Duck, Duck, Google: How the European Commission Targets Technology Firms with Charges of Anticompetitive Foreclosure and Limiting Innovation

Abstract

This thesis analyzes the three antitrust fines levied against Google by the European Commission (EC) since 2017. It is concerned with the fairness of the Google decisions, as defined by consistency with the EC’s general approach to antitrust enforcement. The Google cases involve charges of abusing a dominant market position. As such, this thesis focuses on this aspect of antitrust law, which is addressed by Article 102 of the Treaty on the Functioning of the European Union. The first aim of this thesis is to understand the EC’s general approach to Article 102’s enforcement. Article 102’s enforcement in the Google cases, technology cases, and cases involving foreign firms is then contrasted against this to evaluate consistency between cases.

Grounded theory informed the methodology of this thesis. Thus, this thesis does not start with a hypothesis that the EC has or has not treated Google unfairly. The question of fairness is addressed by analyzing all Article 102 decisions from May 2004 through December 2018. 72 EC decisions from this period were coded for descriptive characteristics. 37 of these were also thematically analyzed using open coding. Mixed methods were used to interpret the frequencies and co-occurrences of codes, including chi-square tests of the associations between descriptive characteristics.

Overall, antitrust enforcement is increasing in the EU, with complaint and independently motivated cases both rising. Cases involving technology firms have especially increased during the term of the current Competition Commissioner, Margrethe Vestager. There was a significant association between the economic sector of a firm and the year a case was decided. This led to the hypothesis that certain sectors have been targeted for expanded antitrust enforcement over time. This seems to be true of the technology sector since 2015 and the utilities sector beginning in 2007. The hypothesis that sectors have been targeted was supported by thematic analysis. During their respective periods of antitrust focus, utilities and technology firms were more likely to face charges of unique anticompetitive conducts. Technology firms were also more likely to face charges of limiting innovation, which are more difficult to disprove than other consumer harm claims. Finally, technology firms faced more independently motivated cases and saw fewer complaints against them rejected than firms in other sectors. American firms were least likely to have complaints against them rejected, implying a possible protectionist motivation on behalf of the EC.

Antitrust enforcement needs to be predictable to be effective. Otherwise, ambiguity will disincentivize investment and stymie innovation. This thesis concludes that the EC’s treatment of technology firms has been inconsistent with its general antitrust enforcement and that the fines against Google were particularly unfair. Furthermore, the expansion of Article 102 enforcement in the technology sector could at best create legal ambiguity and at worst lead to selective enforcement against foreign firms. The EU should pursue other policies to increase competition in the technology sector and protect consumers. More ex ante regulation could promote competition efficaciously and fairly.