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16 November 2021, Tuesday | NIAS Europe Daily Brief #44
IN FOCUS
By Harini Madhusudanan
The European Union, Google, and the antitrust bill
On 10 November, the Alphabet unit of Google lost an appeal against the European Union. The company lost 2.42 billion euro to the European antitrust bill after the General Court upheld a 2017 order. The court ordered that the European Commission was right in fining Google for the breach, and Alphabet-unit claims that their ads have always helped people find the products quickly and easily and that they made a few changes back in 2017 to comply with the European Commission’s decision. This ruling is being seen as a major victory for Europe’s Competition Commissioner Margrethe Vestager, in the first of three rulings that are at the core of the EU push to regulate big tech.
The 2017 antitrust bill
In 2017, Google was accused of favoring its own comparison shopping services. While Google favored its own services on the general results pages with favorable display and positioning, Google was said to relegate the results of competing services based on ranking algorithms. The court claims that the company departed from competition on merits, and hence placed a fine on the Company. As the dominant player in the search engine market, Google is said to have abused its power by promoting its own services while also demoting the competitors. The statement read, “By decision of 27 June 2017, the Commission found that Google had abused its dominant position on the market for online general search services in 13 countries in the European Economic Area, by favoring its own comparison shopping service, a specialized search service, over competing for comparison shopping services.”
To a large extent, competitive traffic is the major contributor to the services offered by Comparison Shopping. Up to 90 per cent of Google’s revenue is generated from advertisements and this revenue generation depends on the traffic. More traffic causes more clicks, and this traffic is used to attract potential retailers to list with their services. In order to benefit from comparison shopping, in 2008, Google began to push its shopping services to be implemented in European Markets. Though market dominance is not illegal under the EU antitrust rules, Google was accused of exploiting its dominant position in internet search markets in all European Economic Area (EEA). However, Google could still appeal the new verdict and take the case to the EU’s highest court, the EU Court of Justice
The counterargument by Google
Google has denied the claims by the antitrust bill. The company made a statement and claimed that “its services had helped the region's digital economy grow”. The company accused other market competitors of pushing the case against the dominant search engine, which included overviewing and investigating Google’s search page algorithm, PageRank, with the EU’s Competition Commission monitoring the proceeds. In order to comply, Google separated its comparison shopping service to a different company after the fine and would run with its own revenues and profits which would effectively avoid further fines. While partly complying with the court decision, the company appealed the decision on the claims that the EU chair mistreated facts and did not show enough evidence that their services hurt the rival companies and asked for the ruling to either be reduced or overturned.
The appeal from Google was based on six points. The first two claimed that the court did not prove that Google placed its ads at the top search results to favor their services. The next two stated that the court mistreated the pieces of evidence and facts, and the last two points said that the fine amount worth almost 2.5 per cent value of their 2016 revenues was unwarranted as a possible penalty.
The EU changes on Internet regulation
The shopping case is one of the three decisions that have raked up a total of 8.2 billion Euros in EU antitrust fines in the previous decade. Margrethe Vestager subsequently took on Apple, and Facebook, where investigations are still ongoing. Google is expected to face two more defeats in appeals against rulings involving the Android mobile operating system and AdSense advertising service. This is on par with the EU introducing many changes in its technology policies to ensure they have control over the data generated in the region.
The European Union, from the past couple of years, has been looking to toughen its legislation to ensure fair competition across its 27 member countries. Additionally, the European Union has been looking at the practices of the big tech and other technology-related businesses and holding them accountable for their unsafe policies. The European Union’s decisions on the same issue would be an effective example for other countries to follow suit and secure safe access to resources. In this case, the legislators believe that smaller developers should be allowed the opportunity to showcase their work. The goal is to bring more privacy to EU consumers by restricting target advertisement.
IN BRIEF
By Joeana Cera Matthews and Padmashree Anandhan
REGIONAL
NATO warns Russia over military buildup on Ukrainian borders
On 15 November, the NATO Secretary General Jens Stoltenberg met with Ukrainian Foreign Minister Dmytro Kuleba. Following the meeting, Stoltenberg warned Moscow: “NATO remains vigilant… Any further provocation or aggressive actions by Russia would be of serious concern. We call on Russia to be transparent about its military activities.” According to estimates by Ukrainian President Volodymyr Zelenskiy about 100,000 Russian troops have amassed in the border area creating panic of a potential attack. Alongside the Eastern Partnership foreign ministers’ meeting in Brussels, foreign ministers of France and Germany also issued a joint statement extending support to Ukraine. The statement called on Russia to restrict itself from creating chaos and be open about its military activities. According to the US State Department, US Secretary of State Antony Blinken discussed the same with French Foreign Minister Jean-Yves Le Drian on 14 November. A statement released post this discussion, saw the US suggesting that the Belarus-Poland border standoff was a distraction technique as “(Belarus’ actions) threaten security, sow division, and aim to distract from Russia’s activities on the border with Ukraine.” British Prime Minister Boris Johnson, however, warned Europe, saying that it was high time to choose sides since it would be difficult to rely on Russian gas while retaliating against Russian aggression in Ukraine. (“Ukraine: NATO alarmed by Russian troop buildup on border,” Deutsche Welle, 15 November 2021; “US, France discuss Russian military activity in Ukraine,” Deutsche Welle, 15 November 2021; Andre Roth, “Nato chief warns Russia against ‘further provocation’ amid Ukraine tensions,” The Guardian, 15 November 2021)
CLIMATE CHANGE
EEA Report: Air pollution in the EU caused over 300,000 fatalities in 2019
On 15 November, the European Environment Agency (EEA) released a report which maintained that the EU had witnessed over 307,000 premature deaths due to air pollution in 2019. It also claimed that this number could have been cut in half with the World Health Organization’s (WHO) new air quality guidelines. The fresh set of guidelines, published in 2021, could have reduced the premature death rate by 58 per cent, thus enabling the bloc to reach its 2030 goal of 55 per cent fewer premature deaths. Commenting on the report, WHO’s Regional Director for Europe Hans Henri Kluge said: “To breathe clean air should be a fundamental human right. It is a necessary condition for healthy and productive societies.” The air quality, which is measured by the amount of fine particulate matter, nitrogen dioxide and ground-level ozone present in the air, had seen an improvement from 2018 to 2019. In Europe, air pollution poses the ‘biggest environmental risk to human health’. (Alex Barry, “Air pollution killed over 300,000 in EU in 2019 — report,” Deutsche Welle, 15 November 2021)
MIGRATION
Poland-Belarus border standoff: Merkel’s phone call with Lukashenko
On 15 November, German Chancellor Angela Merkel and Belarusian President Alexander Lukashenko held a telephonic conversation to discuss the ongoing migrant crisis at the Poland-Belarus border. German government spokesperson Steffen Seibert released a statement, saying: “The Chancellor and Mr. Lukashenko spoke about the difficult situation on the border between Belarus and the European Union - especially about the need for humanitarian aid for the refugees and migrants there.” The phone call marked the first conversation between Lukashenko and any western leader after Belarus’ controversial 2020 presidential election. However, German Chancellor-in-waiting Olaf Scholz did not hold Merkel’s reconciliatory stance. He said: “First of all, it must be said clearly that this is a bad dictator there in Belarus. And there is nothing to gloss over, he has lost all legitimacy.” In this backdrop, Lukashenko is said to have addressed Belarusian state-run Belta: “We are actively working on convincing these people to head home.” (“Belarus crisis: Poland says migrants marching to border,” Deutsche Welle, 15 November 2021)
SCIENCE AND TECHNOLOGY
The US rebukes Russia over anti-satellite missile test
On 16 November, the US State Department spokesperson Ned Price accused Russia of having blown up a Russian satellite leading to the production of debris. The incident which occurred only early 15 November, forced the seven-member International Space Station (ISS) crew to take shelter in capsules. He said: “Earlier today, the Russian Federation recklessly conducted a destructive satellite test of a direct ascent anti-satellite missile against one of its own satellites… so far generated over 1,500 pieces of trackable orbital debris and hundreds of thousands of pieces of smaller orbital debris that now threatens the interests of all nations.” The Russian Space Agency, however, underplayed the event, stating: “The orbit of the object, which forced the crew today to move into spacecraft according to standard procedures, has moved away from the ISS orbit.” They added that the station was now in the “green zone”. Price, infuriated by the incident, warned to work with “allies” to “respond to their irresponsible act”. The debris is expected to risk satellites and human spaceflights in coming years since the velocities at which these particles move can dent or puncture the walls of modules. (“Russian anti-satellite missile test draws condemnation,” BBC, 16 November 2021; Meghan Bartels, “Space debris forces astronauts on space station to take shelter in return ships,” Space.com, 15 November 2021)
GERMANY
The certification of Nord Stream 2 pipeline suspended untill resources are transferred
The certification of the Nord Stream 2 gas pipeline project has been denied by the Federal Network Agency of Germany. The project was aimed to transfer gas from Russia to Germany. The German regulator stated that “the subsidiary set to operate the German part of Nord Stream 2 does not meet the conditions to be an independent transmissions operator.” The reason behind the decision is due to the Switzerland based company’s plan to launch a subsidiary under German law solely for German section of the pipeline. The suspension to hold until the asset and human resources are transferred to the subsidiary. (“German agency suspends certification for Nord Stream 2 pipeline,” Deutsche Welle, 16 November, 2021)