On Tuesday 27th June it was announced that the European Commission had fined Google €2.42bn for breaching EU antitrust laws. The Adam Smith Institute is damning in its criticism of that ruling.
Sam Bowman, Executive Director at the Adam Smith Institute, said in reaction to this morning's news:
"In fining Google this morning for giving prominence to its Google Shopping service European Regulators made the same mistake that regulators did in the 1990s when Microsoft was fined for bundling Internet Explorer with Windows products.
The basic error is to assume companies like Google and Microsoft are akin to 'Natural Monopolies.' If a user experience is made worse by Google Shopping being prioritised then users will have the option of moving to a search engine like Bing - not to mention there would be an incentive for large existing rivals like Facebook to create their own rival platform. If people can switch between platforms it doesn't matter much if, within a platform, there isn't that much competition.
The core issue here is whether we need to force competition within software platforms if competition exists between them. Just as use of Windows declined steadily as users moved to other operating systems so Google users have plenty of alternatives they can switch to if bundling worsens the platform's quality enough. Bundling has benefits as well as costs, because it pays for the free things Google does, and trying to stamp it out will end up hurting users in a misguided quest to help them."
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