WEBVTT - Google Appeases EU with New Shopping Service (Audio)

0:00:00.040 --> 0:00:03.520
<v Speaker 1>The European Commission find Google two point four billion euros

0:00:03.600 --> 0:00:07.320
<v Speaker 1>for promoting its own shopping search results over competitors, and

0:00:07.360 --> 0:00:09.680
<v Speaker 1>it gave the company until tomorrow to make changes to

0:00:09.720 --> 0:00:13.440
<v Speaker 1>allow other services a better chance to compete. To comply

0:00:13.560 --> 0:00:15.760
<v Speaker 1>with the order, Google has announced it will make its

0:00:15.760 --> 0:00:18.759
<v Speaker 1>shopping service into a standalone company that will have to

0:00:18.760 --> 0:00:21.360
<v Speaker 1>bid against other companies for space at the top of

0:00:21.360 --> 0:00:25.080
<v Speaker 1>the Google Search page. The CEO of Kelcu, however, Who's

0:00:25.160 --> 0:00:28.360
<v Speaker 1>Which is one of Google's competitors in Europe, told Bloomberg

0:00:28.400 --> 0:00:31.240
<v Speaker 1>News that selling slash to competitors won't solve the problems

0:00:31.280 --> 0:00:34.360
<v Speaker 1>in the shopping search market. Here to talk with us

0:00:34.440 --> 0:00:37.680
<v Speaker 1>about Google's move to comply with the regulator's order is Thomas,

0:00:37.680 --> 0:00:42.519
<v Speaker 1>graphic partner at Cleary Gottlieb. Thomas, can you explain to

0:00:42.600 --> 0:00:49.159
<v Speaker 1>us exactly how Google's proposal here will work? Um? Yes, okay,

0:00:49.200 --> 0:00:53.000
<v Speaker 1>So uh in a nott shell, what Google is going

0:00:53.040 --> 0:00:57.360
<v Speaker 1>to do is it's going to give rival comparation shopping

0:00:57.400 --> 0:01:02.720
<v Speaker 1>services the same chance to lays product thats on Google

0:01:02.720 --> 0:01:06.119
<v Speaker 1>Search as it gives to Google Shopping. So there will

0:01:06.240 --> 0:01:10.920
<v Speaker 1>be full equal treatment between comparation shopping services such as

0:01:11.600 --> 0:01:16.280
<v Speaker 1>CALCU and Google Shopping. Google Shopping will have to bid

0:01:16.319 --> 0:01:21.920
<v Speaker 1>in competition with comparation shopping services for placement of its

0:01:21.920 --> 0:01:26.280
<v Speaker 1>product that's on Google Search. Will the auction aspect of this,

0:01:27.080 --> 0:01:29.880
<v Speaker 1>which might drive up the price of ads, be a

0:01:29.880 --> 0:01:35.520
<v Speaker 1>problem for EU regulators? Um? Did the auction process is

0:01:35.560 --> 0:01:37.880
<v Speaker 1>in here? And in the nature of of the issue

0:01:37.920 --> 0:01:41.440
<v Speaker 1>here because sort of what is that issue? Is that

0:01:41.560 --> 0:01:44.640
<v Speaker 1>the product that that Google shows on its on its

0:01:44.680 --> 0:01:48.960
<v Speaker 1>general search result pages, these are ads. They have always

0:01:49.000 --> 0:01:52.880
<v Speaker 1>been auctioned off. What is going to change is that

0:01:53.240 --> 0:01:56.760
<v Speaker 1>comparation shopping services will have the same opportunity to bid

0:01:56.800 --> 0:01:59.600
<v Speaker 1>for these ads, and and so they will achieve the

0:01:59.680 --> 0:02:04.120
<v Speaker 1>equal treatment that the European Commission is looking for. Well,

0:02:04.160 --> 0:02:06.560
<v Speaker 1>why is it then that the competitors don't seem to

0:02:06.640 --> 0:02:10.960
<v Speaker 1>like this idea very much? So it's uh, it's obviously,

0:02:11.040 --> 0:02:14.040
<v Speaker 1>you know, different people may have different views, but what

0:02:14.080 --> 0:02:17.560
<v Speaker 1>they are looking for? Um what what the views of

0:02:17.600 --> 0:02:21.880
<v Speaker 1>the competitors are? It's not really here the benchmark for compliance.

0:02:22.000 --> 0:02:27.640
<v Speaker 1>The Commission has set out the paramidals for compliance in

0:02:27.639 --> 0:02:32.359
<v Speaker 1>its decision and that's what Google is working towards. Now.

0:02:32.360 --> 0:02:38.240
<v Speaker 1>It's possible that you know, over the process of this investigation. Uh,

0:02:38.400 --> 0:02:43.360
<v Speaker 1>some of the complainants have uh developed expectations what this

0:02:43.480 --> 0:02:45.800
<v Speaker 1>outcome will be, and it may be that, you know,

0:02:46.360 --> 0:02:49.400
<v Speaker 1>some of them are disappointment about the outcome. And it's

0:02:49.400 --> 0:02:53.760
<v Speaker 1>also it's the case that at earlier stages in the investigation,

0:02:54.720 --> 0:02:59.360
<v Speaker 1>the Commission, in one of its charge sheets, suggested that

0:03:00.440 --> 0:03:04.640
<v Speaker 1>these arts should be made available to competitors almost at

0:03:04.639 --> 0:03:08.360
<v Speaker 1>a near free basis at once sent the fixed price.

0:03:09.080 --> 0:03:12.040
<v Speaker 1>But that fell away, that's no longer in the decision.

0:03:12.160 --> 0:03:14.280
<v Speaker 1>So some of the complainants, like Calco may still be

0:03:14.360 --> 0:03:16.919
<v Speaker 1>thinking that that's you know, that's the solution, but that's

0:03:16.960 --> 0:03:20.720
<v Speaker 1>not what is in the decision. Um. Your Competition Commissioner

0:03:20.760 --> 0:03:23.560
<v Speaker 1>margretvest day Er said last week that she would start

0:03:23.600 --> 0:03:27.720
<v Speaker 1>investigating if Google's offer doesn't work and if companies that

0:03:27.880 --> 0:03:31.880
<v Speaker 1>complained about Google's behavior are still unhappy and we have

0:03:32.520 --> 0:03:37.320
<v Speaker 1>Kelku and found them already complaining. So is that a

0:03:37.360 --> 0:03:40.960
<v Speaker 1>built in problem? Yes, so I think, you know, I

0:03:41.000 --> 0:03:46.920
<v Speaker 1>think it's normal that the Commission will listen to market participants,

0:03:46.960 --> 0:03:52.080
<v Speaker 1>but ultimately the benchmark is not the view of competitors

0:03:52.240 --> 0:03:56.760
<v Speaker 1>or the market participants. The benchmark for compliance is what

0:03:57.040 --> 0:04:01.240
<v Speaker 1>the decision sets out as its remedy and the requirements

0:04:01.240 --> 0:04:05.440
<v Speaker 1>that are specified in the decision for a compliant remedy. So, Thomas,

0:04:05.480 --> 0:04:09.560
<v Speaker 1>do you think that the Commission is, despite the whatever

0:04:09.600 --> 0:04:15.120
<v Speaker 1>complaints the competitors may have, likely to approve what Google

0:04:15.160 --> 0:04:19.120
<v Speaker 1>has done as being in compliance with disorder. So there

0:04:19.200 --> 0:04:23.400
<v Speaker 1>is no formal approvement approval for seen in this process.

0:04:23.400 --> 0:04:28.640
<v Speaker 1>And that's that's different from the commitment procedure that Google

0:04:28.760 --> 0:04:31.920
<v Speaker 1>was engaged with the European Commission earlier in the process,

0:04:32.040 --> 0:04:36.240
<v Speaker 1>where Google was trying to negotiate commitments and those commitments

0:04:36.480 --> 0:04:41.560
<v Speaker 1>required approval, required the decision of acceptance by the Commission. Here,

0:04:41.920 --> 0:04:45.920
<v Speaker 1>the Commission has adopted its decision. It has said how

0:04:46.040 --> 0:04:50.440
<v Speaker 1>Google needs to comply, and it's then for Google to

0:04:51.200 --> 0:04:53.479
<v Speaker 1>ensure this compliance. And there's not going to be any

0:04:53.520 --> 0:04:57.760
<v Speaker 1>kind of formal approval um obviously if there is, if

0:04:57.760 --> 0:04:59.960
<v Speaker 1>there is, if there is non compliance, then the commit

0:05:00.400 --> 0:05:04.279
<v Speaker 1>may intervene, but it will not it will not issue

0:05:04.320 --> 0:05:07.240
<v Speaker 1>a formal approval decision. All right, Well, our thanks to

0:05:07.279 --> 0:05:10.240
<v Speaker 1>Thomas Graff, a partner at Clary Gottlieb, who joined us

0:05:10.240 --> 0:05:13.400
<v Speaker 1>from Brussels to talk about Google spinning off its shopping

0:05:13.400 --> 0:05:16.040
<v Speaker 1>services in the European Union into a separate company