EU's Antitrust 'War' on Google and Facebook Uses Abandoned American Playbook

Research output: Other contribution

Abstract

On June 27, the European Union imposed a €2.4 billion (US$2.75 billion) fine on Google for giving favorable treatment in its search engine results to its own comparison shopping service. And Germany’s antitrust enforcer is investigating Facebook for asking users to sign away control over personal information.

In contrast, American antitrust enforcers have shown little interest in these companies. The Federal Trade Commission (FTC) did open an investigation into whether Google has a search bias, but closed it in 2013, despite recognizing that it “may have had the effect of harming individual competitors.”

Anti-Americanism, however, does not explain these starkly different approaches. Europe targets homegrown companies with the same ferocity. Last summer, for example, the EU fined a cartel of European truck-makers even more than it did Google.

Instead, the divergence is explained by America’s abandonment in the 1980s of the theory that competition promotes innovation, which is still embraced by Europe today. America now seems to operate under the theory that competition threatens innovation by denying companies that develop a superior product the rewards of monopoly.

My research suggests that embrace of this new theory has led to under-enforcement of America’s antitrust laws, which may in turn have actually held back innovation.

Original languageAmerican English
StatePublished - Jul 13 2017

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