Saturday, August 8, 2015
Taiwan Fair Trade Commission Closes Investigations Into Allegations that Google Abused Dominant Position
As reported by PaRR and Bloomberg, the Taiwan Fair Trade Commission (TFTC) announced at its July 22, 2015 meeting that it has closed both of its investigations into allegations Google engaged in anticompetitive conduct. The TFTC was said to have focused its investigation on two different issues – one was related to search, the other, much later, was related to Google’s Play Store. The TFTC initiated its investigation into Google’s practices in connection with search in 2012. The multi-year investigation focused specifically on the issue of whether Google’s practice of showing a Google Maps result in response to certain search queries was a form of improper "search bias." In 2015, the TFTC opened a second investigation into Google’s conduct in the market after the media application provider FREEdi YT complained that Google was abusing its dominance in the market by removing FREEdi YT’s application from Google’s Play Store. As the TFTC concluded, neither the search nor Play Store allegations had any merit.
Like other competition authorities and courts in the U.S., Brazil, and Germany, the TFTC’s Vice-Chairperson, Chiu Yung-ho, said the agency concluded that "[i]t is difficult to determine there is a violation of the Fair Trade Act based on the evidence on hand."
TFTC Search Allegations Analysis: Not much information is available regarding the TFTC’s analysis and findings related to the allegations against Google, and the TFTC did not issue a closing statement. Nonetheless, Vice-Chairperson Chiu’s statement to PaRR provides some insight : "Our investigation shows that this [search display] practice could be seen as providing convenience to users and in line with users' benefits." This comment suggests that the TFTC’s mode of analysis was to investigate whether Google’s practice of including Google Maps results for certain queries enhances value to consumers. PaRR reported that Vice-Chairperson Chiu also noted that, "[i]t’s hard to say it’s anticompetitive [Google’s product design as to search] and adopt the refusal to trade concept in this case."
The TFTC’s decision follows a long line of similar decisions and is well-supported. For example, in 2013 the FTC found that Google’s "primary goal" in including its own content in search results was "to quickly answer, and better satisfy, its users’ search queries by providing directly relevant information." The FTC determined then that Google’s product changes were designed "to improve the quality of its search results." Vice-Chairperson Chiu’s statement to the press seems to reflect a similar analysis.
The TFTC’s Decision in Context: The TFTC’s revealed enforcement priorities--having pursued enforcement actions against U.S. technology companies such as Apple, and Intel--show that it is interested in taking an aggressive approach to enforcement. The TFTC’s decision to close its investigation into Google’s search practices suggest that it may be learning, like many competition agencies before it, that in fast moving technology markets, the best way to encourage local innovation is to allow healthy markets to do their work, rather than pursuing a regulatory enforcement agenda. As the US FTC concluded, "[c]hallenging Google’s product design decisions in this case would require the Commission – or a court – to second-guess a firm’s product design decisions where plausible procompetitive justifications have been offered, and where those justifications are supported by ample evidence." The TFTC’s decision to close its multi-year investigation without action, adds it to the growing list of enforcement agencies that have done the same, and leaves the EC as an outlier.
Concluding Thoughts: The TFTC has been an aggressive enforcer on antitrust-high tech issues and has found wrongdoing in cases against Microsoft, Intel and Apple. Closing an investigation against Google suggests that the TFTC’s decision is an important one.
Note: In addition to my full time law professor job, I am part time Senior Of Counsel at Wilson Sonsini Goodrich & Rosati. The firm does work for Google but I was not involved at all in the Taiwan case.