Is the European Union (EU) out to get Google? You may think so, considering that EU regulators are poised to bring anti-competitive-conduct charges against the search giant, while US regulators happily settled their differences with Google a couple of years ago. Add the European regulatory efforts to force Google to let people eliminate certain permanent-seeming records of their past conduct and you may think there is some deeper cultural explanation, such as old-world scepticism of new-world technology.
It turns out that culture does matter in the EU’s action against Google — but for more complicated reasons than you may think. Google has, in fact, achieved greater market penetration in Europe than in the US, so Europeans, as opposed to their bureaucratic overlords, clearly like Google very much. But European antitrust law has a subtly different focus than its American counterpart. It protects competitors, not competition. And therein lies a tale of what makes European values different from American ones.
Antitrust law is an immensely complicated field, and the nonexpert — like me — enters at his peril. Nevertheless, it is worth knowing that, as interpreted by the European Court of Justice, Article 82 of the Treaty on the Functioning of the European Union differs from American antitrust law, which is based on judicial interpretation of the 1890 Sherman Act.
The European treaty provision prohibits “abuse” of a “dominant position within the common market”. This prohibition imposes on a company what the European court calls “a special responsibility not to allow its conduct to impair genuine undistorted competition”.
This language suggests a different emphasis than US law, which focuses on prohibiting anti-competitive behaviour that harms the consumer. The European approach implies that market dominance itself can be the source of a legal violation, even if the dominant company is not trying to act anti-competitively. US courts do not think in terms of the abuse of a dominant position. A brief filed before the Supreme Court by US government antitrust agencies a decade ago actually argued that the Sherman Act was not an “abuse of dominance” law at all.
A decade ago, it was commonplace for antitrust scholars to say that EU and US law diverged sharply as a result of this value difference — that US law protects competition itself for the benefit of consumers, while EU law favours the existence and rights of competing businesses.
To be sure, a rival view exists today, namely that more sophisticated economic theory is leading to convergence between American and European standards. Yet, the difference between American regulators’ attitude towards Google and that of their European counterparts strongly suggests continued divergence.
Why should this difference in values exist? It is tempting to conclude that the EU’s political culture emphasises the usefulness of multiple large actors competing in parallel — much like the EU’s member states. In this cultural sense, Google looks like the US itself: An imperially dominant player whose very position of dominance threatens the capacities of actors who may want to compete. It does not help for this analysis that Google is a US-origin company. It also should not escape notice that the information revolution is still broadly understood in Europe as having an American origin.
The US values of freedom of speech and information, taken to the point of absolutism, have not found the same degree of popularity in Europe as has the information technology itself. The EU’s willingness to limit the flow of information, for example, by allowing individuals the right to remove embarrassing information about themselves, is in this sense of a piece with European limitations on hate speech that would never be allowed in the US.
When it comes to information, Americans tend to believe that the government should allow any result that the private market allows. This, after all, is the heart of Oliver Wendell Holmes Jr’s famous appeal to the metaphor of the marketplace of ideas to justify free speech under the First Amendment.
In practice, Google need not panic. European penalties for the abuse of dominance are less draconian and more gentlemanly than US penalties for violating antitrust laws. Europe has no analogue to American criminal antitrust law and there are no treble damages available to those who show a violation. It could even be argued, as my colleague, the antitrust authority, Einer Elhauge, suggested to me in conversation, that weaker penalties are a reason that Europe has more aggressive standards of legal violation.
Yet, the EU’s anticipated enforcement action against Google is nonetheless a reminder to US companies that the American ideology that may unconsciously undergird their products and even their industries does not translate perfectly across borders. Information may want to be free, but, nation-states persist. And they, or their proxies like the EU, still get to do the regulating.
In the 2004 case, Verizon Communications vs Trinko, the US Supreme Court did not go quite that far, but it did essentially say that dominant market players should not be obligated to share their competitive advantage in order to promote competition.
— Washington Post
