Google Shopping Antitrust Investigation
Added on 2020-07-22
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Managerial SocialResponsibility(The ‘Google Antitrust’ Case)
Q1Everyone know that Google is a market leader and their search engine has more than90% market share in European nations. Last year Google was held responsible for antitrust andthis company was asked to pay the 2.4 billion Euro in the name of fine. EU argued that Googleused their dominance in order to hurt and stop competitors from doing business. Wherever aperson search for a something then at the top of result page they only see those product andservices which Google want them to see. If a person want to search for a particular brand theninstead of showing only that brand, Google also provide them information about other brands orproducts who paid this company (Manne and Wright, 2011). EU claim that this organisation isusing their dominance in order to restrict their competitors from growing and they are onlysupporting those companies who have paid Google for promoting their products or services. Thiswhole case is related to ''Google shopping''. This is service which was started by company in2002, user are allow to search whatever products on online websites. They can compare priceand find large number of vendors. EU claimed that Google is giving more as space to ''Google shopping'' on Google's searchresult page. They are not giving an equal opportunities to the other merchants who also want toadvertise their products on result page. Company is doing this because they want to support''Google shopping''. Google, on the other hand, said that they did not do anything wrong andcomparison shopping services can bid for the ad space if they want to depict their service on theresult page. Company argued that they have a bidding system and anyone can take part in it.''Google shopping'' took part in auction and they bought the ad space. Spokesperson of Googlesaid that Google shopping is a separate business and they have not given then ad space withoutorganising an auction (Haucap and Heimeshoff, 2014). From above case, one thing is very clear that Google is facing a great ethical dilemma.Google may have organised an auction for the ad space but they that no company will like totake part in it because companies that that ''Google shopping'' and Google are differentcompanies on paper but not in market. Comparison shopping services often give argument thatthey bid billions of dollars for the ad space but they will never get it because Google shoppingwill always bet more money. They argue that Google shopping do not have to pay the amountwhich they will bid because Google and Google shopping are same company. Even if they willpay the amount then it will go in the same house so Google shopping would not have any1
problem in paying bidding amount because it will remain in the house. One cannot ignore thearguments of ''comparison shopping services'' because they are genuine and these kind of thingshas happened in market many time. This proves that if Google will organise auction that it wouldnot result in fair play game and if they will not organise a bidding procedure for renting ad spacethan there is no chance that anyone will believe that they are giving equal opportunities to otherplayer of the market. Google is in a situation where they will always be seen as a culprit because''Google shopping'' is in a business which is very controversial. When Google was fined in thiscase then their spokesperson put a huge pressure on the making the comments that Google and''Google shopping'' are two separate entity and they should not be seen together (Almunia, 2012).Q2The head of Google EMEA business was the key decision maker in the whole case. MattBrittin, the head in Europe, knew that legal obligation in Europe are much harder compared tothat of USA. He could not convince comparison shopping services to bid at the time of auctionfor ad space because he knew that they would not believe Google shopping and Google areseparate entity, not only in books but in business world also. At the same time, if he will notorganise any process for bidding then he Google would stand a chance to prove that they havefair process for buying the ad space on their search engine. One can easily understand thedilemma which head of google EMAR business was facing at that time. He has to run businessoperations on a parent company but without entering in a trouble where he has to prove that bothbusiness are separate entity and they do not help each other in order to register profit by givingillegal advantages. Q3Google shopping and other ''comparison shopping services'' are in same business andboth are running their business on same search engine, i.e. Google. If this company will give addspace to ''Google shopping'' by doing auction then people will not believe it because they wouldbe consider it as a fair bidding process (Clemons and Madhani, 2011). If they will not organiseauction then it will definitely be considered as illegal advantages to ''Google shopping''. In bothsituation, Google has face the blame of reducing competition and using their dominance for ownbenefit. Q42
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