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Google Shopping Decision- First Urgent Comments

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google-shopping

 

Today is an important day for EU competition law. For various reasons I have not commented publicly on Google’s cases for over two years now (for our previous extensive coverage, see here) The most recent of those reasons is that whereas I used to be a neutral observer (like Pablo still is) I have recently started advising Google in some competition matters, although as of today not directly on the Shopping case.

Today seems like an appropriate day to break that silence. Pablo and I were both invited by CCIA to participate in a press briefing call in which we explained the case and gave our views about it to a bunch of journalists. In anticipation of that call I hastily drafted the urgency thoughts that are the basis of this post. By the way, Pablo and I will again be speaking about this case on 11 July at this forthcoming Queen Mary University of London event, and, for the sake of neutrality, he will be the one covering the case here and elsewhere afterwards.

DISCLAIMER: Before you continue reading, please bear in mind that, even if I’m not working on this case, and even if my views have not changed, I am certainly not neutral (as I once was). So please take what I say with as many pinches of salt you wish and judge it only by its merits. To be sure, my preliminary opinions might very well not coincide with Google’s, as it may have other views and certainly has other lawyers who will surely have more views.

What the case is about

The case is not about manipulation or skewing of organic search results, as some have wrongly stated. It is about the display of product results and product ads. And it is only about the so-called comparison shopping market, of which most EU consumers had probably never heard about. The very assumption that such a market exists is far from straightforward, but there are other more profound and far-reaching concerns that we will try to very quickly outline in this post.

Google provides a free search service to consumers and it monetizes this service via advertisements. Today’s decision states that Google cannot favor its own product ads –the very same ones that make its services possible- over those of competitors. This is remarkable and wholly unprecedented.

To illustrate what this means, a useful analogy may be to think about a newspaper (a business models that is also funded via ads). What the Commission is doing is the equivalent of asking this newspaper to carry/publish the advertising service of competing newspapers and in equal conditions whatever that means (same placement, length or size, possibly even almost for free) and without getting the revenue. Another valid analogy is that of a supermarket obliged not to favor its own products, even if it is not the only supermarket around. The implications for vertically integrated companies in virtually every industry are potentially enormous.

Searching for the harm

Searching for the harm to competition and consumers is particularly challenging here. The Commission stated today that Google deprives consumers of choice to buy and compare prices online. That is the very fundamental idea at the foundation of the case. In my view, however, consumers could hardly have more choice when it comes to comparing prices and buying online. Whatever Google does cannot affect that. If you now want to buy any product you can search in Google, but you can also do so via apps, all merchant sites, platforms like Amazon, ebay, visit directly price comparison websites, outlets like Zalando, etc. Consumers have choice within Google and outside of Google. Even if Google price comparison results are more visible on a Google site, there is nothing precluding consumers from visiting any other site.

Tellingly, the Commission is indeed not claiming that there is direct harm to consumers but only assuming that somehow consumers will suffer from a decrease of traffic of price comparison websites even if the latter are not foreclosed. The Commission is thus equating any sort of alleged competitive advantage or disadvantage with anticompetitive effects; in my view, this is a very loose notion of consumer harm and a very long shot.

The facts and the evidence

In order to build this case the Commission focuses on a very small number of shopping comparison sites (aggregators) and concludes that they constitute a relevant market of their own. In my personal opinion this is quite counterintuitive and problematic. First, because it ignores hundreds of other aggregators. Second, because it also ignores that consumers do not only buy online through price comparison sites; indeed, the decision remarkably ignores the role of merchant platforms that also enable consumers to compare prices and buy. The players active in online sales, be it Google, Amazon, ebay, Zalando, any store or any individual merchant or manufacturer all face fierce competition. Third, the decision ignores that even if Google’s results enjoyed better display, consumers are not locked in, they can and do visit other websites other than Google before buying on the internet. The Commission says there is a link between visibility in Google and number of clicks received, but, again, this ignores the fact that consumers do not just buy online via Google. Even if Google’s results were more visible, there is nothing precluding consumers from visiting another site. There are certainly no technical or economic barriers for that, and this is what matters according to the most recent case law Third, and importantly, the Commission’s concern in this case is that some price comparison websites have lost traffic. In that case the Commission would have to prove with convincing evidence that this loss of traffic is due to Google’s display of product ads. This is certainly not easy, as there are many other more plausible, and indeed more likely, explanations (like the fact that consumers now prefer to buy directly on the merchants’ sites, in apps or in other platforms). The UK High Court and Justice Roth understood this perfectly in the Streetmaps Judgment with regard to a very similar theory of harm (see here).

The Law

But what I mostly care about is the law. Commissioner Vestager –whom you know is well-liked by this blog- explained today that DG Comp has reviewed 5.2 Terabytes of information. I do not doubt for a second that the smart people in the case team dealing with the case worked hard and thoroughly, but 5.2 Terabytes of information is meaningless if the law is then discussed quickly in just a few paragraphs and if the legal test is wrong.

From a legal standpoint, this case is unprecedented; there has never been a case like this, in Europe or anywhere else, and the implications are incredibly far-reaching. This is perhaps why for many years the Commission tried to avoid an infringement decision and rather preferred to settle with Google.

The first reason why the case is unprecedented is because it establishes the principle that a company may not favor its own services over those of competitors. Companies everywhere –dominant or not- logically favor their own services when they buy and sell goods or services even if this does not result in foreclosure. Vertical integration is everywhere, and it is in the very nature of multi-sided platforms.  Hampering their ability to promote their services (in spite of no evidence of rival foreclosure) implies not allowing them to decide how to best provide their services. Legally, a firm can only be obliged to deal with or assist competitors when this is indispensable for competition to exist in a different market. This is the test that has consistently been used in EU Law. But the Commission considers this case law not to be applicable and wants to extend the scope of the law. The implications are incredibly far-reaching (actually, I think I said that already…)

Indeed, the Press Release suggests that the Commission does not argue indispensability, but merely that Google grants itself a convenient advantage. So the Commission does not label Google as an essential facility (because that would be pretty hard to do given the high legal standard), but it does treat Google as if it were, thus bypassing that legal standard. I fail to see how what is the logic or consistency of this reasoning against the backdrop of the relevant case law. In my view, and not having yet read the decision, this suggests a possible bypassing of established legal rules and standards with ad-hoc case specific theories and remedies, thereby risking turning the prohibition of abuses of dominance into the realm of the arbitrary.

The second reason why the case is unprecedented is because the alleged abuse is at its core a product improvement. The combination of specialized and general results (what Google is accused of) is something that is also done by other search engines, including Microsoft’s Bing and Yahoo! Everyone does it because it is best for users to get a direct response (if you search for an address, you get a map; if you search for a product, you are taken directly to the product, not to another intermediary). A product improvement that disadvantages rivals is not anticompetitive. Or at the very least one would have to trade off pro and anticompetitive effects, which is something that I very much doubt the Commission has done, essentially because no one knows how to do it. And in the face of doubt a sanction is not appropriate. This wall very well explained in Streetmaps and it was understood by all other competition authorities who have had the chance to examine these practices.

The remedy

The Fine: The Commission has imposed today the largest fine ever imposed on a single company doubling the previous record. What is remarkable is that this fine has been imposed after years of negotiating commitments (which are only possible in cases where “the Commission does not intend to impose a fine”), in relation to conduct that had never been found unlawful, that is actually considered lawful in other jurisdictions, that no lawyer would have anticipated to be unlawful and that takes place in a relatively small and competitive market. In previous cases, the Commission declined to impose a fine when its case was novel and had no precedents. This is actually the first case in which conduct that was found suitable for a commitment decision receives a fine (see the Motorola/Samsung and Mastercard/Visa precedents).

Future compliance: I do not know how this is framed in the decision. The Commission has stated today that it has not given any precise indications and that it is up to Google to come up with a solution that does not have the same effect.

In competition cases remedies need to fit the Commission’s theory of harm. In this case, however, there is no clear remedy fitting the unprecedented theory set out in the decision. Having ordered a remedy in the decision would have probably exposed the flaws in its reasoning. Possibly to avoid that risk the Commission has stated that it is up to Google to craft a remedy that is neutral –whatever that means- and that removes the problem. I preliminarily see two problems here:

  • The first is, how can Google remove effects that it arguably did not cause in the first place? If Google is right and the loss of traffic on the part of the companies considered by the Commission is attributable to something other than Google’s conduct, how can Google fix that? And how can the Commissioner assess whether the remedy is effective? It would seem as if the Commission were requiring Google to artificially maximize the traffic received by some specific category of its rivals (price aggregators) which certainly would not be neutral.
  • The second problem is wider. The Commission says whatever Google does must be neutral, but it does not define what neutral means. This undefined notion is particularly problematic when applied to a business which by definition has to rank search results.

Admittedly, Google could simply decide to shut down the service and not offer product results in Europe. This would be perfectly plausible and legal, and is actually what Google did with Google News in Spain back in the day, only to show that this benefited no one.

Effect on other Google products.

The Commission has stated that this decision is now a precedent and the starting point to look at other Google’s services. Firstly, this implicitly means that there was no earlier precedent and thus confirms the novel nature of the case.  Secondly, the Commission could have run a case comprising all verticals, but it didn’t, and it must be because it thought this was the easiest to run for some reason. That may have to do with market definition, or because evidence in other verticals did not match the theory. If the Commission decided not to run those cases, it must be for a reason. My personal view is that this technique of picking the preferred sample to then extrapolate results would not be an acceptable shortcut.

Conclusion. In order to make this case possible the Commission first had to change the stance it held for years during the commitment negotiations and now has had to craft a new legal theory without clear legal foundations, prohibit a conduct validated in every other jurisdiction, assume dominance against the indications of the case law, define a relevant market ignoring the main actors active in online shopping, ignore the fact that consumers are not locked-in Google, assume that the loss of traffic of some specific companies is due to Google not considering other plausible scenarios and avoid spelling out a remedy. In my non-neutral view, it is a remarkable decision indeed.

Written by Alfonso Lamadrid

27 June 2017 at 8:18 pm

Posted in Uncategorized

26 Responses

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  1. Isn’t the theory of harm here simply software bundling, as per Microsoft (IE and WMP)? You have:

    1) Dominant platform
    2) Downstream competition
    3) Vertical integration by the dominant platform posing a “conflict of interest” and calls for neutrality
    4) No prevention of unbundling, but intra-platform switching costs and/or default-bias.

    Put simply, it is a tying case. Though seemingly also an essential facilities case, this is a problem with harm categorisation in EU law where there are varying legal standards for theories of harm which essentially constitute the same thing (hence the superficial appeal of labelling the Shopping case a “quasi essential facilities” case); it is not necessarily a problem with the Commission’s theory of harm in this case.

    The real question should be: is there any reason why Google Shopping performs better as the top result (where the best comparison shopping option presumably should be) than Foundem or Kelkoo? I expect that there is: Google Shopping relies on data input directly by merchants and which is updated on a daily basis. What transaction costs would be incurred if Google had to obtain Foundem or Kelkoo’s data in order to give them prominent placement? Would their data be good enough (i.e. would consumers be harmed/are they receiving the best results already)? If so, what does this tell us about merger policy towards Google buying Kelkoo or Foundem? One might even presume that, if Kelkoo or Foundem had superior product data to Google, they would have been scooped up years ago..

    This harks back to the age-old criticism that EU law pays insufficient attention to efficiencies – a criticism levelled at the WMP case. We know from legal and economic literature, especially from the early to mid 2000s, that software bundling can give rise to incredible efficiencies that cannot be achieved through firm-to-form contracting. Google Shopping, Maps etc. can clearly integrate with with Google Search better than downstream rivals’ offerings can. We know this in the latter case from the Streetmap case in the UK. Given this, it becomes quite clear to me that the Shopping decision is about protecting these rivals at the expense of consumer welfare.

    Patrick Todd

    27 June 2017 at 8:56 pm

  2. I respectfully and strongly disagree, especially on the two legal points. There is nothing extraordinary or unprecedented about the case to my mind:

    – “it establishes the principle that a company may not favor its own services over those of competitors.” You conveniently omit the fact that Google was not just any company but a dominant company (that can also be debated but this is not the issue here). Now, such companies are under under a clear obligation since 1958 (see Article 86 (c) of the EC Treaty) to observe the principle of equal treatment. The breach of this principle is expressly mentioned in the press release.

    – “the alleged abuse is at its core a product improvement. The combination of specialized and general results…” The Commission had no issue with the combination of spec and gen results in itself, but rather in the specific way Google re-ordered such results and gave prominent placement to its own stuff, while demoting the placement of others. This was the core of the infringement and this has nothing to do with product improvement…

    Asimo

    27 June 2017 at 9:02 pm

    • Hi Asimo, that’s what this blog is for so thanks for the thoughts, which are, as always, very welcome and help advance the discussion.

      Leaving aside the issue of whether there is a market for product comparison sites, and focusing only on the law: (I) I certainly did not intend to omit the question of dominance but I am rather assuming it (even if it is disputed in the case) given that we are talking about Art. 102; (II) I do not know of a single case where a company was sanctioned under letter c) of Art. 86/82/102 for favouring its services over others in the absence of foreclosure or indispensability, which is why I think this is extraordinary and unprecedented. If you can identify any of those I’ll be happy to discuss!

      Alfonso Lamadrid

      27 June 2017 at 9:57 pm

      • Thanks! As to (II) the Commission’s press release talks extensively foreclosure, when it states that “traffic to rival comparison shopping services on the other hand dropped significantly.” (in the effects part). So, yes, foreclosure is very much there!

        And foreclosure (or, in the words of the Treaty: “competitive disadvantage”) was there also in old price discrimination cases, where the the theory of harm was very similar: a dominant player protecting its position in a related (non-dominant) market by favouring its own services either by tying it to the dominant service or by charging discriminatively high prices for the dominant service. See Microsoft or margin squeeze cases such as Deutsche Telekom (where the problem was that the wholesale segment was favouring its own retail services vs the retail services of competitors by charging different prices). For me, this is a direct line of case law leading up to today’s decision.

        Asimo

        27 June 2017 at 11:06 pm

    • Hi Asimo,

      Great to see you back! Your comment has a feeling of deja vu. We were having exactly the same discussion a couple of years ago when the SO came out. As much as myself back then, my guess is that Alfonso uses the word foreclosure in the technical sense, as defined by the EU courts in Delimitis, Tetra Laval and GE/Honeywell, and by the Commission in the Guidance Paper and the Non-Horizontal Merger Guidelines. Not every disadvantage amounts to foreclosure in that narrow, technical sense.

      Pablo Ibanez Colomo

      28 June 2017 at 9:55 am

      • Hmmmm…lets see the Guidance Paper’s definition (as this was the first result, when I googled the term “foreclosure in a technical sense” – just joking!:) – it is in fact a case book on English land law!)…so here it is, para 19: “In this document the term ‘anti-competitive foreclosure’ is used to describe a situation where effective access of actual or potential competitors to supplies or markets is hampered or eliminated as a result of the conduct of the dominant undertaking whereby the dominant undertaking is likely to be in a position to profitably increase prices to the detriment of consumers.”

        Now, it appears to be easy to apply this to this case as follows: effective access of Google Shopping competitors (such as Amazon, etc) to the comparison shopping market is hampered as a result of Google demoting such competitors in the search results, whereby Google is likely in a position to make gains in traffic (as they say, “data is the new currency”) to the detriment of consumers. Voilá!:)

        Asimo

        28 June 2017 at 4:03 pm

      • Thanks so much! The question here is not whether you can paraphrase the Guidance (I can do that too), but whether the decision is based on the notion of anticompetitive foreclosure enshrined in para 19. We will not be able to tell until we see the decision, but the press release simply points to a decrease in traffic, which seems to fall short in this regard.

        This said, your suggestion that Google has the ability to foreclose Amazon from the relevant market is, I think, the boldest statement I have read in the context of this case 🙂 . Perhaps the decision will be as audacious as you are!

        Pablo Ibanez Colomo

        28 June 2017 at 4:48 pm

  3. At the latest after this decision European politicians should stop wondering why Europe has no real champions in the digital economy. If a successful company is punished without good reason – and without being able to clearly foresee such a sanction (what about lege certa?) -, then I’m rather successful somewhere else. Unfortunately everything that I read and see of EU officials today points in the direction of even more intervention. No good sign for the european economy.

    Adrian Raass

    28 June 2017 at 8:15 am

  4. […] —- Lesen Sie auch diesen kritischen Kommentar im Blog Chilling’Competition: Google Shopping Decision- First Urgent Comments […]

  5. Can you elaborate more on the “supermarket” analogy? Why it is not the only supermarket around?

    Other supermarkets clearly have no clients at all (whatever the reasons: habits, brand recognition or lock-in effects), so producers really can’t place their products there.

    Anyway, I wonder how would we look back at this issues 30 years from now.

    Daddy, why were you so liberal towards those monopolies in the early days? Was it that you were so grateful for the services they provided? Or were you secretly scared that they would get offended and stop innovating?

    Marcin

    28 June 2017 at 8:56 am

  6. Not bad, given that you have not seen the decision…
    Anyway, if the idea is to advise Google also on Shopping, then well done!

    Margaret

    28 June 2017 at 9:19 am

    • When someone takes the risk of setting out a substantiated reasoning in the open and exposing it to criticism and to anonymous comments, this is something I appreciate whether I agree or not. Plus in this case the disclosure was exemplary. Playing a man and not the ball is not nice and is often a sign of weakness..

      DanishLawyer

      28 June 2017 at 10:26 am

  7. Hi there. Could somebody please guide me as to where I find in the Commission’s Guidance Paper of 2009 the relevant passage(s) which presumably the Commission applied in this case to consider the Google case an Article 102 priority? Thank you.

    Makis

    28 June 2017 at 9:22 am

  8. The alleged abuse is the result of Google promoting his own product and demoting rivals’. Your claim that this is an unprecedented and ill-thought-through infringement decision is mainly, as I understand your position, motivated with respect to the former. In this regards, what really strikes me is how Google failed to mitigate its liability by, merely, adopting a Microsoft-like remedy. Google could have just invited users to authorize the attribution of prominence to its own product the first time around. Had they done so, the Commission would not have had a case on that element of the allegation. I suspect something really wrong went wrong during the phase of product development: either the compliance lawyers didn’t realize there was an easy way to mitigate a huge liability risk; or they did but those in charge of product development rejected the advice on the basis that it would have added one hop to the consumer journey, even if only for that one time (I guess adding hops is anathema to computer engineers obsessed with making the user experience as seamless as possible). So, it’s a bit hard to sympathize with your outrage on that specific aspect of the case frankly.

    Siciliani Paolo

    28 June 2017 at 10:42 am

  9. Happily, thanks to the “Google Appeal” app the Decision will not spoil the lawyers’ summer 🙂

    Tatiana

    28 June 2017 at 10:56 am

  10. Perhaps would it be useful to actually read the decision before criticising its legal reasoning?

    Regarding the alleged extraordinary nature of the – unread – legal reasoning: is it not the whole point of 102 TFEU to avoid that a dominant undertaking favours its own products, whatever the means used?

    Even assuming that the – unread – legal reasoning is indeed extraordinary, it does not mean that it is “far-reaching” as repeatedly stated: you must first check whether it is applicable in other contexts, ie whether it is a relevant precedent or can be distinguished.

    Allsangen

    28 June 2017 at 12:07 pm

  11. Thank you for this great contribution, as always, to better understand this unprecedented Decision.
    I have not seen the decision, so I apologise if I am mistaken. But it seems to me that there is another crucial aspect where this Decision is unprecedented: it seems to find a dominant position on a gratuitous market (general internet search). But, as I’ve argued in published research (http://www.concurrences.com/fr/revue/issues/no-1-2015/articles/Ceci-n-est-pas-un-marche-Gratuity), there is no case-law nor legal support for the existence of a gratuitous market and the case-law tells us that there is no such thing as system markets (each side of a multilateral platform must be defined as a separate relevant market). By analogy, the Commission is now saying that if a radio broadcaster has 50% of listeners in a given geographic market, it can assume it has a dominant position on a market for radio listeners, and impose obligations for it on the advertising market, where it does not have a dominant position. The issues you raised are very important. But if we accept the existence of gratuitous markets in this case, this will have far reaching consequences in the future, and not just for online services.

    Miguel Sousa Ferro

    28 June 2017 at 12:45 pm

    • “Google’s flagship product is the Google search engine, which provides search results to consumers, who pay for the service with their data.”

      JLSa

      28 June 2017 at 12:56 pm

  12. Alfonso is a friend but I have to take issue with this.

    First my declaration: I have advised a number of companies who have filed complaints against Google.
    it was tempting to do a line-by-line rebuttal but in the interests of space and time I will focus on just a few of the more sweeping assertions.

    I would however counsel against anyone making categoric statements about a decision, rumoured to be a few hundred pages, that they have not read.

    Let’s take a few examples, my Nine Riders:

    1. That reminding a company of its obligation not to discriminate “is remarkable and wholly unprecedented”. That obligation is in the text of Article 102(c). It has found application in a number of cases such as Coca Cola and HIlti. Though even if the assertion were true that would not be fatal. Establishing a “precedent” is not the same as making an error – the clue is in the word. And I believe that when the Commissioner said this was a “precedent for Google” what she meant was to underline that the company needs to apply the lessons across its business, rather than making a technical point that the case is “novel”.

    2. Analogies with newspapers and supermarkets. These are mostly straw men, setting up an argument that has not been made in order to demolish it. Though Coca Cola shows that a company can indeed, when its business model involves the display of numerous competing products, be obliged to treat them fairly. All the Commission is insisting upon is that all results be selected on the same relevance criteria – which of course is what Google always claimed it did anyway.

    3. That consumers are not harmed. Here I happily defer to the pan European consumer body BEUC which filed its first ever formal antitrust complaint in this case. That could have merited a mention for the benefit of readers not versed in all the detail.

    4. That the Commission “ignores” competitive restraints. With respect that does a disservice to the case team. They spent a lot of time looking at all aspects of the market, and came to their reasoned conclusion. The rest of the argument seems to be merely a recasting of Google’s line that “competition is a click away”. However the Commission may have observed the reality of sustained 95% market shares, rather than what users could theoretically do but for some strange reason choose not to do.

    5. That the decision discourages innovation. The assertion is that Google putting its own products above those from third parties that its own algorithm would have assessed as more relevant to users, is somehow an “improvement”. The writer is confusing the benefits of having access to a range of services with the question of who provides those services.

    6. It is suggested that the fine is extraordinary because it is imposed after years of abuse, a part of which was taken up with an unsuccessful attempt to negotiate commitments. The commitment discussions occupied a relatively small slice of the duration of this case, which was punctuated with warnings to Google that it was dominant and abusing. Moreover all 3 sets of commitments were rejected as inadequate, and in the meantime the harmful behaviour continued; indeed it was ramped up. Where a company has been given an opportunity to settle without punishment and spurns that opportunity, is the suggestion that it should thereafter be immune from sanction?

    7. Perhaps the most surprising claim, in relation to the behaviour, “that no lawyer would have anticipated [it] to be unlawful”. That must have come as a surprise to the lawyers in the Legal Service and those advising the thirty or more companies understood to have filed complaints or been admitted as interested parties. It certainly surprised me. I suspect that if you did a poll of EU antitrust lawyers, the argument that Google is not dominant and has not been abusing might be seen to be a minority taste.

    8. The criticism that Google doesn’t know how to comply and will be asked to “fix” harm that it did not cause. I simply don’t understand this one. It has been ordered to cease and desist from its discriminatory behaviour. As in previous cases, the Commission has left Google the option to choose the solution that is least onerous, which one might have thought a Google supporter would welcome. Is the argument that the Commission should have come up with a prescriptive remedy?

    9. That Google’s conduct has been “validated in every other jurisdiction”. That is quite a claim. Perhaps other readers will want to pile in with exceptions.

    I could go on, but that is probably enough for now.

    Stephen Kinsella

    29 June 2017 at 5:37 pm

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  14. I do not know the details (I am not alone, nobody who is expressing views here appears to have read the decision either), but your reflections on remedies gloss over the fact that it is settled case law that the Commission is legally prevented to impose a specific remedy when there is more than one way to terminate an infringement (T-24/90, 52-53; T-410/08 R, 53) (I do not know if this is the case here). If the decision was too specific, Google could claim that it was unlawful for that very reason.
    Remedies are not about the result (or the “removal of effects”), but about the conduct identified. In general, if an addressee of a decision is convinced that the two are not linked, it can just change its conduct asap in order to be able to demonstrate the absence of any link in the hope that this may increase its chances of winning the case in Court.
    Remember Microsoft. Microsoft denied any link between conduct and changes in the market and took, for the first abuse, several years to change its conduct after the decision. All its arguments about the absence of link and that “the decision is not clear” led nowhere. Maybe the changes were ineffective (this could have potentially questioned the existence of the abuse in the first place), but it was too late, the cases were already decided in Court.

    joan

    6 July 2017 at 8:29 am

  15. The recent Wall Street Journal about Google’s support of academic articles is a timely reminder of the importance of commentators and responders clearly identifying whether they have a client interest, and could usefully be made a rule of this blog – or perhaps even a topic for a blog of its own?

    Stephen Kinsella

    12 July 2017 at 6:09 pm

  16. Thanks, Stephen. As I told you I appreciate your last comment -as wrong as it is 😉 – as it balanced the blog offering two non neutral views on the case to readers. I This one I understand a bit less, but it certainly is timely and may trigger something useful.

    A post on the subject in general could be a good idea, and I might do it when the time allows. Google and Dan Crane have nevertheless already written interesting posts about this; see here:https://www.blog.google/topics/public-policy/responding-campaign-accountability-report-academic-research/ and here: https://profdancrane.com/2017/07/12/setting-the-record-straight-on-wsj-google-paying-professors-article/amp/

    For the time being, however, a few clarifications regarding this blog and its two authors:

    -We have never accepted money or any other form of support, as consideration for publishing a blog post. Some companies have asked (never Google) and we have always refused. I would have thought this was obvious, but happy to disclose that we have never failed to disclose; we are proud of that.

    – Unlike what happens in oral or classical written formats we expose our views to anyone who may wish to comment, also anonymously, and criticise our ideas or us. We always play the ball and never the man and we are proud of that.

    – We have featured guest posts by people with diverse views and, to the extent we are aware, every time they have disclosed their affiliations (like you correctly did in this guest post: https://chillingcompetition.com/2016/11/14/the-innovation-offence-by-stephen-kinsella/); we are proud of that too. The rule is there.

    – Whenever I have written about cases in which I had a direct interest I have always disclosed it, and not discreetly. I did it with Microsoft/Skype, Pay TV, some State aid cases and I did it also the other day regarding Google (you can compare the visibility, display and level of detail of my disclosure compared to any other; I also said I had not worked on the Shopping case, similarly to how you correctly explained in your post you were not assuring Microsoft on the LinkedIn deal).

    – I have nothing against people who may accept funding for research (there may be valid reasons to do so), but I have been “brought up” in the legal world by two partners who are also academics (real ones, with PhDs, etc) and never in their lives have they published any sponsored research. We also have never asked for or been behind any sponsored research. I personally think it’s often counterproductive.

    – I agree that disclosure is always necessary and an ethical obligation. If the disclosure is correct I see no ethical issue.

    – I have the same views regardless of whether research is sponsored by Google, by any other of the many companies and associations that do the same (including (Microsoft, iComp, FairSearch or its members, who also frequently play that game).

    – I would underline that when people disagree with one’s views that is not always because they are being paid. A great example: the day the Shopping decision was adopted my former co-blogger, Nicolas Petit, wrote something and was immediately accused of being paid by Google (see here:https://mobile.twitter.com/CompetitionProf/status/879929235737018369 ), when in reality he has disclosed having published research funded by the complainants! That was a good one. That sort of behaviour, by the way, reassures me that I’m on the good side of things.

    THAT SAID, and even if I agree with the idea that there is too much sponsored research (on all sides), what really bothers me is the growing tendency to play the man and not the ball and to cast doubts on all research and opinions, perhaps as part of an strategy to discredit or silence. That really pisses me off (excuse my French). And it bothers me because of people like Pablo, who have never -and I bet will never- accept to publish any funded research. These are people who are only concerned about ideas, are valued because of their ideas and make every effort to be independent. General statements and innuendo are unfair (and, if you ask me, as unethical as no disclosures). A recent example: last month Pablo was asked to share his views on geo-blocking and copyright reform and actually presented them at your firm; his only condition to do so was to not receive funding or any other form of support; you can easily verify that. I could cite other examples, but it again bothers me to have to do this for no reason.

    And I stop now because my pizza is getting cold and my beer warm; you owe me one!

    Alfonso Lamadrid

    12 July 2017 at 9:29 pm

  17. I wouldn’t really disagree with a word of that. Of course I haven’t read the Google posts yet, though they are “only a click away” so I will try to find time. You correctly declared your interest from the outset of your initial comment and as you will recall from our off-blog exchanges, I recognised that. I have no issue with Pablo’s contribution and had I done so, you know I would have addressed it head on. My (very brief, 5 line) comment flagged that you allow others to join in the conversation without declaring their interest, and I was suggesting that you require them to own up whether they have a dog in the fight. I always play the ball; I just ask that the man (or woman) let us know whether it is their own ball or has been provided by someone else.
    I hope the pizza remained palatable and look forward to buying you, and Pablo, those beers. To be clear, I won’t be recharging them to any clients.

    Stephen Kinsella

    13 July 2017 at 12:10 am

    • Point taken, particularly about the beers, thanks.

      We would love it if more people did like you and commented under their real name, but some people cannot, understandably, do that because, for instance, they work at the Commission, the Court, etc. We know who some of them are because they have told us, but we understand their situation and would not want to miss their contribution. As long as comments are respectful and express substantive opinions we are fine. Although we even publish anonymous comments that don’t discuss substance when that target us and not third parties (see e.g Margaret above on this comment thread). I also don’t think there is a technical way to require disclosure, and doing it ourselves would turn us into a sort of censors.

      For good or for bad that’s how we have operated for years and I’d resist creating an ad hoc new rule applicable only to this case (no matter how in vogue that seems to be nowadays 😉

      Alfonso Lamadrid

      13 July 2017 at 8:33 am

  18. […] but agreed to pay California over $800,000 Terra Hittson and Jonathan H. Hatch (Antitrust Update) Google Shopping Decision- First Urgent Comments Today is an important day for EU competition law. For various reasons I have not commented publicly […]


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