Europe, showing no understanding of antitrust, fines Google $5B

Europe is very good at regulating.  Less so at creating.  That's why Europe has fined Google five billion dollars for allegedly monopolistic behavior related to Google's Android operating system on phones and tablet devices while failing to produce continental alternatives of its own.

European authorities fined Google a record $5.1 billion on Wednesday for abusing its power in the mobile phone market and ordered the company to alter its practices, in one of the most aggressive regulatory actions against American technology giants and one that may force lasting changes to smartphones.

The European Union's antitrust fine of 4.34 billion euros was almost double the bloc's fine against Google last year over the company's unfair favoring of its own services in internet search results.

Google was fined for favoring its own services in search results?  What order would the E.U. have search results come in?  The determination of search results is an entirely arbitrary decision.  There is no right or wrong way to do it.  How can Google be fined for returning search results for which there are no objective standards?

"Google has used Android as a vehicle to cement the dominance of its search engine," said Margrethe Vestager, Europe's antitrust chief.  "These practices have denied rivals the chance to innovate and compete on the merits.  They have denied European consumers the benefits of effective competition in the important mobile sphere."

That's not true.  Just because Google's search engine and Google's browser, Chrome, are set as the default devices on Android phones, that does not mean that users cannot download alternatives.  Within five minutes of activating a Google phone, a user is free, without charge, to download any browser of his choice.  Furthermore, a user can use any search engine he likes.  It just so happens that the overwhelming majority of the public prefers to use Google, because it gives results people find most useful.

Google said it would appeal the decision, and the case is very likely to drag on for years.  The company must deposit the fine in a holding account while the legal process unfolds.  If Google ultimately loses an appeal, the money will be distributed among the European Union's member states.

Now we get to the real motivation behind this decision.  The European internet sector is underdeveloped compared to its American counterpart.  There isn't a single European search engine that has nearly the reach of Google.  That's because the Europeans have not produced a compelling product.  Instead, the E.U. is into income redistribution – from Google to the E.U.'s welfare bureaucracies.  This is simply another way to tax anything that moves, and Google, being quite wealthy, is a big, juicy target for E.U. bureaucrats.

At the heart of the European Commission's case was the question of whether Google had abused its power by forcing handset makers like Samsung, Huawei and HTC to make its Google Search and Chrome browser the default services on Android-based devices in order to gain access to other Google apps.

No one forces phone-makers to use the Google operating system.  They have many alternatives but choose to use Google.

Google argued that the European decision was an attack on its ad-based business model.  The company said it required handset makers to use its suite of apps as a way of recouping the billions of dollars it spends to make Android.  Google could ultimately decide to charge handset makers for using Android in Europe, a policy shift that could drive up the prices of some handsets.

This is the end result of all regulation: higher prices.

I'm not a great defender of Google, a liberal company that squelches conservative views.  But I am a great defender of the free market, and Google has done nothing to merit such a huge fine, which is a stealth tax from high-tech Neanderthals who, unable to develop technology on their own, are content to steal the fruits of others' labor instead.

Ed Straker is the senior writer at

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