Business Czech e-commerce giant says Google ‘concessions’ would worsen conditions on local market

17-04-2014 13:28 | Chris Johnstone

The Czech Republic has a fairly unique position in the European Internet world with local search engine company Seznam by most calculations dominating world leader Google. But one of the biggest players on the local e-commerce market warns that European Commission moves to curb Google’s dominance in Europe could backfire and worsen the situation on the Czech market.

Photo: archive of Radio PraguePhoto: archive of Radio Prague The three year long case against Google for alleged abuse of its dominant position is an epic in European Commission case lore. A series of proposals and counterproposals looks now like drawing to a close with the outgoing Commissioner for Competition, Spaniard Joaquín Almunia, keen to get this massive dossier wrapped up and closed before he exits his Brussels for the last time later this year.

But the proposed February settlement and undertakings from Google with which Almunia would like to draw a line under the case are far from satisfying the victims of the US-based Internet giant. And with the competition commissioner still not having the backing for his proposed settlement from the rest of his colleagues, the fight is very much still on.

The basic charge against Google is that it is abusing its position as search engine of choice for most Europeans, it is reckoned to have a 90 percent market share, to give extra prominence to its own e-commerce sites - those sort of price comparison, travel tickets, e-shopping, auction, and the other similar sites which now abound - while putting rivals in a disadvantageous position.

The complainants say Google’s expansion into new areas, such a mobile phone search and other services through its android application, have made its potential market abuse much broader than when the Brussels competition watchers opened the case all those years ago.

South African-based media and e-commerce company Allegro, which operates the Heureka, Aukro, and Mall.cz sites in the Czech Republic says it is taking its fight against the proposed settlement to other European Commissioners so that they block Almunia’s proposed deal. “This proposal deal is worse than the Commission dropping the case entirely,” commented Allegro’s head of strategy, Chris Sherwood.

Sherwood adds that some of the so-called concessions, such as giving prominence to at least three rivals in specialized searches for travel, shopping and restaurant sites, offered by Google, far from making things better on the comparatively competitive and open Czech search engine market would make things far worse. For example, the concessions would close down the current open access to shopping sites, he says. The competitive position of e-commerce sites like his own and rival search engine Seznam would be eroded if the raft of proposed concessions go through, he added.

Other issues, such as the fact that Google seeks no payments for the prominence given to its own Internet shopping sites, while charging the rivals, is not dealt with at all, Sherwood adds. He would like to see Google’s e-commerce business spun off from the main company and given the same terms as other companies.

Google's European end game will be intriguing, but it is pretty difficult to imagine that the complainants will shut up and go away if they are faced with what most commentators have described as a Commission climb down against the omnipresent US Internet giant.

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