eBay sides with Google in EU competition case? Only if you cherry-pick

'Where were you five years ago,' Chocolate Factory asks puffing latecomer


Update eBay has come galloping to Google’s rescue in its EU anti-trust case... if you define a “market” in the way the Chocolate Factory wants.

eBay chief executive John Donahoe told the Financial Times that in the shopping sector it is a major competitor to Google, thus backing up the Chocolate Factory’s argument that it is not abusing any dominance.

Yet one of the first complainants to the European Commission, Shivaun Raff, founder of price-comparison service Foundem, told El Reg that the FT may be overstating the case.

“I suspect the FT has got the wrong end of the stick and misinterpreted a nuanced comment about the extent to which different kinds of services compete with each other,” she said.

Less than two weeks ago, the search monster was slapped with a Statement of Objections (SO) by the EU Commission for abusing its dominant market position in search by directing users to its own Shopping service. Such a move is usually the first step on the road to punitive measures.

Google’s argument is that is is not abusing dominance in the online shopping market because it is not dominant in that market – this is where Donahoe’s comments will help Eric Schmidt sleep well at night.

However, complainants argue that merchant sites like eBay and Amazon are distinct from price-comparison sites such as Moneysupermarket.Com, Nextag and Twenga.

According to its own rules, the Commission's first step in a so-called Article 102 investigation is to assess whether the undertaking concerned is dominant or not. “Defining the relevant market is essential for assessing dominance, because a dominant position can only exist on a particular market. The relevant product market is made of all products/services which the consumer considers to be a substitute for each other due to their characteristics, their prices and their intended use,” according to Commission rules.

Given that an SO has already been issued, it is likely that Vestager has already thought about this and come to the conclusion that Google is abusing dominance.

According to Raff, “Google is putting a brave face on it, but there is no question that this is the beginning of the end... Not even Google’s formidable PR machine can put this genie back in the bottle.”

The Chocolate Factory still has the right to a defence and may write to the Commish or request an oral hearing. As always, the Commission will say only that it will not prejudge the outcome of a case.

Neither Google nor eBay had responded to requests for additional information at time of press.

Over the course of the five-year anti-trust investigation, Google has also been accused of imposing restrictive contracts on advertisers and scraping content from other sites, but it would seem that the offers it has made to rectify problems in those areas have appeased the Commission and it now all hangs on the shopping-search issue.

EU Commissioner Margrethe Vestager could fine Google up to 10 per cent of its global annual turnover, as well as ordering the search engine – which is responsible for more than 90 per cent of all internet searches in Europe – to change its business practices.

Update

An eBay mouthpiece (eventually, by way of an email address that went to a completely different website) sent us this statement. We reproduce it in full with no editing whatsoever:

Hi Jennifer- We read your story in the Recorder http://www.theregister.com/2015/04/27/ebay_siding_with_google_in_eu_competition_case_only_if_you_cherrypick/ based on an FT story that was wrong and misleading. FT is working on updating their story. Below is our statement about the story:

"eBay's remarks to the FT regarding Google Shopping were not intended to be taken in reference to the European Commission's case against Google. The article misconstrued the company's comment.

The European Commission's inquiry concerns Google's Internet search dominance in Europe and how they use that market dominance to impact other services. eBay believes in sound competition principles, and opportunities for all commerce players, especially small businesses, to enable growth in an open and thriving marketplace. While the specific complaint against Google has not been made public, we believe the Commission is investigating important concerns with the Internet ecosystem. “

Could you please add our comment to your story?

®


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