EU’s failure a lesson for US

Google barely took a scratch from three European Union antitrust probes that lasted nearly a decade and cost it more than $9 billion. Regulators are still struggling with how to tackle anti-competitive behaviour, a lesson the US needs to learn.

Three years ago, the EU blasted out a then-record-breaking fine together with an order for Google to stop favouring its own shopping ads. A year later Google got an even bigger penalty and a demand to stop pushing its search and web-browser apps onto Android mobile phones. The company was fined a third time last year and continues to face EU scrutiny.

Margrethe Vestager, the EU’s antitrust chief, has said she regrets not being even bolder because tech firms like Google are increasingly able to squeeze into new markets and expand rapidly. Her newest plan is to draft rules to curb a big firm’s ability to favour its own products and to arm regulators with new powers to move more swiftly to try to safeguard competition before it’s overwhelmed.

The EU’s turn to new laws to tie down Silicon Valley giants acknowledges that antitrust can’t easily tackle big firms in fast-moving markets that gain huge advantages from the data they collect, the reputation they build among users and prominent prompts that have helped them keep ahead of rivals and sweep into new areas.

A former antitrust enforcer said last month that he and his colleagues thought they were “going to the extreme of what we could do” with the EU’s shopping case. He conceded that it was now “obvious” that Google had already swamped the competition.

Officials had deliberately opted for vaguely worded orders for Google to give equal treatment to rivals to avoid mistakes from an earlier probe into Microsoft Corp. A rigid prescription for the company to strip out media software from its Windows operating system was a failure with no computer maker choosing to install it.

Google was left free to decide how it would implement the EU’s instructions. It chose to auction off shopping ads, angering companies critical of having to pay Google to gain search traffic and of Google’s initial prominence in the product ad slots.

It also set up a choice screen for new Android phones that so far hasn’t yet generated many downloads for rivals. Smaller search rivals such as DuckDuckGo have begged the US not to copy a “fundamentally flawed” EU model that’s failed so far to inject much competition to Google’s 97% market share for mobile search in Europe, according to StatCounter.

Google didn’t immediately reply to a request for comment on its EU cases. bloomberg