Archive for July, 2014

Open Letter to Commissioner Almunia and College of Commissioners

July 23rd, 2014 No comments


Dear Commissioner Almunia,

CC: Commissioners of the College and the President of the Commission

In a recent interview with the Global Competition Review, you mentioned that you were “very interested in reading” Complainants’ responses to the Commission’s recent Letters in the Google case. Please find a copy of our 11 July Response attached.

We very much hope that you will find the time to read it, because it unambiguously demonstrates that all of the Commission’s key arguments for adopting Google’s proposals are erroneous. More importantly, it shows that these arguments directly contradict the fundamental conclusions of the Commission’s own Preliminary Assessment: having correctly concluded in March 2013 that Paid Search traffic “cannot be a substitute” for the free, natural search traffic Google is illegally diverting, the Commission is now proposing to do precisely that.

Our Response also reveals that many of the spurious arguments the Commission has been making in defence of Google’s proposals (including many of those in your 11 June 2014 letter to your fellow Commissioners) have been adopted from Google arguments and submissions that the Commission seems to have made no attempt to validate. As we demonstrate, had the Commission sought such validation, the fatal flaws in these arguments would have been revealed some time ago. For example, contrary to the Commission’s claims, the proposed Paid Rival Links will consume the majority of rivals’ profits; will not be selected according to "relevance", "merit", or "quality"; will not be less expensive than existing advertisements; will not ensure that innovative new entrants can participate on non-disadvantageous terms; and most certainly will generate billions of dollars of additional revenue for Google that will come at the direct expense of the European businesses and consumers the Commission is duty bound to protect.

For you to continue to claim that auction-based Paid Rival Links are a substitute for the free, natural search traffic Google is anti-competitively diverting, you would now need not only to argue against the overwhelming evidence and analyses from Complainants, market participants, and consumer groups, you would also need to argue against your own DG—directly contradicting the fundamental conclusions of its Preliminary Assessment. Clearly, this is not a sustainable position—particularly in a case with such far-reaching and potentially catastrophic consequences.

In February, you announced your determination to accept Google’s proposals, despite overwhelming and unprecedented opposition to them from all of the parties they are ostensibly intended to help. Whatever sequence of events led you to accept Google’s misleading arguments without displaying any of the healthy scepticism that would normally be applied to “evidence” from a defendant in a competition case, we trust that the attached comprehensive rebuttal of these arguments will persuade you to think again and change course. If not, the future of the European digital economy may well depend on the acumen and resolve of your fellow Commissioners.

Yours sincerely,

Adam and Shivaun Raff

Co-Founders, and

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