Germany’s Federal Cartel Office Said Google Inc (GOOGL) Did Not Abuse Its Market Power Versus News Publishers

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According to an article by Reuters, a German regulator decided on Friday in favour of Google Inc (NASDAQ:GOOGL), by refusing to pursue a complaint brought against the company by a group of publishers for giving users access to their news articles.

The German publishers thought that Google Inc (NASDAQ:GOOGL) is abusing its market power and brought a complaint to the “Bundeskartelamt” – Federal Cartel Office, Germany’s national competition regulator. The federal Cartel Office thought otherwise, and even warned publishers, according to the German newspaper Frankfurter Allgemeine Zeitung.

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The competition regulator stated in a press release:

“The starting points for a behaviour by Google Inc (NASDAQ:GOOGL), which is eventually relevant for anti-trust law, are being based partly only on speculation. The actual reason for the complaint remains unclear.”

The Bundestag, a constitutional and legislative body in Germany, enacted in last year ancillary copyright law for publishers, on their initiative. Publishers complained that Google Inc (NASDAQ:GOOGL) makes money with their content. The law envisaged that search engines have to pay money to publishers, when they publish longer extracts from the articles. The law was however much softer than the publishers lobby hoped it to be. Small excerpts consisting of “particular words and smallest text excerpts” stayed free, and the specific definition about how long the excerpts are allowed to be stayed undefined, the FAZ said.

As the law has been enacted, Google Inc (NASDAQ:GOOGL) wrote to publishers offering them two possibilities: either to explicitly allow the free use of their resources or to be removed from “Google News”. Most publishers allowed the free use. At the same time, the VG Media, organisation of German publishers, complained to the German Federal Cartel Office. Google Inc (NASDAQ:GOOGL) holds 90% of the market and abuses the power that it gives it, it said.

Andreas Mundt, president of Germany’s Federal Cartel Office, said in a statement on Friday:

“Sufficient suspicion is always necessary to initiate an abuse procedure. The complaint from VG Media did not establish this.”, Mundt said.

The cartel office said it would nonetheless monitor Google Inc (NASDAQ:GOOGL)’s reaction to publishers’ demands and launch anti-trust proceedings if warranted.

 Disclosure: none

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