Leonid Bershidsky has a good piece up at Bloomberg arguing against the European Commission’s decision to investigate Google, announced today with great fanfare, for anti-competitive practices. In the piece, Bershidsky does some informal market research and finds that in fact Google’s comparison shopping service—one of the targets of the EC’s attack on the search engine giant—works much better than the competition, at least for his purposes. He ends on the following note:
It’s pointless for European regulators to interfere with the development of a healthy ecosystem in which good products tend to find their way to consumers. In the tech world, empires, and monopolies, form and fall too fast for regulators and their cumbersome procedures to keep up.
All too true. Microsoft’s fights against the United States and the European Commission brought us the decoupling of Internet Explorer and Windows Media Player, respectively, from the Windows operating system. Though at the time they seemed like important cases—and indeed, Microsoft was very much throwing its weight around for market advantage at the time—neither Internet Explorer nor Windows Media Player have in any way turned out to be the key technologies that power the technological revolution that we are still living through today.
A brief little aside in today’s FT writeup on the EC’s decision to pursue its case sums up some of the apparent motivations behind it:
The EU’s antitrust case comes against the backdrop of European discontent with Silicon Valley and the economic disruption of the digital age. Once lauded for their innovative spirit, big US tech groups have come under criticism in Europe over their market dominance
The information economy is as different from what came before as the Industrial Revolution was from the agricultural economy before it; laws will have to change now as they did to deal with railroad and steel conglomerates then, and the new tech giants may well need restraint in some areas. But trying to run innovation by bureaucratic fiat risks leaving Europe in the same place France has been before—watching the British run away with the telegraph after the French had gotten out to an early lead during the Napoleonic wars, or watching the Internet crush Minitel. Each time, the country that used its legal system to encourage, rather than restrain, innovation and disruption came out ahead.
Big corporations using the might of government to crush new competitors is not “trust-busting.” Europe needs to address the deep-seated issues with culture and employment law that prevent it from keeping up with the tech revolution. Unfortunately, stories like this suggest the old Continent will be trying to double down on its old system for the foreseeable future.