Google and European Competition Policy

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Although horizontal agreements are usually penalised heavily to prevent fixed prices etc., horizontal cooperation is allowed in certain cases to share risks, to save on costs, to enhance know-how, to accelerate innovation, to increase product quality and to raise levels of investment. Therefore, the EU is both, the largest provider and destination of FDI in the world (measured by stocks and flows) (Szczepański, 2014).

On the other hand, Google is one of the biggest companies and one of the most valuable brands all over the world. Nevertheless, Google must change its illegal actions within 90 days after the Commission’s decision and apply the principle of equal treatment to avoid further sanctions. As the EU provides the toughest competition regulations worldwide, any other illegal effort is condemned to fail. Although the fine is just a drop in the ocean Google should change its strategy in general. A better image not only in Europe, but also in America would support Google’s growth on these highly relevant markets. Since the awareness of privacy in Europe rises, the EU tries to create a framework for the digital economy. This economy is still in the early stages of development within Europe as the old continent lacks of companies like Google. Because of that, Google should rather try to cooperate with the EU and participate in Europe’s digitalization process instead of being a legal opponent. Furthermore, several European countries are desperately looking for investments.

In addition to that, Google shouldn’t take the current situation in America for granted, although the company spent 180 Billion USD for lobbying in 2016 (Neue Züricher Zeitung, 2017). Compared to this sum and Google’s additional income based on its illegal actions the fine is just another drop in the ocean. Despite that, things are changing in America. In case of competition issues Google usually comes to an agreement with the U.S authorities, which are not as powerful as their European counterparts. Nevertheless, the 2.4 Billion Euro fine had not only an impact in Europe, but also in America. Especially America’s technology companies are working against Google. Some had requested the EU to penalise Google even more strictly. Furthermore, the U.S authorities may rethink their attitude towards Google. This leads to the conclusion that there are interdependencies between both sides of the pond, that must be taken into consideration. In Europe not only the awareness of Google’s aggressive tax avoidance, antitrust, privacy and copyright issues increased, but also the fear of Google’s market power in case of digitalization. Therefore, Google should not only compromise on its legal issues, but also work on its image to become a trustworthy partner.

References

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