2012. A Microsoft spokeswoman said the firm hasn't filed a formal antitrust complaint with U.S. regulators and declined to comment further..Last month a veteran of the online advertising industry—which Google leads, but where rivals don't typically criticize it publicly—told the Senate Judiciary Committee that policy makers should consider breaking up tech giants.."We need to assume that internet giants, like any other big companies, will use their assets to maximize profit and strategic value," said Brian O'Kelley, former chief executive of AppNexus, an advertising technology firm bought by AT&T Inc.last year after what he says was an unsuccessful attempt to compete with "the Google Super-monopoly."."Either break up the internet giants or force them to treat their component parts at arm's-length," he said..In addition to information gathered from U.S. companies, federal authorities can gather evidence from abroad. During the 2012 FTC probe, U.S. and European investigators shared documents and "updated one another on theories and evidence" during regular phones calls, according to the internal FTC report. EU antitrust officials say they are willing to cooperate again with their U.S. counterparts once they open the probe..Regulatory agencies generally need a company's permission before sharing private business data with another regulator, but companies typically grant that permission so as not to antagonize investigators, experts said..To some extent, antitrust probes are more straightforward in Europe than in the U.S. because the European Commission, the antitrust enforcer, has the power to launch an investigation and to decide on the fines and the remedies that the company must comply with. The company can then appeal in EU courts, but the reputational damage is done and it takes years for the courts to rule on the appeals..In the U.S., the Justice Department would have to bring the lawsuit in a federal-district court. "In that sense it is more difficult," said Thomas Vinje, a partner at Clifford Chance who represented Oracle and other companies in their complaint against Google's alleged abuse of dominance in the smartphone operating system..Despite having succeeded in getting a record fine against Google last year, Mr. Vinje says the commission moved too slowly for the decision to matter and that Google's anticompetitive behavior persists. "Unless you move quickly and impose serious and effective remedies, it's a waste of time," Mr. Vinje said..Write to Ryan Tracy at ryan.tracy@wsj.com and Valentina Pop at valentina.pop@wsj.com

Google’s enemies line up to fire in antitrust probe – The Wall Street Journal

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