Chillin'Competition

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Archive for December 14th, 2010

Word of warning

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Today, the distance between Google and a competition law infringement has drastically narrowed down.

In a formal opinion (not a decision), the French NCA declared that Google occupies a dominant position on the search advertisement market. To tell the truth, this is far from surprising. Yet, this will certainly be bad news for Google, which has been willing to observe a low PR profile until recently.

Now, what’s more interesting is that the French NCA purports in its report to provide ex ante guidelines (“grille de lecture“, §297) on those of Google’s practices which may be deemed abusive under the competition rules. A good illustration of soft, indirect enforcement on the basis of consultative opinions.

Here are the possible abuses according to the French NCA :

  • Elevation of barriers to entry on search and search advertisement markets (through content exclusivity, technical barriers, etc.)
  • Leveraging of market position on search and search advertisement markets (through ranking manipulation, etc.)
  • Unlawful discrimination in relation to the Adwords service
  • Unbalanced revenue sharing mechanism in relation to the Adsense service

The French NCA further notes that competition law is the body of rules which should be solicited to allay concerns on those markets. In contrast, sector specific legislation is not needed.

Interestingly, the power of the French NCA to issue such opinions does not fall within the scope of the Commission’s monitoring powers under Regulation 1/2003. In other words, the Commission cannot influence the substantive conclusions of the French NCA under this procedure.

I plan to read the full opinion tomorrow. We’ll be posting on this regularly in the coming weeks.

Written by Nicolas Petit

14 December 2010 at 6:41 pm