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Google Runs Afoul of European Values

Noah Feldman is a Bloomberg View columnist. He is a professor of constitutional and international law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. His books include “Cool War: The Future of Global Competition” and “Divided by God: America’s Church-State Problem -- and What We Should Do About It.”
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Is the European Union out to get Google? You might think so, considering that EU regulators are poised to bring anti-competitive-conduct charges against the search giant, while U.S. regulators happily settled their differences with Google a couple of years ago. Add the European regulatory efforts to force Google to let people eliminate certain permanent-seeming records of their past conduct, and you might think there's some deeper cultural explanation, such as old world skepticism of new world technology.

It turns out that culture does matter in the EU's action against Google -- but for more complicated reasons than you might think. Google has, in fact, achieved greater market penetration in Europe than in the U.S., so Europeans, as opposed to their bureaucratic overlords, clearly like Google very much. But European antitrust law has a subtly different focus than its American counterpart. It protects competitors, not competition. And therein lies a tale of what makes European values different from American ones.

Antitrust law is an immensely complicated field, and the nonexpert -- like me -- enters at his peril. Nevertheless it's worth knowing that, as interpreted by the European Court of Justice, Article 82 of the Treaty on the Functioning of the European Union differs from American antitrust law, which is based on judicial interpretation of the 1890 Sherman Act.

The European treaty provision prohibits “abuse” of a “dominant position within the common market.” This prohibition imposes on a company what the European court calls “a special responsibility not to allow its conduct to impair genuine undistorted competition.”

This language suggests a different emphasis than U.S. law, which focuses on prohibiting anti-competitive behavior that harms the consumer. The European approach implies that market dominance itself can be the source of a legal violation, even if the dominant company isn’t trying to act anti-competitively. U.S. courts don't think in terms of the abuse of a dominant position. A brief filed before the Supreme Court by U.S. government antitrust agencies a decade ago actually argued that the Sherman Act is not an “abuse of dominance” law at all.

A decade ago, it was commonplace for antitrust scholars to say that EU and U.S. law diverged sharply as a result of this value difference -- that U.S. law protects competition itself for the benefit of consumers, while EU law favors the existence and rights of competing businesses.

To be sure, a rival view exists today, namely that more sophisticated economic theory is leading to convergence between American and European standards. Yet the difference between American regulators’ attitude toward Google and that of their European counterparts strongly suggests continued divergence.

Why should this difference in values exist? It’s tempting to conclude that the European Union’s political culture emphasizes the usefulness of multiple large actors competing in parallel -- much like the EU's member states. In this cultural sense, Google looks like the U.S. itself: an imperially dominant player whose very position of dominance threatens the capacities of actors who might want to compete. It doesn't help for this analysis that Google is a U.S.-origin company. It also shouldn't escape notice that the information revolution is still broadly understood in Europe as having an American origin.

The U.S. values of freedom of speech and information, taken to the point of absolutism, haven't found the same degree of popularity in Europe as has the information technology itself. The EU’s willingness to limit the flow of information, for example by allowing individuals the right to remove embarrassing information about themselves, is in this sense of a piece with European limitations on hate speech that would never be allowed in the U.S.

When it comes to information, Americans tend to believe that the government should allow any result the private market allows. This, after all, is the heart of Oliver Wendell Holmes Jr.’s famous appeal to the metaphor of the marketplace of ideas to justify free speech under the First Amendment.

In practice, Google need not panic. European penalties for the abuse of dominance are less draconian and more gentlemanly than U.S. penalties for violating antitrust laws. Europe has no analogue to American criminal antitrust law, and there are no treble damages available to those who show a violation. It could even be argued, as my colleague the antitrust authority Einer Elhauge suggested to me in conversation, that weaker penalties are a reason that Europe has more aggressive standards of legal violation.

Yet the EU’s anticipated enforcement action against Google is nonetheless a reminder to U.S. companies that the American ideology that may unconsciously undergird their products and even their industries doesn't translate perfectly across borders. Information may want to be free, but, nation states persist. And they, or their proxies like the EU, still get to do the regulating.

  1. In the 2004 case, Verizon Communications. v. Trinko , the Supreme Court didn't go quite that far, but it did essentially say that dominant market players should not be obligated to share their competitive advantage in order to promote competition.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Noah Feldman at nfeldman7@bloomberg.net

To contact the editor on this story:
Stacey Shick at sshick@bloomberg.net