What Google’s troubles in Europe say about antitrust law in the software age

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Google’s legal team certainly has their hands full, with billions of dollars at stake.

In San Francisco, its lawyers are fighting allegations that it infringed Oracle’s copyright in Java, an open-source software programming language, in designing its Android mobile operating software. And now Europe’s tough antitrust cop, Margrethe Vestager, appears ready to make good on her threat to make Google pay for its enormous success in search algorithms and mobile software.

British newspaper on the weekend Telegraph announced that the European Commission is preparing a fine of EUR 3 billion (approximately USD 3.4 billion). That’s three times the amount Intel fined several years ago for sales practices that Europe deemed unfair to its main rival of the past decade, Advanced Micro Devices. On the other hand, it is only half the amount in Europe could a fine for Google, whose annual revenue is estimated at $6 billion. Moreover, it is not official yet.

Some of the allegations Google is fighting in Europe are similar to those that got Microsoft in trouble about 13 years ago. Both drew the ire of competitors for the practice of “bundling” their own applications with operating system software – Microsoft was targeted for favoring Internet Explorer on Windows computers (a practice it was forced to change), while Google was attacked for favoring its search app on smartphones and Android tablets.

Google is also in trouble over the way its algorithms rank online search results – to the perceived detriment of some European-based price comparison and shopping sites. The company managed to fend off these allegations for seven years before Vestager turned up the heat again. As it makes its way across Europe, Google faces renewed scrutiny in the United States, with the Federal Trade Commission reopening an investigation even though the agency voted unanimously to shut it down just two years ago.

What should make Google’s situation in Europe particularly concerning for other software makers is that the suggested solution will likely require the company to rewrite its software algorithms for how it collects, analyzes and displays data. The “fix” is not simply a matter of changing sales practices or processes, as was the case with Intel. This could force changes at the engineering level, which Google has vehemently opposed along the way – appealing to consumer needs. It’s unclear how Europe plans to technically enforce such changes – unless it hires developers as savvy as those employed by Google – especially since it has fallen on hard times when it comes to controlling the Microsoft deal. And it was a much easier change to monitor.

This developing case should give other major software companies facing antitrust scrutiny in Europe – especially Facebook, which is under investigation in Germany – plenty to think about for years to come.

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