Why Turkish regulators have become such a problem for Google

Type “running shoes”, “best laptop” or “camping gear” into Google from just about anywhere in the world and the top of the screen will d...


Type “running shoes”, “best laptop” or “camping gear” into Google from just about anywhere in the world and the top of the screen will display a carousel of ads from leading websites. promoting products to browse and compare.

Not in Turkey. Google removed the ads last year after Turkish antitrust authorities ordered the company to allow competing merchant sites to appear more easily in ads.

Turkish demands have gone further to crack down on Google’s shopping service than any other global regulator has done so far. But that was not all. In April, officials across the country made yet another bold move, saying the company’s lucrative search function to find local destinations like “nearby pharmacy” violated antitrust laws, a one-of-a-kind move that also challenged question the future of this service.

The tension between Turkey and Google reflects how growing animosity towards the Silicon Valley giants arises even in places, like Turkey, with little history of antitrust enforcement against the industry. The efforts threaten to upset the conditions – an open global Internet and light government regulation – that have helped fuel the growth of these companies over the past two decades. In their place could be a chessboard of laws and regulations, where the products and services available depend on where a person goes.

Google has been a constant target. This month, the French competition authorities a fine to google 500 million euros, or $ 593 million, for failing to negotiate in good faith to reach a license agreement with newspaper publishers to use short blurbs of articles in search results. Last month, Indian competition authorities opened an investigation into allegations that Google used its dominant position as the owner of the Android mobile operating system to give itself an edge in the smart TV market.

In May, Italian antitrust authorities fined Google € 102 million for blocking an electric vehicle services app from accessing its in-car Android software system.

Some attribute Google’s troubles in Turkey in part to President Recep Tayyip Erdogan’s increasingly authoritarian leadership and his efforts to wrest power from Western internet companies. But the pullback in Turkey and elsewhere is also being pushed by rivals to Google, such as Yelp. These competitors have spent years pressuring regulators around the world to be tougher than authorities in the United States and Europe, the traditional regulators of global businesses. Sometimes, as in Turkey, rivals work with governments whose policies they might otherwise oppose.

“Law enforcement officials around the world think something needs to be done, and they are not happy with what traditional centralized regimes are doing,” said Harry First, professor of law at the University. from New York.

In the past, countries focused on domestic industries because they lacked the resources or knowledge to pursue antitrust actions against large international companies, said William E. Kovacic, former chairman of the Federal Trade. Commission. But as more countries take action against Big Techs, he said, a “shared intellectual infrastructure” makes it easier to get a case done. In Turkey, the authorities relied on the findings of the European Commission.

The number of countries with antitrust laws has exceeded 130, up from 30 in 1990, Kovacic said.

“The Turkish experience is going to be important,” he said. “There will be other countries in the same situation that will say, ‘Why not us?’ “

Google, which has been successful in pushing back some earlier antitrust investigations by Turkish regulators related to online advertising and search rankings, said it cut services such as purchase announcements when changes demanded by authorities. would have made it less beneficial to users.

“We are working constructively with regulators around the world and have been able to find fact and evidence-based solutions to address similar concerns, without removing features that people and businesses find useful,” said Miguel Perez Guerra, senior competition legal counsel at Google, said in a statement. declaration.

Google rivals approached Turkish regulators in 2018 after the European Union fines Google 2.42 billion euros, or about 2.87 billion dollars today, for favoring its online shopping service over its competitors in search results. The fine was a record, but opponents of Google were furious that regulators had not forced the company to further change its practices. Google still gave preferential treatment to its shopping service, they said, reducing web traffic and visibility to their sites.

Competitor services including Kelkoo, a London-based price comparison site, told Turkish authorities that the European sanction had not restored competition. Rivals have called for more opportunities for greater visibility in Google search results, some of the internet’s most valuable real estate. The Turkish authorities complied, rejecting a more modest proposal from Google.

Opponents said Google then removed the ad boxes to avoid setting a precedent that other jurisdictions could follow, in the same way it did abandoned its information service in Spain in 2014 in response to unfavorable regulations.

“The aim was really to make sure that they could benefit from our experience in Europe and push for something better,” said Richard Stables, CEO of Kelkoo, of efforts to influence Turkey. “Turkey is generally not a huge market in value, but this could be of significant importance in showing other regulators the way forward.”

The Turkish Competition Authority has credited Google’s competitors, as well as consumer groups, for helping explain how the company has unfairly used its position as a “gatekeeper” in search and mobile software to gain an advantage. in areas such as shopping and local business listings.

The Turkish application is part of a wider campaign “making competition the norm in markets dominated by big tech,” the agency said in a statement. “Our decisions are tied to the efforts we see in the rest of the world. The antitrust agency is also investigating Facebook’s data sharing practices.

Turkey’s position as a major antitrust battleground centers on one of Google’s most important services: searches such as “open restaurants near me,” which results in an information box that refers to other Google services such as maps.

For years, Yelp has tried unsuccessfully to get regulators in the United States, European Union and Brazil to crack down on Google’s local search activity, arguing it was being unfairly suppressed.

In 2018, shortly after Turkey announced it was investigating Google’s shopping service, Yelp’s public policy chief Luther Lowe visited the capital, Ankara, for a meeting with antitrust officials. On a USB stick, he provided regulators with a copy of an earlier complaint the company had filed with the European Commission, translated into Turkish, along with other evidence. His efforts made it possible to launch an investigation.

In April, the Turkish authorities made the decision desired by Yelp. Google has violated antitrust laws, regulators said, by posting local search results that cut competitors off critical Internet traffic.

The resulting fine, about $ 37 million, was relatively small. What could happen next is more important to Yelp: In the coming months, Google must work out solutions to include competitor listings in local search results. If the proposed fixes do not satisfy regulators, another showdown could follow, confronting Google with the choice of offering further changes or shutting down the service.

Given Mr Erdogan’s track record against Google’s YouTube – he temporarily blocked access in 2007 and 2014 – many question Turkey’s motives in antitrust cases.

The country’s antitrust agency said its actions against Google were not political, and some legal experts said they respected the regulator’s independence. But Mr Erdogan has tightened his grip on government bureaucracy. Last year Turkey adopted a law to regulate content on social media, targeting YouTube, Facebook and Twitter. Critics of the move saw it as an attempt to tighten control of information and stifle dissent.

Atilla Yesilada, an investment analyst specializing in Turkey, said the antitrust board has become more politicized in the past two years and is following government priorities. Others said that while the regulator was seen as better than other institutions in Turkey, none were fully independent.

An Istanbul lawyer representing Google, Gonenc Gurkaynak, said that although Turkey has gone further than other regulators, he does not believe the antitrust rulings are linked to other government regulatory efforts. “We did not observe any connection,” he said.

Yelp’s Mr Lowe, who has spent more than a decade urging regulators to act against Google on local search, acknowledged Turkey’s uneven political environment, but said the antitrust agency was acting independently . Disappointed that other governments have not acted on Yelp’s complaints, he said Turkey could provide an important example of how strict enforcement could force Google’s services to change.

“This is the first real chance we have for success,” Lowe said of Turkey. “This is the goal I have set myself all the time.”

Carlotta Gall contributed reports.

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