Tag: anti-competitive practices

There has been an ongoing battle between Microsoft and Google for many years in the technology industry. Microsoft have received many fines in countless anti-trust cases, but Microsoft has now taken the upper hand in the most recent development, after filing its first official complaint with the regulators against Google. Microsoft is claiming that Google’s actions are restricting competition in the market and thereby abusing its dominant position. This complaint follows numerous complaints by small businesses. Microsoft’s Brad Smith said that they had been forced to act because of a:

“broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative”.

Google controls approximately 95% of the European search engine market and complaints have focused on actions that Google have taken to restrict competition, further its dominance in the market and thereby harm consumers. The European Commission is already investigating Google and will continue to discuss the case with all parties involved.

Microsoft takes on Google with antitrust complaint Guardian, Mark Sweney (31/3/11)
Minnow Microsoft v the Google giant BBC News Blog, Rory Cellan-Jones (31/3/11)
Adding our voice to concerns about search in Europe Microsoft Blog, Brad Smith (30/3/11)
Microsoft accuses Google of antitrust violations CNN Money, David Goldman (31/3/11)

Questions

  1. What constitutes a dominant position? In what forms can a firm abuse its dominant position?
  2. What is the purpose of anti-trust laws and competition policy?
  3. To what extent are Google’s actions against consumer’s interests?
  4. What anti-competitive practices have Google been accused of? Explain how each is against consumer’s interests and against the interests of its competitors.
  5. What are (a) the arguments for keeping interest rates at 0.5% and (b) the arguments for raising interest rates? Who wins and loses in each case?

Everyone knows about ‘Google’ – a search engine. But, if you’ve happened to google ‘Google’ recently, you’ll be aware that it is being investigated by the European Commission, following claims by other search engines that it is abusing its dominant position.

It is not against the law to have a monopoly, but anti-trust legislation does make it illegal to abuse that dominant position. Those making the complaints argue that Google manipulates its search results and puts competing services further down the page whenever you search for something. The investigation has been launched following:

“complaints by search service providers about unfavourable treatment of their services in Google’s unpaid and sponsored search results coupled with an alleged preferential placement of Google’s own services.”

Google operates two services: unpaid results and ads. The investigation will aim to see whether the method that Google uses to generate unpaid results is to the detriment of its competitors. The following articles look at this issue.

EU to launch Google search investigation Guardian, Mark Sweney (30/11/10)
EU launches antitrust probe into alleged Google abuse BBC News (30/11/10)
EU launches investigation into allegations that Google abuses its dominance of internet search Telegraph, Rupert Neate (30/11/10)
Google faces European Competition Inquiry BBC News (24/02/10)
EU launches Google investigation after complaints Reuters (30/11/10)

Questions

  1. What are the characteristics of a monopoly? Why is it argued to be against the consumer’s interest?
  2. To what extent does Google have a monopoly over internet searches?
  3. What is the purpose of the investigation into Google? If Google is found guilty of ‘abusing its dominant position’, what action could be taken?
  4. Why is competition argued to be a good thing? Could the EU’s investigation actually not be in the interests of the public?