The Digital Markets Act (DMA) is being hailed as the silver bullet to halt Europe’s digital competition woes. Yet we have to be honest with ourselves about the unequal struggle between regulators and Big Tech. If we aren’t, the digital giants will continue to abuse their immense market power and political influence to avoid being held to account.
Over the past decade, the European Union has pursued three cases against Google and levied €8.25bn in fines. The end result? Google’s market dominance in search, advertising and other online businesses has grown. In fact, Google’s share price and revenue are both up more than 50 percent since 2017, when the EU first fined it €2.42bn for abusive behaviour.
For companies like mine, the price comparison shopping business Kelkoo Group, this outcome is commercially crippling. Our market presence has been eroded by Google as we waited years - and are still waiting - for someone to step in with a meaningful solution.
Google was allowed to duck penalties not only through armies of lawyers and lobbyists but because it had technical expertise that regulators could only dream of. It would claim to have done nothing wrong, then muddy the water with data and statistics which hid the problem. When finally brought to book by regulators and fined billions, Google offered up ‘remedies’ that worsened the abuse. The prime example is Google’s self-created ‘shopping remedy’, which not only rips even more money out of competitors’ pockets and into its own, it deprives consumers of any meaningful change in the services available to them.
“While Google runs rings around our regulators, Europe loses out. Consumers will continue to pay more for online shopping because they are denied the best deals and the tools to find them”
Google’s approach makes brutal business sense. €8.25bn in fines is peanuts compared to a third quarter 2020 revenue of over €38bn. Meanwhile, during each month of its new ‘remedy’ it gets richer and weakens the rest of us. If this goes on much longer, any remaining competitors will be swept aside, before regulators come to terms with their shortcomings.
The clock is ticking for European regulators to improve and update the digital skills of their teams. They already have good, committed people but they can be buried under avalanches of irrelevant data or blind-sided by explanations that a digital-native would see right through. Regulatory systems from the 1990s simply cannot keep up with the speed of digital business in the 2020s. I’ve seen regulators willingly sit back for six months to see how a ‘remedy’ will play out while I and everyone else in my sector could tell in six minutes that it would benefit no one but Google.
While Google runs rings around our regulators, Europe loses out. Consumers will continue to pay more for online shopping because they are denied the best deals and the tools to find them. Businesses will pay more to appear on Google’s shopping search results. Governments will lose billions more in tax.
A few years ago, I was hopeful that the steps taken by Margrethe Vestager and the EU would level the online playing field. One of her first big cases addressed Google’s targeting of Kelkoo and other online shopping sites. But for the reasons listed above, the fines didn’t change Google’s anticompetitive behaviour and the remedies which Google crafted for themselves were worse than insufficient.
Today my hope, and that of the other victims of Google’s unfair business practices, has shifted to the US. In recent months, dozens of attorneys general across the country, both Republican and Democratic, have signalled their commitment to pursuing antitrust litigation against Google. The Department of Justice has already brought one case, and more are expected. Even so, this kind of intervention will only achieve concrete results if the regulators are equipped to go head-to-head with these digital giants.
The good news is that some European regulators are already taking clear steps to improve their digital capabilities after a series of reports and calls for specific capabilities to tackle Big Tech issues. L’Autorité de la Concurrence now has a Digital Economy Unit to optimise enforcement by combining the expertise of engineers, lawyers, economists and data scientists. Similarly, the Competition and Markets Authority, Ofcom and the Information Commissioner’s Office in the UK have combined their collective experience to form a Digital Markets Taskforce focused on unlocking digital competition post-Brexit.
“With Parliament, Council and Commission working together, Europe can achieve its digital ambitions and hold Big Tech to account”
It will require not just regulatory effort but political will to hold the likes of Google to account. In the US things started to change when Congress dragged Silicon Valley CEOs in front of it. For the European Parliament the parallel is clear: public and private pressure must be brought to bear if the DMA is to deliver more than DG COMP has so far managed to achieve with large fines but limited behavioural changes and market impact.
2021 will be an incredibly important year for all Europeans, and I do mean all of us, because that is exactly how omnipresent the internet, Big Tech and above all Google have now become. With Parliament, Council and Commission working together, Europe can achieve its digital ambitions and hold Big Tech to account. For the DMA and the current DG COMP cases to succeed, we must make every effort to learn from what works in the US and what hasn’t worked here.