Google Gets Rebuffed by US Regulators, Amazon Plays Nice With EU’s
In this game of Monopoly, both players are set out to convince everyone that they are nothing like Rich Uncle Pennybags. On Thursday, regulators considered proposals from two of the world’s biggest tech titans to sort out concerns about their…
In this game of Monopoly, both players are set out to convince everyone that they are nothing like Rich Uncle Pennybags.
On Thursday, regulators considered proposals from two of the world’s biggest tech titans to sort out concerns about their gigantic market shares in the online economy. For Google, US regulators are reportedly playing hardball but, for Amazon, EU antitrust officials appear more open to a deal.
Breach of Antitrust
Google has come under the watchful eye of the US Justice Department for its dominant position in the online ad market, where it earned $31.7 billion in gross revenue last year. Google operates both a service where marketers can buy ads and one where publishers can sell them, and also operates a trading exchange where buyers and sellers can execute deals via auction. Publishers, competitors, and Google critics have claimed the company uses its giant ad network to benefit other parts of its business and give it a leg up against rivals.
Amazon, meanwhile, is currently facing two EU antitrust probes over concerns that the titanic amounts of data it collects from third-party sellers gives the e-commerce giant’s own retail operations a huge advantage. Both companies are trying to get regulators to back down with concessions, but one is gaining more traction:
- Google proposed spinning off its online ad auctions business into a separate company, though it would still remain under parent firm Alphabet. The new unit could be worth tens of billions of dollars but, according to sources who spoke to Bloomberg, the US Justice Department is likely to reject the proposal, potentially leading to an antitrust lawsuit.
- Amazon has told the EU it’s willing to go cold turkey and stop using data it gathers from third-party sellers where it would benefit the company’s retail operations. Amazon also proposed to give rival products more prominent placement on their site — the European Commission said Thursday that it is seeking input from Amazon rivals before making a final decision to accept the offer later this year.
If Past is Prologue: Amazon has already found success cutting deals with EU antitrust investigators. In 2017, the European Commission accepted Amazon’s commitment to drop clauses in its contracts with e-book publishers forced them to give the company terms on par with its rivals. Considering new EU law allows massive fines of up to 10% of a major tech company’s global revenues, they’ll probably want to remain on good terms.