Last week the bureau-thugs at the European Union declared war on Google. Europe can’t compete with Google so instead Brussels will sue them for being too successful. Now the U.S. government is threatening the same string of harassment, lawsuits and fines.
That’s the basis for the EU’s just-announced antitrust complaint against Google. The California-based technology giant is accused of installing into the popular Android smartphone software that favors Google features, such as Google Maps over competitor products.
“Our concern,” complains Margrethe Vestager, the EU’s antitrust chief, “is that by requiring phone makers and operators to preload a set of Google apps, Google may have cut off one of the main ways that new apps can reach customers.” That’s ridiculous because it was largely Google technology that made apps work on smart phones in the first place.
The heart of the complaint is the longstanding and controversial issue of a company “bundling” its technology products to favor a firm’s own services over those of competitors. So now the EU wants to force Google to offer its competitors’ products on the Android phone. Next thing you know, McDonald’s is going to be slapped with an antitrust complaint for not offering Wendy’s fries.
But if we cut through the EU’s 19th century antitrust mumbo jumbo, this is nothing more than a raid on Google’s profits and products and market share which is said to be too “dominant.” The same might be said of this year’s Golden State Warriors.
Well it’s true that Google’s Android technology has a commanding two-thirds market share in Europe. How did that happen? By building a better smartphone technology. And if Europeans want access to all these alternative apps, they have a simple market remedy: buy a different phone.
Is there any industry in world history that has been more hypercompetitive than high tech? How can Google be anti-consumer when prices for Internet services and products keep falling year after year? The EU says consumers need “more choices.” There are many competitors to the Android technology — and those alternatives don’t favor Google products. Why should Google be punished for having the most popular product? Once ATT and Microsoft were thought to be monopolies and it was market forces that evaporated their lead.
The spurious complaint could cost Google tens of millions of legal costs to defend itself and billions of dollars of lost sales — but that, of course, is exactly the point. The Eurozone is using trumped up antitrust charges to improve the competitiveness of their own second-rate smartphone and other technology products. Similar claims have been brought against Facebook, Apple and Microsoft. The U.S. government should be vigorously defending American companies and jobs against such hostile litigation and regulatory barriers to trade.
Here’s what’s maddening. The eggheads in Washington are piling on. The Federal Trade Commission lawyers are launching their own investigation into whether Google violated restraint of trade laws. This only validates predatory foreign claims against American companies.
Can anyone imagine the Germans, the Japanese, the Russians or the Chinese suing one of their own home-grown companies for being TOO successful? Never.
The Obama administration seems to be intentionally trying to export tech jobs out of America. The antitrust cops under Obama have been hyperactive in blocking multi-billion dollar mergers of American companies — from airlines to tech companies to retailers to energy firms — supposedly to protect consumers.
Earlier this month the FTC blocked an energy merger involved multi-billion dollar Halliburton and Baker Hughes and the Pfizer-Allergan marriage. It is blocking the Staples and Office Depot merger, which Staples argues persuasively is necessary because all of the competition now is with on line retailers like Amazon. All told 150 mergers have been blocked by the feds under President Obama, according to CNN-Money. This doesn’t protect consumers, it injures U.S. competitiveness. Mergers lead to economies in production costs and are more likely to lower than raise prices.
It’s clear that the Europeans are trying to bring down an American tech giant to allow their own feeble alternatives to compete. This is just a disguised form of Euro-protectionism. But Washington’s case against Google is much worse: it is unpatriotic and damaging to the U.S. economy.
Things may get worse not better next year. Hillary Clinton has promised that if she becomes president she would “beef up the antitrust enforcement arms of the Department of Justice and the Federal Trade Commission,” and hire “aggressive regulators” in order to “better understand the link between market consolidation and stagnating incomes.” She’s coming after those Ferraris and millionaire secretaries at Google and Facebook.
Then these same liberal politicians wonder why the economy is growing at a measly 1.5 percent and why businesses aren’t investing.
• Stephen Moore is an economics consultant at Freedom Works.