Google and Europe should not be enemies

Europe’s latest fight against Google will surely be long, messy and kind to lawyers. But it seems unlikely to do much for competition, innovation or the consumers who benefit from both.

In an antitrust case brought on Wednesday, the European Commission alleges that Google uses its Android operating system to unfairly privilege its own products on mobile phones. The new suit, which could result in a fine of more than $7 billion, joins a pending case filed almost six years ago about Google’s dominance of the search-engine market.

Google’s mobile strategy is straightforward. It licenses its Android software to phone-makers for free. In return, those companies agree to load Google apps onto their devices. The mobile phone-makers are free to choose not to, but then their users won’t have access to some popular Google services, such as the Play store.

By and large, this arrangement works pretty well. Google gets its apps in front of users, driving traffic to its services and selling ads. Phone-makers get a stable and widely used operating system for free. And consumers have the liberty to download any of the 1.6 million apps Android offers, even if Google’s stuff comes preloaded. By one conventional measure, this is satisfying all around: Android now powers some three-quarters of European smartphones.

The main complaint of the antitrust czars is that this setup induces consumers to favor Google apps at the expense of potential competitors. As one regulator put it, Google should instead be letting users “decide for themselves which apps to load.” This would be more persuasive if customers weren’t already deciding for themselves which apps to load, and if it weren’t trivially easy to find competing products on Android devices. (Remember: Google gives this technology away for free.)

More broadly, the suit reflects a basic difference between European and American views of antitrust law. In the U.S., its main purpose is to protect consumers; in the EU, it is to protect competitors. Even under this theory, however, the EU’s lawsuit is a reach. Google’s free services power start-ups and strivers in Europe and around the world. Its eclectic research -- into drones, driverless cars, even immortality -- will surely benefit competitors yet unfounded.

And there is another way in which the EU’s investigation seems beside the point: Due to increasingly fierce competition, Google’s dominant position in online advertising is by no means secure. Microsoft’s dominance of the Internet browser market in Europe was broken not by the EU’s years-long antitrust suit, but by competitors such as Mozilla and, ahem, Google.

The behemoths of Silicon Valley aren’t saints. But they’ve worked wonders for consumers, who now enjoy services and conveniences that were unthinkable only a generation ago -- often for free. There’s no guarantee that this virtuous cycle will always remain quite so virtuous, so vigilance is always necessary. But surely regulators should wait for a problem to emerge before they start demanding a solution.

Editorial
Bloomberg