EU's "Competition Commissioner" Rejects Google Offer to Settle Anti-Trust Dispute

Meanwhile Google fined $1.2 million for privacy law violations in Spain

Reason

The European Union started dogging Microsoft over antitrust concerns in 1993, the same year the EU was officially established, finally settling the case in 2003 before coming back to Microsoft's well with more anti-trust concerns a few years later.

Microsoft is hardly anyone's idea of an IT monopoly. Instead, the EU and its "competition commissioner" have set their sights on Google.

From Reuters:

Google's revised proposals to settle an antitrust case are not acceptable, European Union competition commissioner Joaquin Almunia said on Friday.

"The latest offer as submitted by Google in October … the latest proposals are not acceptable in the sense that they are not proposals that can eliminate our concerns regarding competition," Almunia said in a Spanish radio interview, according to a partial transcript provided by the European Commission.

Free market forces best ensure competition, while government officials tasked with ensuring "competition" usually do anything but, being best in distorting those very forces.

In Spain, meanwhile, Google was fined $1.2 million for violating privacy laws.

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Comments

[UnCivilServant]

Google should passive aggressively erase the EU from the internet by re-writing search queries to find the Expanded Universe instead of the European Union. When asked, just claim "It's more popular"

[pan fried wylie]

Isn't it?

I'd much rather vacation on Tatooine.

[Heroic Mulatto]

Indeed. This song beats anything that has ever been in Eurovision, ever.

[tarran]

Please don't ever link to anything from that execrable movie.... Ever!

Now eye need bleach with which to wash my eyes.

[Heroic Mulatto]

Not a Boba Fett fan, I take it?

[Episiarch]

tarran's much more of a Greedo guy. Yeah, I know it's absurd, but that's who he identifies with.

[tarran]

If I were a Boba Fett fan, the movie would revolt me even more; the shitty way he was portrayed in that shitty movie was unusually shitty.

[Heroic Mulatto]

I agree that Fett got punked in Jedi.

[Rich]

"the latest proposals are not acceptable in the sense that they are not proposals that can eliminate our concerns regarding competition," Almunia said.

So, in that sense, proposals that you off yourself *are* acceptable?

[Mad Scientist]

In Spain, meanwhile, Google was fined $1.2 million for violating privacy laws.

How is something like this enforceable without Google just bending over? I assume Google has advertisers in Spain who send them money, but do they have an office? An employee? Anything at all they can hold hostage if Google doesn't pay up? I assume Spanish cops aren't raiding the headquarters in Mountain View.

[Rich]

I assume Spanish cops aren't raiding the headquarters in Mountain View.

Yet. No one expects ...!

[KPres]

Street view? Plus, the fine amounts to 0.0024% of Google's annual revenue. It's probably good business to accept the fine so that all the witch hunters will be satisfied thinking they stuck it to the man.

[Curtisls87]

I haven't seen any Spanish cops down the road in Moutain View, but if they're as worthless as the Spanish cops I dealt with in Barcelona, Google has nothing to fear.

[Episiarch]

If you ever needed proof that the government is just a mafia, look at how much they (such as the EU) act like one. "Oh look, Google has now gotten huge. Time for the shakedown! Oh, you modified things to alleviate what we said were our concerns? No, you didn't alleviate them. WHERE'S OUR FUCKING MONEY?!?"

This is pretty much flat out extortion, but it's "legal" because "laws" say it is. Isn't government wonderful?

[UnCivilServant]

New York has rules wherein if a contracted supplier gets a discount on goods being delivered, they must turn over the relevent funds to the state. In other words, New York contracted a service for a price, but if the contracted company finds a way to provide it cheaper than expected, the state steals the money they saved.

Why does anyone do business with New York? This rule is going to make suppliers avoid saving money because they won't get to keep it, so no one bidding on these contracts will incorporate the lower cost level into their future bid calcuations to wrestle the contract away from the incumbent, and the prices won't ever go down. It's lose-lose-lose.

[sarcasmic]

Sounds like a response to cronies giving falsely inflated bids and then keeping the difference.

[KPres]

What is a falsely inflated bid?

You seem to think prices are determined by cost inputs rather than competition.

[Episiarch]

No it's not. It's to prevent competition against the established contractors. It discourages a new contractor from coming in and making things cheaper to win the bid. So it's not lose-lose-lose. It's politicians win, existing crony contractors win, the taxpayers lose, competition loses.

Note who wins. It's who always wins in this system, because that's the way they've set it up. And note who always loses.

[Heroic Mulatto]

And let's not forget who NYers often mean when they talk about "contractors".

[Episiarch]

"First of all you're going to have to grease the local politicians for the sudden zoning problems that always come up. Then there's the kickbacks to the carpenters, and if you plan on using any cement in this building I'm sure the Teamsters would like to have a little chat with you, and that'll cost you. Oh, and don't forget a little something for the building inspectors. Then there's long term costs such as waste disposal. I don't know if you're familiar with who runs that business, but I assure you it's not the boy scouts."

[Kid Xenocles]

"New York has rules wherein if a contracted supplier gets a discount on goods being delivered, they must turn over the relevent funds to the state."

The feds have that too, it's called a cost contract.

[KPres]

Yeah, but in the case the government will also pay any overages, so it evens out.

[Ken Shultz]

I doubt they would do this to one of their own.

They'll take pot shots occasionally to justify their own jobs, but if there were an EU company that was as wildly successful as Google, there's no way they would do this.

I'm sure it bugs the shit out of 'em that so much of what Google does for consumers is free, too. Only the government is supposed to give things away for free.

[andarm16]

Wasn't this whole thing started by some shitty EU google wannabe complaining that google was getting all of the traffic while they weren't getting anybody. (Or at least that's part of it)

[Sevo]

"Competition Commissioner".
Somehow, I have a feeling those words do not mean what it looks like they do. In fact, if the EU wanted competition, there'd be no reason for a commissioner at all.

[UnCivilServant]

There'd also be no reason for an EU at all.

[andarm16]

You have to think about the EU bureaucracy as a jobs program for otherwise unemployable self hating Eurotrash socialists. Unfortunately for the rest of Europe, some folks decided to give those losers real power, and now the inevitable results are making themselves known.

[Francisco d Anconia]

As a libertarian I struggle with the issue of monopolies.

I put it to you that, as a businessman, competition is a struggle to put your competitors out of business and taking 100% market share. Once I've done that I can squash any upstart by taking a loss in the area/aspect of the business the upstart threatens, long enough to drive him out of business.

At this point, there is no longer any competition and I can charge whatever I want for a given product (up to the point where the customer would rather not own it) and no longer need to improve upon it. Essentially the free market stops being free due to a lack of competition.

Someone with a better business background than I, tell me where I'm wrong?

All I can come up with is that monopolies drive innovation and producers develop entirely new/better ways to accomplish a given task that the monopoly is unable to compete with. But it seems to me that would happen very infrequently.

[UnCivilServant]

Andrew Carnegie once quashed an innovative compeditor with malicious rumors about their process, drove away their customers, then bought out the process (it saved a costly reheating cycle). The rumors of poor quality steel vanished once it was in carnegie's plants.

A monopoly can still produce serious barriers to entry for innovators, without even resorting to cronyism.

[Francisco d Anconia]

So are monopolies the exception to the rule?

[Sevo]

UnCivilServant|12.20.13 @ 12:09PM|#
"Andrew Carnegie once quashed an innovative compeditor with malicious rumors about their process, drove away their customers, then bought out the process"

Could you cite that, please?

[UnCivilServant]

Give me some time to dig up the citable source.

[Sevo]

No problem, but I would like to see it.
"Meet You in Hell" was meant to be a damning description of him, but the author didn't mention what you're referring to.

[2ndClassProle]

If it is great product, what is wrong with have one business doing it.

Can you say what your business does?

[sarcasmic]

Knocking out the competition is like a never ending game of whack-a-mole. That state where there is no competition giving you the means to totally fleece your customers can only exist when you've got force of government on your side. Otherwise there will always be competitors popping up, you will always be operating at a loss, and before long you will no longer be in business.

[Francisco d Anconia]

I'd like to believe this, but I've seen the following happen. A small airline tries to establish itself in a market dominated by United. United drops its prices in that area to near zero to kill its competitor. It can take a loss on one route and make up for it elsewhere. An upstart can't.

I'll agree that in areas with real competition, monopolies seldom develop, because it's very difficult to completely defeat your competitor. But it does happen, usually when a single competitor takes a big gamble and loses. What then? Is the answer, "Sorry, you must pay $1M an ounce for your unobtainium simply because we've won?"

[2ndClassProle]

Doesn't airlines still have competition from other modes of transportation?

[Heroic Mulatto]

Doesn't airlines still have competition from other modes of transportation?

And yet, their closest competitor is a government-run monopoly (for self-loading cargo at least).

[Francisco d Anconia]

True, it does, but the improvement process that's inherent in competition is stifled (at least within the airline industry).

I guess what you are saying is when the price is so high people would rather drive, the airline will lower it's price enough to attract would be drivers.

But in that case the price would never go as low as it would if they were competing head to head with another airline (because driving is an inherently inferior form of transport when going those distances) and there would still be little incentive to innovate.

[BakedPenguin]

This. In addition to direct competition, there are also goods & services that replace the ones the "monopolist" sells. (Economists have a term for this, but I forget it).

[UnCivilServant]

I think it's "Substitute Good"

http://en.wikipedia.org/wiki/Substitute_good

[BakedPenguin]

Yup, thanks.

[sarcasmic]

The only way I can see a monopoly existing, absent government force, is by simply producing the best goods and services at a price that no one can match. In that case everyone wins.

[Sevo]

sarcasmic|12.20.13 @ 12:15PM|#
"The only way I can see a monopoly existing, absent government force, is by simply producing the best goods and services at a price that no one can match. In that case everyone wins."

AFAIK, that's happened exactly once: Alcoa.
So the government broke it up and prices went up.

[Heroic Mulatto]

by simply producing the best ... services at a price that no one can match. In that case everyone wins.

AFAIK, that's happened exactly once: Alcoa.

And Saigon's "Two-Dollar" Judy. Let's not forget about her.

[Sevo]

Kadena had plenty of competition...

[Heroic Mulatto]

Go on...

[KPres]

Standard oil? Of course, during Standard Oil's 10-year "monopoly", they drove the price of kerosene down 300%.

[sarcasmic]

And they standardized the quality, hence the name.

[Sevo]

"Someone with a better business background than I, tell me where I'm wrong?"

It's been tried and never works that way. Suggest Shermer: "The Mind of the Market" and Liebowitz and Margolis: "Winners, Losers and Microsoft".

[Ken Shultz]

It seems to me that in the areas where Google is close to a monopoly, it's because of customer loyalty and brand awareness--not necessarily because of predatory behavior.

These are mostly areas where what Google does it does for free, too. I used to use Keyhole in commercial real estate before Google bought it and turned it into Google Maps--and back then, it wasn't free!

Making the best product on the market free, like that, isn't necessarily predatory. It's just extremely competitive. And it should be noted that Google isn't the only competitor in free maps like that. Their competitors are doing free maps, too.

And who's charging for search? It's not like Google every charged users less than Bing, Yahoo, Alta Vista, Lycos, HotBot, Dogpile, ...

[Francisco d Anconia]

And who's charging for search?

You're being charged by being required to ignore their advertisements.

[Ken Shultz]

And that constitutes a monopoly abusing its market dominance?

Ad supported, free stuff is awesome.

Hit & Run works like that.

[KPres]

"Once I've done that I can squash any upstart by taking a loss in the area/aspect of the business the upstart threatens"

How? In a modern, efficient market, if the upstart really does have a better business plan they should have no problems getting funding for a price war from investors, who you would think would be no less willing to take a temporary loss than the monopolist.

[Francisco d Anconia]

Quite simply. If I'm United airlines I can charge nothing for flights out of Colorado Springs for months and make up the difference by raising ticket prices a dollar everywhere else.

The startup out of COS cannot.

Who are these investors you speak of, willing to go to war with an industry giant, at the behest of an unproven startup?

"Hi, I'm FdA and I'm wondering if you'd like to invest in my airline that will include funding a price war with an industry leader?"

"Sure, sounds good, I'm in."

Cost of entry is too high to be profitable, so the monopoly will continue.

[Invisible Finger]

The startup does not HAVE to fly out of COS. How do you think Southwest expanded? They served markets that were underserved, they flew out of airports that were underserved, in short they did market research.

If the startup has a fetish that COS must be the city they serve, then they pretty much deserve to fail for such a shitty business plan.