Why Google (and others) might get some seriously hefty fines

Ray Walsh

Ray Walsh

July 24, 2015

It is not very often that one person strongly influences the world for the better. Margrethe Vestager, however, seems to be one of those people that can. She started her career in 1993 as Denmark’s youngest female minister, and since then has had a political career that has gained her a reputation for being Denmark’s ‘Iron Lady’.

In August of last year, she became EU competition commissioner, and since then has lodged formal complaints against a number of large corporations for anticompetitive behaviour. The list is long, and she seems to have found legitimate fault in many of them, which is making her an especially unpopular woman in certain corporate boardrooms.

Sky UK is under the magnifying glass for geo restriction of services that Margrethe finds to be anticompetitive and monopolising. However, the nature of the complaint stretches way beyond just Sky. A statement of objections was sent out to Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros for their involvement in licensing audio-visual products in such a way that they are locked into a service, that in her opinion, is breaking EU competition laws.

She has presented Google with formal charges for malpractice that if verified could land the company in 6.6 billion dollars worth of fines. She seems pretty confident that in the areas that she has highlighted, Google is indeed behaving in a way that is unfair.  True to her polite, calm, and genuine demeanor, however, she does remain open to Google disagreeing: ‘they have the right to defend themselves and say, “you are absolutely wrong,”’ she says.

When labeled anti-American for targeting big US companies, she remains firm, and one minded explaining that she has no problem with any particular corporation or their products. She simply has issues with some of their practices, which she feels they must change to come into line with regulations and laws that they are meant to be adhering to,

‘The reason I react so strongly to this is because I’m from Denmark, and in Denmark we love the U.S. I don’t have anything personally against the U.S. — on the contrary.’

So far Google has only been issued a formal complaint about its shopping-comparison services (there are more to come), and as of yet they have failed to deliver a response. Google did, however, make contact to ask for more time to consider the charges, and a date of August 17th has been agreed as a deadline.

‘I think Google is a fantastic company, and it’s fascinating, everything they’ve accomplished. But their behavior, when it comes to what we think of as abuse of a very strong and successful position — that’s where we have an issue. So I’m not at war with the company, but with the specific behavior.’

Over in Russia, however, there is some particularly strong belief that she genuinely is waging war. Her decision to target Russian gas company Gazprom, just a year after the US and Europe put sanctions on Russia has got a lot of tongues wagging.  For Margrethe, however, it is all just nonsense and rumours. The timing, as awkward as it might seem, is simply a coincidence she explains,

‘It’s the same as with the anti-American bias. I can’t compromise the enforcement of our competition legislation by using it politically. That’s why the timing of when we sent the statement of objection to Gazprom was just a matter of that’s how far we’d gotten in the process.’

If indeed Gazprom has been forcing gas prices to be higher in certain countries, in a wrongful manner, then, just like the various American companies that she has targeted, it may be in for a hefty fine.

For now nothing is definite, formal complaints need to be acknowledged and following that trials need to take place. Margrethe feels she is a force for a fairer, more competitive Europe, and there can be no doubt that she is going about it the right way.  If abuse is occurring, it is only right that companies be picked up on it. Like she points out: there are thousands of American firms doing business in Europe by the book, so there is no reason why Sky, Google, Mastercard, Apple (for tax arrangements) and General Electric, shouldn’t do the same. She’s right.

To those people that call her anti-American, I say you can’t have it both ways. Corporations love globalization when it means cheap labour or new revenue streams. They pride themselves on a worldly image that portrays them as international brands of trust. Something doesn’t add up. If you are going to be international, then you’re going to have to act internationally. It certainly does not seem right to later start throwing around allegations of political racism, when someone has the nerve to point out that you are greedily abusing the market to make sure other businesses don’t stand a chance.

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