Top Tech Companies (Antares & Google) and Competition Report: EU Competition Law and US Antitrus

(Please be advised, Antares is an imaginative company created for the purpose of this note)

Man is a microcosm, or a little world, because he is an extract from all the stars and planets of the whole firmament, from the earth and the elements; and so he is their quintessence. (Paracelsus)

Imagine the following scenario:

When working as an in-house lawyer of a software producer company, Antares comprising 50 per cent of the market share of the relevant product (a softbot-based interface to the Internet), I have received a request for information from the DG COMP of the European Commission. The European Commission claimed that a number of European and non-European companies have complained that the company I worked for is hindering competition in different ways, in particular:

By treating more favourably, within the search results of the company's web search engine, links to own specialised web search services, putting the links of competitors in a less favourable position;
By using the contents of third parties web sites in Antares specialised web search services without previous consent;
By inducing third party web sites (publishers) to buy all or most of their on line search advertisements from Antares.

I was aware at that time that in April 2013 the European Commission published a first draft of commitments (based on Article 9 of Regulation 1/2003/EC) proposed by Google, (which has been renewed by Google in 2017 see here) [1] Antares' direct competitor, as mitigation for the Commission’s allegation of abusive conduct by Google (similar to the conduct now contested to Antares case).

Unfortunately, after having launched the so-called “market test” about the effectiveness of the proposed remedies, many companies complained with the Commission stating that the remedies proposed by Google were “unacceptable.” It was alleged by the Commission that Google has abused its dominant position in various ways.

The competitors’ complaints included that Google, in its general search results on the web, displays only the links to its own vertical search engines, omitting to list the links to competitors’ vertical search engines. Vertical search services are specialised search engines focusing on specific topics, such as restaurants, news or other products. The Commission also raised other competition concerns, such as the fact that Google allegedly copied content from other competing search engines. Another concern was linked to the fact that Google allegedly configured its search engines in such a way as to favour its own advertising trading partners, restricting the visibility of other advertising companies.

The European Commission on 27 June 2017 concluded a seven-year long investigation, which found that Google breached EU antitrust rules and Google was fined €2.42 billion for favouring its own shopping service. [2] EU argued "Google has abused its market dominance as a search engine."[3] The decission has not resulted in any meaningful change in its business practices. It was not even clear that comparison shopping was a distinct market worth fighting over in the first place. In September 2017 Google appealed against the record fine imposed by the EU [4] and in December 2017 Google is renewing their 2012 competition commitments. [5] In addition to Google, many challenged the Commission's findings and argues that EU feeble antitrust enforcement efforts did not yield the right results.

As an in house lawyer of Antares I was requested to prepare a reasoned opinion to be discussed primarily with Antares CEOs and at a later date with EU Commission explaining:

why the EU Commission is concerned with the allegedly anticompetitive practices that Antares seems to have put in place;
analysing, on the basis of the Guidance Paper 2008 on the Prioritisation of the Enforcement Activity of the European Commission and the relevant doctrine and case-law, what type of exclusionary conducts Antares seems to have put in place, and whether the Antares' case can be considered similar to the Google case;
what remedies Antares could offer to the EU;
what was the approach at US level, considering that the Federal Trade Commission in January 2013 dismissed a similar complaint saying that Googles behaviour had to be considered pro-competitive.

I. Foreword

1.1 Antares & Google and Their Alleged Business Practices

The report examines whether Antares business practices on a number of market segments related to search services employing softbot-based interface to the Internet and online advertising, are likely to be anti-competitive in markets where there is competition in vertical search services. This report especially focuses on how Antares displays its own vertical search services and copies content from other websites - such as hotel or restaurants reviews - to include these within its own services. Moreover, Antares' exclusivity when it comes to selling advertising around popular search terms has to be mentioned in the line of the abusive practices allegedly performed by the company.

The following question arises: except the alleged anticompetitive behaviour that has been experienced by the other search engines, may this type of behaviour harm consumers in any possible way? Consequently, has Antares somehow caused consumers to pay more for any services as a result of its behaviour? Along those lines, has consumers' choice been somehow reduced? This would be another test that the European Commission (hereafter “EC” or “Commission”) would need to look at. There is no possibility of arguing that Antares is engaging in predatory pricing, [6] as the website keeps giving away its service for free, and it should remain free in the future. However, the fact that Antares as a search engine makes money on the market for advertising also has to be taken into consideration. Furthermore, regardless of satisfying its users with free services, the price which searchers pay is exposure to advertisements. Therefore, as argued by the ECJ, the mere fact that a company ‘is a non-profit-making body does not deprive the activity which it carries on of its economic character, since (…) that activity may give rise to conduct which the competition rules are intended to penalise.’ [7]

In addition, when a company is engaged in the hindering competition or when it unfairly directs users to its own services rather than those of its competitors, it may lead to a monopoly or virtual monopoly on search and search advertising, since it is estimated to control forty or more percent of the market for search and search advertising.[8] It is important to note, however, that having a dominant market share is not against the law. Nevertheless, obtaining this position through anti-competitive means or using it in anti-competitive ways against other companies, is illegal under antitrust legislation. [9]

This point has also been sustained by the EC which in April 2013 published a first draft of commitments (based on Article 9 of Council Regulation (EC) No 1/2003) [10] proposed by Google (competitive software producer company). The above mentioned draft was a form of mitigation for the EC assertion that Google is abusing its dominant position in internet searches. Google offered further commitments to ‘avoid the time, inconvenience, and expense of ongoing proceedings, with the understanding that the Commission (EU) will confirm that there are no grounds for further action’. [11] However, as later events showed the EU declined to conduct a full ‘market test’ by circulating Google's commitments to the interested parties in the case. As a result, Google published the details of its antitrust settlement bid with the European Union in February 2014. Nonetheless, after more than seven years of investigation, EU found that Google had rigged its search algorithm to put its own shopping results at the top of the general search listings and to lower artificially the placement of rival sites in the search rankings. [] The question then arises as to whether Antares will be willing to avoid short-term settlement and to begin long-term arrangements, which are more likely to gain the company favour of the EC or to follow into Google’s steps.

Undoubtedly, the EC prioritises its resources to focus on those cases where consumer detriment is considered the highest. The findings of this report are already feeding into the EC thinking on hindering competition and support the EC’s ongoing commitment to tackle harmful business practices related to search services and online advertising that are likely to be anti-competitive in markets where there is competition in vertical search services (e.g. Google). Nevertheless, the views of this paper are those of its author and do not necessarily reflect the views of the EU nor the legal position under existing competition which the EU applies in exercise of its enforcement functions. Alternatively, the aim of the current report is to add to the body of economic and legal research relating to this interesting issue, and promote economic and legal debate in this area.

Given the above, and considering allegations of anti-competitive conduct Antares and the reasons of investigations prompted by antitrust agencies on both sides of the Atlantic, this report proceeds in several steps. Section one briefly discusses the factors that made the EC concerned with allegations stating that Antares has used its dominance to discriminate against competing services that appear in search results and has prevented some websites from using ads by other search companies. The second section gives an outline of the relevant European law, whereas section three, on the basis of the Guidance Paper 2008 on the Prioritisation of the Enforcement Activity of the European Commission, [12] provides a framework for defining the relevant market and for assessing market power in the industries of online search focusing on the current leaders Antares and Google. Consequently, section four discusses the remedies Antares could offer to the EC, relying on commitments Google renewed in 22 December 2017. Lastly, part five discusses the U.S. antitrust statue applicable to such a claim which is Sherman Act § 2 and its approach to the similar complaint that has been considered by the Federal Trade Commission in January 2013. Finally, the last section offers a conclusion to the findings.

II. European Commission and Relevant European Law

The EC seeks to ensure that markets work well for consumers by fostering competitive, efficient, and innovative markets in the belief that competition among companies improves consumers’ standards. [13] Consequently, the European Union competition law aims to ensure that companies will not abuse their market power. Consequently, the EC created provisions to ensure that free competition prevails, rather than cartels and monopolies sharing out markets and fixing prices. [14] For this purpose, the EC continually builds on its understanding of companies’ behaviour and on how companies interact in markets. In addition, the process of tracking down and sanctioning those in breach of competition law has been given a trust to the EC, which gains its powers under Article 105 TFEU. [15] Under this Article, the EC is responsible for ensuring the application of Articles 101 and 102 TFEU [16] and of investigating suspected infringements of these Articles.

Therefore, undertaking activities including hindering competition in order to achieve its key objective, which is growing in scale while preventing its rivals from doing the same, is presumed to restrict competition and thus to fall within Article 101(1) TFEU, assuming the other conditions of the applicable legal test are met. It also gives rise to the presumption that the behaviour is unlikely to fulfil the conditions of Article 101(3) TFEU. However, undertakings have the possibility to plead an efficiency defence under Article 101(3) TFEU, if they produce compelling evidence to show that their behaviour meets all the conditions for an efficiency defence under Article 101(3) of TFEU.

On the above grounds, in November 2010 the EC launched an investigation into Google after other search engines complained that the firm had abused its dominant position in online search. Consequently, and regarding the arguments put forth by this report, it is seems reasonable to acknowledge the simple similarities between Antares and Google. Both companies comprise more than forty percent of the market share of the relevant product (online search and search advertising). Furthermore, both companies are facing investigation suspecting infringements of Article 101 and 102 TFEU. Nevertheless, both companies expressly deny any wrongdoing and the general misconception that they achieved their massive dominance through competition on the merits, and reached their current size mainly by illegally blocking rival search engines’ access to customers and consumers. In short, both companies deny any liability relating to the EC’s investigation under Article 102 TFEU.

In the face of such a ‘denying’ attitude and the particular nature of Antares and Google business the EC acknowledged the difficulty of establishing dominance in the internet search market. [17] Indeed, search engines have the characteristics of a special type of market known as two-sided markets or platforms. Therefore, and in order to explore this path further, the next part of this paper will focus on defining the relevant market and assessing market power in the industries of online search focusing on the current leaders Google and Antares.

III. Antares & Google - Examples of Two-Sided Markets

As argued by Evans and Schmalensee two-sided markets are platforms which have two separate user groups supplying each other with network benefits. The platforms provide a meeting place to two groups or parties, and enable them to minimise the transaction costs they would have otherwise incurred, of searching for each other and interacting. [18] Google and Antares both operate as an intermediary between two groups that are the users making search queries, and a wide range of advertisers. Both of the web portals provide the remedies for exchange between the parties, which may not otherwise happen.

Proponents of this type of exchange have also suggested that more advertisers on one side and more users on the other side may increase the likelihood of advantageous correlation between users and advertisers. [19] In addition, they use advertising to fund the system offered to users for free. Consequently, online search websites are examples of media operating with two markets therefore a different profit-maximising approach than traditional business has to be taken into account. There is a need for analysing demand and costs attributed to each side, as well as the cost of running the platform. [20]

Furthermore, taking into account two-sided market characteristics is of fundamental importance when undertaking a competitive assessment in light of the Guidance Paper 2008 on the Prioritisation of the Enforcement Activity of the European Commission. Therefore, this report now turns to the actual analysis in order to assess market power in such markets.

3.1 Antares, Google and Search Engine Market Power

This analysis will follow few simple steps: the first part will focus on the market definition that is used to calculate market shares in the relevant market. The market share must be presented in correlation with the potential competitive constraints that determine market power such as contestability of the market, and the existence of barriers to entry and exit for new competitors. Furthermore, the possibility of users to switch to another service will be taken into consideration.

The first aim of this section is to grasp the scope of the enquiry as well as to gain a manageable set of relevant products (services) and companies. The market contains all the products (services) with which the product (service) may compete, with which there is a sufficient degree of substitutability. Substitution is the key concept in this respect. It can arise from the demand as well as from the supply side. If from the customer’s perspective a competitor’s product (service) is a suitable substitute for the product at stake, presumably the elasticity of demand will be high, therefore the company will not be able to increase the price sustainably because of the customers’ ability to switch to other product (service). [21]

3.2 The SSNIP Test

The rationale explaining the above argument takes the form of a small but significant and non-transitory increase in price test (SSNIP) that can be used to define the relevant market in a consistent way. In this test, we examine the effect of a price increase of a five to ten percent on the profit of the industry. If the increase in price triggers a loss caused by a lower demand, it proclaims that the product (service) has attainable substitutes which need to be included in the relevant market. However, if the increase in price causes increased revenue, it means that the product (service) does not have available substitute. Furthermore, the second possibility indicates that this might be a relevant market that is ‘worth monopolising’ if there is a hypothetical and willing monopolist. [22]

3.3 Two - Sided Extension of the SSNIP Test

It is important, however, to note the limitations of the SSNIP test. Its adoption in the case of two-sided market would be erroneous due to the fact that it ignores that the platform operates within two-markets, whose prices and profits are connected. This point is also sustained by the work of Noel and Evans who provided two-sided extension of the SSNIP test that involves starting with the platform as product (service) and adding its most relevant substitute. [23] The price considered would be the weighted average of the price charged in two sides. On each level, prices across sides and across platforms would need to be optimised.

After defying the relevant market, the competition authorities presumably would focus on the competition constraints, accounting for both sides of the platform. This report follows into their steps and in the next section focuses on the contestability of the markets.

3.4 Contestability of the Markets

This report assumes that the relevant market has been defined by the fact that Antares and Google have lead market shares in their particular industries (search services and online advertising) From this perspective the antitrust concerns will have to take into consideration the contestability of the relevant market to examine whether Google and Antares have market power. Market share calculation is only one of the elements used to assess market power: another one, barriers to entry to potential competitors, will be discussed below.

3.5 Barriers to Entry to Potential Competitors

A market in which high profits are achieved potentially attracts new businesses. The aim is to gain their share of the high profits. Furthermore, it is critical to understand that market entry in search advertising is relatively high because of the costs of getting users on the platform. [24] The indirect network effects are strong and therefore when each of the market grows it becomes more difficult for new companies to compete. Another common refrain from Antares and Google critics was that their access to immense amounts of data used to target ads presented a barrier to competition that no one else could match, thus protecting their unassailable monopoly. [25] However, scale can be viewed in many ways and the fact that challenging firms might have to spend the same as Antares and Google in order to replicate their success is not considered as a barrier to entry that requires an antitrust remedy.

3.6 Vendor Lock-In (Consumer Lock-In)

In March 2004, the EC reached an agreement between the EC and Microsoft regarding anti-competitiveness. This agreement sent a strong message to the tech industry stating that it will not tolerate practices that lead to vendor lock-in. The government body instead stood for consumers who should have freedom of choice in the products they want to use. [26] In addition to the above discussion and regarding the arguments put forth by this report, the possibility of Antares and Google users to switch to another service will be taken into consideration. As argued by Arthur vendor lock-in, also known as customer lock-in, a customer depends on a vendor for products and services, unable to use another vendor without substantial switching costs. Lock-in costs which create barriers to market entry may result in antitrust action against a monopoly. [27]

However, in respect to the search engine as Antares and Google, it has to be noted that users are not restrained only to one side. They may use different search engines and are not constrained from doing so. On the advertisers side, companies are even more likely to use several different platforms simply to reach more users. Furthermore, visiting search engines by their users is free of charge which makes ‘lock-in’ less possible.[28]

IV. Welcoming the Initiative to Improve Interoperability

It can be concluded that in online search platforms the assessment of market power, as discussed, must account for specificities of two-sided markets, as well as for issues specific to each side of the platform. Therefore, in light of the above, saying that Antares and Google dominate ‘search’ or ‘online advertising’ misses the mark precisely because there is simply nothing especially antitrust-relevant about either search or online advertising. Moreover, Antares and Google belong to the same market. This considerably further reduces their market power and reduces antitrust concerns.

Nevertheless, on the ground of Article 9 of the EU's Antitrust Regulation (Regulation 1/2003), in order to end the antirust proceedings, a company has to offer commitments to the Commission that needs to make them legally binding. The EC, which makes this type of decision, will not deduce whether or not EU antitrust rules have been breached, but it will only legally bind the company to avoid violation of the commitments (e.g. Google). However, if the undertaking infringes its commitments, the EC has the right to impose a fine of up to ten percent of the company’s annual worldwide turnover, without being obliged to find a violation of Articles 101 or 102 TFEU. [29]

Therefore, in the next part of the analysis, the current report will focus on the improved commitments that Google's confirmed with the Commission on 27 December 2017. This report strongly advices Antares to initiate a similar course of action.

4.1 Google’s Commitments [30]

With regards to the first concern related to the way a company displays specialised search services Google has now accepted to guarantee that whenever it promotes its own specialised services on its web page (e.g. for products, hotels, restaurants), the services of three rivals, selected through an objective method, will also be displayed in a way that is clearly visible to users and comparable to the way in which Google displays its own services. Secondly, users will be notified via specific labelling of the specialised search engine that belongs to Google. Thirdly, the normal search results will be graphically separated from the results of specialised search engines.

Subsequently, the way rivals present their offerings will belong to their individual sphere of control. In instances where Google does not charge for inclusion in its specialised search service, rivals will not be charged to participate in the rival links. In addition, the three held up to view rivals will be selected from a number of possible specialised search competitors using Google’s normal web search algorithm. However, in an event where Google charges for inclusion in its specialised search service, the three rivals will be selected from a number of possible specialised search competitors based on a dedicated auction mechanism.

Secondly, concerns arise from Google’s use, in its own specialised search services, of original content taken from other websites without their consent thus gaining benefits from the investments of competitors without their prior authorisation, or on some occasions, even against their explicit will. To contend with the above concern, Google will allow third parties to opt out from the use of their content in Google’s search services. Google will ensure that any such opt out will not unduly impact on its competitor’s ranking in its general search results or their ranking in the AdWords platform. The opt out will be open to all websites, with a specific opt out with ‘finer granularity’ for news publishers – for the control of the use of their content in Google News.

Thirdly, the exclusivity provisions in Google’s agreements with web publishers, including any third party website such as newspapers, require them to obtain all or most of their online search advertisements posted on their websites from Google. This reduces the choice of online search ads offered on those sites and competitors’ incentives to innovate. Google pledged that there will no longer include any written or unwritten obligations that would require web publishers to source online search ads exclusively from Google.

The fourth competition concern relates to Google contractually restricting the possibility to transfer online search advertising campaigns away from Google's AdWords and to simultaneously manage such campaigns on competing online search advertising platforms. In order to address such concerns, Google proposes to remove obligations that would prevent advertisers from porting or managing search advertising campaigns across competing advertising platforms.

4.2 The EC Pyrrhic Victory ?

David Wood, ICOMP's legal counsel representing the interests of Microsoft and four other applicants, favoured the opinion that: ‘Without a third party review, Almunia risks having the wool pulled over his eyes by Google.’[31] Accordingly to competitors, these commitments will have absolutely no effect on Google's leading position, and as discussed by this report, if Antares follows into Google’s steps it will be argued that the company’s commitments will have absolutely no effect as well. Therefore, the question remains: should Antares have to go as far as Google? Can Antares truly stifle competition when all users have to do is to use a competing service by entering a different URL in their browser or pull up a different app on their mobile phone? Some would say that Google’s concessions already go too far. But clearly Google’s opponents do not think so.

Criticism also appeared within the Commission itself. Internal Market Commissioner Michel Barnier commented on the Google commitments and declared that ‘We had a very long debate which shows that there are a lot of concerns and questions. (…) We haven't finished our work on this subject.’ [32] It seems that everything comes down on interpretation. Indeed, time is the best adviser and let Antares plays with that. A few years ago, Google has become synonymous with searching anything on the internet and it will not be changed by either top-down decision or penalty imposed by the Commission, if any. The tech world is not about anti competition, but about technical revolution.

Furthermore, as argued by the Federal Trade Commission [33] (hereafter “FTC”) in the USA, the tech world is about consumers and their well-being. Consequently, the next part of this paper will take into consideration Google’s investigation in the USA on allegations that it was abusing its dominance in internet search. This report will attempt to discuss why Google competitors need to understand that the company is not guilty and its behaviour has to be considered ‘pro-competitive’ when pursuing antitrust claims with the Department of Justice or the FTC.

V. Google and US Antitrust Law

Google was examined on accusations that the company was abusing its dominance in internet search using methods such as tying, exclusive dealings, deceptive practices, monopoly pricing, and privacy abuse. These accusations have resulted from the adoption of Google’s universal searching (which presents listings from news, images, and books etc. at the top of the search results) and the merger with Motorola. If the authenticity of the above allegations was established, it would have violated section 1 and 2 of the Sherman Act and section 5 of the FTC Act. However, in order to deduce that Google breached the Sherman Act [34] and FTC Act, [35] it must be established that Google’s practice restrain competition, either by harming consumers or excluding competition.

Google favours the opinion that its search engine supports its users by making search more accessible. Furthermore, it thinks that the process is not anti-competitive because if its users were aiming to find a specific company, they could easily locate it; the only difference is that the result will be further down the list. Eventually, the FTC agreed with this point. The independent agency of the United States government found no supporting evidence that Google unfairly favoured its own services in search results.

Instead of paying fines, the FTC made Google voluntarily agree to license certain patents to address the concerns with potential violations of section 1 of the Sherman Act. Subsequently, Google agreed to abstain from screen scraping synopses of reviews from other sites, such as TripAdvisor and Yelp, and stop incorporating them in its search results, which address potential breach of Section 2 of the Sherman act and Section 5 of the FTC Act. [36] Google has officially managed to escape a nearly two-year US (FTC) investigation without paying anything. FTC Chairman Jon Leibowitz said that ‘this was an incredibly thorough and careful investigation by the commission, and the outcome is a strong and enforceable set of agreements.’ [37]

There are still concerns that the FTC has overlooked some major problems. Critics indicated that the FTC has failed to address the fact that almost ninety percent globally in search advertising is controlled by Google, which can be qualified as a monopoly that reduces competition. [38] However, regardless of whether a charge is brought under the Sherman Act or the FTC Act, monopolisation arise from two elements. The first element is the possession of monopoly power, and the second element is the wilful acquisition of the power, known as the bad act. The mere possession of monopoly power is not a violation.

Furthermore, the definition of ‘monopolisation of market’ not only in EU competition law but also in respect to the antitrust US law differ from one sector to another. It is therefore possible for the antitrust authorities to have the effect of restraining innovation that would benefit consumers. Unfortunately, the costs of this type of misinterpretations are not adequately recognised by decision makers. [39] This problem is even more visible in high tech sectors, which evolve much faster than other traditional industrial sectors. In addition, the inability to clearly define the above term increases the chance that the antitrust law will be diverted to ends other than the protection of customers. This type of process is called ‘regulatory capture’, and happens when less competitive players try to beat the dominant undertakings by political and legal means instead of doing so by reducing their costs and improving their products. [40]

The US has a history of antitrust proceedings in which we may see a reduction in prices and market shares of the presumably monopolistic company in the years leading up to the proceedings,[41] which should logically call into question the whole point of such proceedings. One of the historical examples of monopolistic companies most often mentioned is that of the American oil company Standard Oil. [42] According to its detractors, Standard Oil tried to exclude several producers from the American market by using unfair competitive practices to capture a market share of over ninety percent at the end of the 19th century.

It can be argued, however, that the company succeeded in capturing such an impressive market share after over thirty years of systematic innovation. It is thanks to this superior efficiency that the price of oil in the USA was continually falling over the final decades of the 19th century. Despite this superior efficiency, the decline of Standard Oil’s dominance was underway well before the 1911 governmental decision to break up the company. In fact, following the intervention of the government, prices stopped falling and even rose appreciably. [43]

Although Google’s commitments to change its practice have made the FTC less vigilant, a spokesman of the Commission, Michael Jennings, stated that even though the EC took a note of the FTC decision, this decision has no direct implication for the Commission investigation and for its further discussion with Google. [44] The following question then arises: what makes the EU enforcement to a small degree different from the US approach regarding the broad embrace of entry barriers (discussed earlier in this report) as a substitute of market share? The non-exhaustive entry barrier list gives the Commission more flexibility to condemn a company of possessing dominant market power. In other words, the EU enforcement is more stringent than the US. [45] For instance, EU courts will consider a broad range of entry factors, such as national regulations, [46] access to capital fund, essential facility [47] and superior technology. In contrast, the US Supreme Court neither rejects nor embraces the essential facility doctrine. [48]

Evidently the EC and the FTC decided to terminate the investigation, leaving many substantive legal issues unresolved and consequently, lowering down the strength of the future complaints.

VI. Concluding Remarks

The logic of market abuse that goes with the above mentioned lawsuits brought by competition authorities such as the EC or FTC against companies that are successful, innovative and fast developing like Antares and Google, is flawed. These lawsuits too often have negative consequences for both consumers and the economy as a whole. They cause to turn away from the original focus of attention or interest of these innovative companies, and force them to spend significant sums defending their usage of new methods and future ideas therefore end before courts in several countries, not to mention the heavy fines that can be demanded and appealed in time consuming and financially exhausting lawsuits. In addition, as argued by McKenzie and Shughart, these legal proceedings can also make it impossible for companies to make a return on their development costs, and lead them to scale down their innovative activities. [49] Last but not least, it should be emphasised that the main losers of such a slowdown in innovation are people the laws were meant to serve, the consumers. This report anticipates that one day lawmakers will understand that the aim of competition is not to protect businesses that are inefficient or the one that aims to deceive consumers. This report agrees with King's thought that any business with market power substantially lessens competition when consumers, rather than individual competitors, are harmed.[50]

References:

(OSCOLA style of referencing)

[1] Google Voluntary Commitments <www.ftc.gov/system/files/documents/closing_letters/nid/google_letter.pdf> accessed 1 July 2018.

[2] EU, ‘Antitrust: Commission fines Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service’(European Commission, 27 June 2017) accessed 1 July 2018.

[3] ibid.

[4] Foo Yun Chee, ‘Google challenges record EU antitrust fine in court’ (Reuters, 11 September 2017) < www.reuters.com/article/us-eu-google-antitrust/google-challenges-record-eu-antitrust-fine-in-court-idUSKCN1BM1LJ> accessed 1 July 2018.

[5] ibid (n 10.

[6] RH Koller II, ‘The Myth of Predatory Pricing: An Empirical Study’(1971) 105 (4) Antitrust Law & Economics Review.

[7] Case C-244/94 Fédération Française des Sociétés d'Assurance and Others v Ministère de l'Agriculture et de la Pêche [1995] ECR I-4013.

[8] I de León, An Institutional Assessment of Antitrust Policy: The Latin American Experience (Kluwer Law International 2009) 165.

[9] European Commission, ‘Abuse of a dominant position’ <http://ec.europa.eu/competition/consumers/abuse_en.html> accessed 1 July 2018.

[10] Council Regulation (EC) 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [2003] OJ L 1/1 <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32003R0001> accessed 1 July 2018.

[11] Case COMP/C-3/39.740 Google's Proposed Commitments (2013)<http://docs.dpaq.de/6448 google_commitments_

full.pdf> accessed 1 July 2018.

[12] Commission of the European Communities,’Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings’ <http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52009

XC0224(01)> accessed 1 July 2018.

[13] P Craig and G de Burca, EU Law: Text, Cases and Materials (Oxford University Press 2003) 1064

[14] RY Naidu, ‘Cartels Vis-À-Vis Competition Law: Judicial Analysis’ (2013) 7 (1) Nalsar Law Review

[15] Article 105 TFEU (ex Article 85 TEC), http://eurlex.europa.eu/legalcontent/EN/ALL/;jsessionid=gyLBTFmbG2XXK82n0dyGGyqny6KnrXZLWn5PGWzTSx0HzT314tHF!1039788642?uri=CELEX:12008E105 accessed 1 July 2018.

[16] Article 101 TFEU (ex Article 81 TEC) <http://eur-lex.europa.eu/legal-content/EN/AL /?uri=CELEX:12008E101> and Article 102 TFEU (ex Article 82 TEC) <http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:12008E102> accessed on 1 July 2018.

[17]J Almunia, ‘Competition in Digital Media and the Internet’ (2010) <http://www.ucl.ac.uk/news/news-articles/1007/10070802 > accessed on 1 July 2017

[18] DS Evans and R Schmalensee, 'Markets with Two-Sided Platforms' (2008) 1 Issues in Competition Law and Policy 667.

[19] DS Evans, 'The Economics of the Online Advertising Industry' (2008) 7 Review of Network Economics 372.

[20] DS Evans, 'Two-Sided Market Definition', in Market Definition in Antitrust: Theory and Case Studies (ABA Section of Antitrust Law 2009) 7.

[21] FM Scherer, Industrial Market Structure and Economic Performance (Houghton Mifflin 1980) 517

[22] S Bishop and M Walker, Economics of E.C. Competition Law: Concepts, Application and Measurement (Sweet & Maxwell 2009)

[23] MD Noel and DS Evans, 'Defining Markets That Involve Multi-Sided Platform Businesses: An Empirical Framework With an Application to Google’s Purchase of DoubleClick' (AEI- Brookings Joint Center For Regulatory Studies, Working Paper 2007) <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1027933> accessed 1 July 2018; L. Filistrucchi, 'A SSNIP Test for Two-sided Markets: The Case of Media' (Net Institute, Working paper 2008) <http://ideas.repec.org/p/net/wpaper/0834.html> accessed 1 July 2018.

[24] M Levene, An Introduction to Search Engines and Web Navigation (John Wiley & Sons 2011) 68.

[25] ibid.

[26] Case COMP/C-3/37.792 Microsoft Corporation v Commission [2007] OJ L 32/32 < http://www.legi-internet.ro/fileadmin/editor_folder/pdf/decizie_micro

soft.pdf > accessed 1 July 2018.

[27] WB Arthur, ‘Competing technologies, increasing returns, and lock-in by historical events’ (1989) 97 Economic Journal 642–665.

[28] R Schmalensee, ‘Jeffrey Rohlfs’ 1974 Model of Facebook: An Introduction’ (MIT Sloan School Working Paper 2011) 10 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id =1802053> accessed 1 July 2018.

[29] ibid (n 12) and CS Kerse and N Khan, EC Antitrust Procedure (5th edn, Sweet & Maxwell 2005).

[30] Case COMP/C-3/39.740 Google’s Proposed Commitments (2014) <http://docs.dpaq.de/6448-google_commitments_full.pdf> accessed 1 July 2018.

[31] FY Chee, ‘Google avoids fine with EU antitrust deal’ (Reuters 5 February 2014) <www.reuters.com/article/2014/02/05/us-eu-google-idUSBREA140NO20140205 > accessed 1 July 2018.

[32] T Körkemeier, ‘Third of EU commissioners oppose Google antitrust deal - officials’ (Reuters 13 February 2014) < www.reuters.com/article/2014/02/13/eu-google-idUSL5N0LI2JQ20140213 > accessed 1 July 2018.

[33] The Federal Trade Commission (FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act < http://www.ftc.gov > accessed 1 July 2017

[34] Sherman Anti-Trust Act 1890, 15 USC §§ 1-<http://www.justice.gov/atr/public/divisionmanual/chapter2.pdf> accessed 1 July 2018.

[35] Federal Trade Commission Act 1914, 15 USC §§ 41-58

<www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf > accessed 1 July 2018.

[36] Federal Trade Commission, ‘Letter of commitment to the Commission’ (3 January 2013) <www.ftc.gov/sites/default/files/attachments/press-releases/google-agrees-change-its-business-practices-resolve-ftc-competition-concerns-markets-devices-smart/130103googleletterchairman leibowitz.pdf> accessed 1 July 2018.

[37] Federal Trade Commission, ’Google Agrees to Change Its Business Practices to Resolve FTC Competition Concerns In the Markets for Devices Like Smart Phones, Games and Tablets, and in Online Search’ (3 January 2013) <http://www.ftc.gov/news-events/press-releases/2013/01/google-agrees-change-its-business-practices-resolve-ftc > accessed 1 July 2017

[38] Ibid

[39] G Manne and JD Wright, ‘Google and the limits of antitrust: The case against the case against Google’ (2012) 34 Harvard Journal of Law and Public Policy 173-174.

[40] C Delorme Jr, WS Frame and D Kamerschen, ‘Empirical evidence on a special interest-group perspective to antitrust’ (1997) 92(2) Public Choice 317-335.

[41] United States v Microsoft Corporation 253 F3d 34 (2001) <www.justice.gov/atr/cases/f200400/200457.htm> accessed 1 July 2018.

[42] Standard Oil Co of New Jersey v United States 221 U.S. 1 (1911) <https://supreme.justia.com/cases/federal/us/221/1/case.html > accessed 1 July 2017

[43] J McGee, ‘Predatory Price Cutting: The Standard Oil (NJ) Case’ (1958) 1 Journal of Law and Economics 137-169.

[44] C Arthur, ’US ruling on Google 'will not sway European inquiry’’(The Guardian 4 January 2013) <http://www.theguardian.com/technology/2013/jan/04/google-european-investigation-ftc > accessed 1 July 2018.

[45] F Alese, Federal Antitrust and EC Competition Law Analysis (Ashgate Publishing Ltd 2008).

[46] Case 22/78 Hugin Kassaregister AB and Hugin Cash Registers Ltd v Commission of the European Communities [1979] ECR 1869 <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61978CJ0022> accessed 1 July 2018.

[47] Case 322/81 NV Nederlandsche Banden Industrie Michelin v Commission of the European Communities [1983] ECR 3461< <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61981CJ0322 > accessed 1 July 2018.

[48] ibid (n 45)

[49] RB McKenzie and W Shughart II, ‘Is Microsoft a Monopolist?’(1998) 3(2) Independent Review 190-191; RB McKenzie, ‘In Defense of Monopoly: Market power fosters creative production’(2010) Regulation 18-19.

[50] S King, ‘Changes to competition laws may hurt consumers’ (The Conversation, 17 March 2016) <https://theconversation.com/changes-to-competition-laws-may-hurt-consumers-56364> accessed 1 July 2018.

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