BUSINESS

The European Union has escalated its antitrust probe of Google Inc., filing formal charges against the U.S. search giant. (Wall Street Journal)

Use our resources to learn more about Google’s genesis.

Teachers, scroll down for a quick list of key resources.

Discussion Ideas

• The European Union has accused Google of violating antitrust law. What are antitrust laws?
  • Antitrust laws protect consumers from trusts and monopolies. Most economists think trusts and monopolies limit fair competition in the marketplace, resulting in higher prices and fewer choices for consumers.

• How is Google accused of violating Europe’s antitrust laws? (Click to about :30 in the video above.)
  • Critics say Google links to its own services at the top of its search results, pushing down links to competitors. Competitors say this hurts their business because many consumers don’t scroll down the page, making competitors’ services invisible.
  • Specifically, competitors such as Yelp have accused Google of preferencing its own restaurant reviews (usually tied to GoogleMaps); Expedia and TripAdviser have accused Google of preferencing Google Flights; and shopping-comparison sites have accused Google of preferencing Google Shopping. Google has denied all wrongdoing.

• Why is Google being accused in the EU instead of the US?
  • Google controls a whopping 90% of the search market in Europe, making it a big target. (It has a slightly-less-whopping 70% share in the U.S.) The EU also has stricter antitrust laws than the U.S.: “If you are dominant in Europe, you have a special responsibility to respect competition,” according to one expert quoted in the WSJ.
  • The U.S. Federal Trade Commission did investigate Google for antitrust violations in 2012, but ultimately found that the company had not broken any laws. (Regardless, the company did modify some business practices.)

• What are the possible outcomes of the EU charges against Google? (Click to about 1:10 in the video.)
  • Probably not a lot in the short-term.
    • Google could make some concessions, such as allowing more competitors into its top search results or allowing advertisers to connect with competitors more easily.
    • The EU could impose fines of up to 10% of Google’s annual global revenue—$66 billion last year, according to the WSJ video. (That would be $6.6 billion in fines.)
    • The EU could regulate how Google does business in the European Union—by separating search from its other businesses (such as Google Flights, Google Shopping . . . or the Google Science Fair?).
    • Both parties could be tied up in court for years, allowing Google to “continue to solidify its dominant position in the marketplace.”

TEACHERS’ TOOLKIT

Wall Street Journal: EU Files Formal Antitrust Charges Against Google

Nat Geo: This Day in Geographic History: Google Incorporates

Washington Post: Google’s antitrust woes in Europe, explained

Federal Trade Commission: Statement of the Federal Trade Commission Regarding Google’s Search Practices (In the Matter of Google Inc., FTC File Number 111-0163)