As Europe geared up to hit Google with a record-breaking €2.4 billion fine over allegations it abused its dominance in online search to harm smaller rivals, some Washington lobbyists started to play defense.
A letter obtained by POLITICO is circulating without letterhead or signatures among members of Congress and rages against what supporters of the powerful American tech industry say are heavy-handed, politically motivated EU antitrust tactics levied against American companies. Lobbyists are trying to get U.S. lawmakers to sign on to its message.
“It has become increasingly clear that, rather than being grounded in a transparent legal framework, these various investigations and complaints are being driven by politics and protectionist policies that harm open-competition practices, consumers and unfairly target American companies,” the letter says, before listing investigations of American companies under scrutiny from EU antitrust regulators. “We are concerned that in some instances American companies are being singled out in Europe.”
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The letter echoes previous efforts by Google to enlist members of Congress to pressure the EU to drop its antitrust case against the company. In late November 2014, 10 members of Congress who received campaign funds from Google wrote to senior officials in the European Parliament raising concerns about a resolution arguing in favor of breaking up Google’s online business into separate companies.
International criticism via the letter didn’t sway Vestager’s decision today but the authors hope to ramp up the pressure on Brussels and undermine its neutrality in the public eye. It is a timely reminder that looming fines against Google could ratchet up transatlantic tensions, reviving the angry outbursts that followed the Commission order that Ireland claw back over €13 billion in alleged tax breaks from Apple.
Meanwhile, a coalition of American firms wrote to Vestager on Monday in support of her Google investigation.
The letter being circulated in the U.S. Congress is unlikely to faze Commission officials. More concerning from their point of view is how U.S. President Donald Trump reacts upon discovering Brussels is levying a large fine on Google — no friend of Trump, but still an American icon.
Google declined to comment on whether it was behind the latest letter, which has not picked up signatures of support from U.S. lawmakers.
Similar letters, though that time signed by several U.S. politicians, were sent ahead of a case being opened against U.S. company MasterCard in 2015. The inquiry, which alleges certain MasterCard rules and fees are anti-competitive, is ongoing.
Two sources in Washington in possession of the letter but who only agreed to speak on the condition of anonymity said it was circulated by the Consumer Technology Association, whose 2,200 members include Google; Apple, which lost €13 billion as a result of an EU competition probe; and Qualcomm, which is fighting two antitrust inquiries.
The CTA declined to confirm or deny drafting the letter but said it was consistent with CTA’s views. “We have discussed the letter and the issue of EU antitrust overreach directly with policymakers. We also hope to work with the EU to encourage a pro-innovation regulatory environment that enables a vibrant European tech industry,” said Michael Petricone, senior vice president for government affairs at CTA.
Europe’s defenders point out that the U.S. the Federal Trade Commission concluded in 2013 that Google employed anti-competitive practices to monopolize its power and undermine its rivals and that FTC staff recommended bringing a lawsuit against some Google practices. No lawsuit was ever filed. The FTC’s then-chairman Jon Leibowitz said, “Google’s primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience.” Google’s chief legal officer David Drummond said, “The conclusion is clear: Google’s services are good for users and good for competition.”
Accusations the Commission uses competition policy to protect local firms are not new. In early 2016, then U.S. Treasury Secretary Jack Lew accused the EU of unfairly targeting American companies as it investigated corporate tax avoidance allegations against multinationals including Starbucks, Amazon and Apple.
Jacques Lafitte, a veteran consultant in Brussels who founded AVISA, described the latest letter as a “monument of bad faith.” He pointed to a part of the letter that described the Commission as imposing a $13.5 billion “penalty” against Apple “to punish the company,” whereas the Commission had ruled it must pay back €13 billion of tax breaks.
He also noted that in the last year Margrethe Vestager, Europe’s competition commissioner, blocked a £21 billion merger between the London Stock Exchange and its German rival Deutsche Börse and handed out a record €3 billion fine to Europe’s leading truck producers MAN, Volvo/Renault, Daimler, Iveco and DAF for breaking EU antitrust rules.
Commission data shared with POLITICO also don’t seem to bear out accusations of U.S. bias in Europe’s competition cases: From 2010 to 2017, the Commission adopted 83 antitrust and cartel decisions and imposed fines on a total of 264 undertakings, of which 158 were EU companies (60 percent) and just 22 (or 8 percent) hailed from the U.S.
“We are not protecting national champions,” said Cecilio Madero Villarejo, the Commission’s deputy director general responsible for antitrust, speaking at a conference organized by Concurrences. “We do not have a bias.”
Commission officials declined to comment but indicated they were aware of the letter.
Google’s foes were quick to see its hand at play.
“An army of astroturfers on Google’s payroll is being mobilized to push a false narrative that Google’s woes with the European Commission represent ‘protectionism’ by a jealous Europe, despite the fact that the key complainants in their case are U.S. firms,” said Luther Lowe, vice president for public policy at Yelp, which filed a complaint against Google in Brussels and is a frequent adversary of Google in the U.S.