Saturday, August 13, 2016

(The Big Disrupt) Why antitrust cases are piling up against Google

Talk about a bad week. After being hit with $6.8 million fine by Russian antitrust authorities for pre-loading their apps on android device, Google find themselves at the center of another antitrust investigation this time in South Korea. While Google doesn't have much of a foothold in the South Korean market as they do in others, the KTFC issued a press release revealing that Google were under investigation and not much more. 

The upshot of all this is that Google is now subject to three charges from the EU commission, a antitrust investigation in South Korea, and $6.8 million lighter. Even the FTC was still sniffing around Google last may before deciding not to pursue further. South Korea and Russia aren't important markets for google but the fact that the KFTC and FAS (regulatory bodies in South Korea and Russia respectively) were and are willing to take on Google is a sign of a potentially worrying trend. 

The old debate about whether states and their sovereignty was relevant are over ian age where multinational companies (MNCs) like Google can deal directly with tax authorities and negotiate how much tax they'll pay despite years of avoiding it. However the recent spate of antitrust cases against Google and others could be a way states can extract fines and concessions out MNCs. However, the vast majority of states, particularly in Europe, are in no position to pull this off which is why the EU commission has been more assertive in enforcing anti-competition laws. Nothing shows how weak states are in the global village than Google's rivals complaining directly to EU rather than its member states. 

However, even the EU commission options are limited to concessions and fees as EU anti competition laws is nowhere near as aggressive as it is in the United States as a corporation using their dominant position in a market to stifle their rivals or new entrants could end doing jail time. Google know this and are willing to make concessions and may end up paying a fine despite being  caught out on multiple occasions for the same practice of pre installing apps in devices. 

With EU antitrust chief Margrethe Vestager under serious pressure to bring the 6 year old case against google to a close, there has been rumors in the press that Google could end up coughing up $3.4 billion which may be substantial sum you and me but is a drop in water for firm that makes over six times that much each quarter. 

In sum, Google may see a serious spike in their legal bills in the foreseeable future as the company continues to collect enemies but given the fact states are no position to take on google's dominant market position and even the EU commission has its hands tied, Google may just win the war to defend their markets. 

No comments:

Post a Comment


Related Posts Plugin for WordPress, Blogger...