Antitrust

6 While in Europe antitrust has increasingly been used as a tool to regulate the so-called 'FANG' companies (Facebook, Amazon, Netflix and Google), to date the U.S. antitrust authorities have taken a far less aggressive approach towards enforcement of the FANGs. Whether antitrust authorities have sufficient tools to take action against the FANGs, and indeed whether such enforcement is the most appropriate approach to regulation, is up for debate in both the United States and in Europe. EUROPE In Europe, European Union Competition Commissioner Margrethe Vestager has gained a reputation for being tough on tech giants. This year's record-breaking €4.34 billion fine for abuse of dominance by Google has further cemented this image. We are also seeing national competition authorities in Europe test the boundaries of their antitrust powers to deal with an ever dynamic digital sector. ABUSE OF DOMINANCE CASES Google has been subject to a series of headline-grabbing fines by the European Commission (EC) for alleged abuse of dominance in various digital markets. In July 2018, Google was fined a record- breaking €4.34 billion by the EC for allegedly using its open-source Android operating system as a vehicle to retain its dominance in internet search. The EC identified various restrictive terms that Google imposed on manufacturers of Android smartphones, including requiring the pre-installation of the Google Search app and the Chrome browser as conditions to use of the Google Play app store (i.e., tying), and providing financial incentives to device manufacturers to pre-install Google Search on Android devices. Google appealed the fine in early October, challenging the EC's narrow market definition — which held that the Apple iPhone was not even an indirect competitor of Android devices — and arguing that Google's 'tying' contracts were not anti-competitive, but rather were a means to recoup billions spent in research and development. In the meantime, Google has begun charging device manufacturers a license fee for use of its Android app store in an effort to comply with the EC's decision, a move that has drawn criticism from search engine rivals, and which puts the EC in the awkward position of inadvertently creating a new price tag for a previously free product. Google is no stranger to record-breaking fines, having been fined €2.42 billion by the EC in 2017 for allegedly giving unfair prominence to its own comparison shopping service on the Google search engine. Google similarly appealed that decision, arguing that the EC erred in treating Google as an 'essential facility' that rivals must use to compete. Google also argued that every company should be allowed to promote its related services regardless of dominance. As with Google's attempts to comply with the Android decision, competitors criticized Google's proposed remedy, which introduced an 'auction system' allowing other shopping sites to bid for the chance to appear in a carousel of ads at the top of the site; some lawmakers have even argued that only splitting Google's search engine from its specialized services will suffice. The appeal is still pending in the European Courts. FOREWORD 01 C O M M I S S I O N E R M A R G R E T H E V E S T A G E R H A S G A I N E D A R E P U T A T I O N F O R B E I N G T O U G H O N T E C H G I A N T S Antitrust as a Tool to Regulate the FANG Companies: Differing Approaches in the United States and in Europe

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