Why Turkey’s Regulators Have Been Such a Problem for Google


Google “running shoes”, “best laptop” or “camping gear” from almost anywhere in the world and a series of ads are shown above the fold from websites promoting products to browse and compare.

Not in Turkey. Google removed these ads last year after Turkish antitrust officials ordered the company to make competing shopping sites appear more prominently in ads.

Turkey’s demands went further to crack down on Google’s shopping service more than any global regulator up to that point. But that wasn’t all. In April, country officials made another bold move, saying the company’s lucrative search function to find local places like “nearby pharmacy” violated antitrust laws, a first-of-its-kind decision that also questioned the service’s future.

The tension between Turkey and Google reflects how growing hostility to Silicon Valley giants has emerged even in places like Turkey, where there is little history of antitrust enforcement against the industry. The effort threatens to undermine the conditions that have helped fuel the growth of these companies over the past two decades – an open global internet and light-touch government regulation. In their place, laws and regulations can be a checkerboard, where available products and services depend on where a person is logging in.

Google has been a constant target. This month, French antitrust authorities fined google €500 million or $593 million for not negotiating in good faith to reach a license agreement with news publishers to use short white papers from articles in search results. Last month, Indian competition authorities launched an investigation into allegations that Google is using its dominant position as the owner of the Android mobile operating system to give itself an edge in the smart television market.

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

Some attribute Google’s troubles in Turkey in part to President Recep Tayyip Erdogan’s increasingly authoritarian leadership and efforts to seize power from Western internet companies. But the pullback in Turkey and elsewhere is also encouraged by Google’s competitors like Yelp. These rivals have spent years lobbying regulators around the world to be tougher than those in the United States and Europe, the traditional powers to regulate global businesses. Sometimes, as in Turkey, competitors work with governments whose politics they would otherwise oppose.

“Practitioners from around the world feel that something needs to be done and are dissatisfied with what traditional centralized regimes are doing,” said Harry First, a law professor at New York University.

William E. Kovacic, former chairman of the Federal Trade Commission, said that in the past countries have focused on local industries because they did not have the resources or knowledge to initiate antitrust action against large international firms. But as more countries take action against Big Tech, he said, a “common intellectual infrastructure” makes it easier to pursue a case. Officials in Turkey relied on the European Commission’s findings.

Mr Kovacic said the number of countries with antitrust laws has increased from 30 in 1990 to 130.

The Turkish experience will be important,” he said. Similarly positioned and ‘Why not us?’ There will be other countries who say so.”

After successfully fending off some past antitrust investigations by Turkish regulators into online advertising and search rankings, Google said it removed services like shopping ads if the changes requested by the authorities became less beneficial to users.

“We’re working constructively with regulators around the world, and we’ve been able to find fact- and evidence-based solutions to address similar concerns, but we’ve been able to remove features that people and businesses find useful,” said Miguel Perez Guerra, senior competition advisor at Google. Declaration.

Google’s rivals went to Turkish regulators in 2018 European Union fines Google €2.42 billion, worth about $2.87 billion today, as it prefers the online shopping service over its competitors in search results. The fine was record-breaking, but Google’s opponents were outraged that regulators didn’t force the company to change its practices further. They said Google still gives the shopping service a preferential treatment by reducing web traffic and the visibility of its sites.

Competing services, including Kelkoo, a London-based comparison shopping site, told Turkish officials that the European penalty did not restore competition. Competitors wanted more opportunities for greater visibility in Google search results, one of the internet’s most valuable real estate. Turkish officials complied, rejecting a more modest Google proposal.

Opponents said Google later removed the ad boxes to avoid setting a precedent that other jurisdictions could follow. Downgrades its news service in Spain In response to negative regulation in 2014.

“The goal was to make them benefit from our experience in Europe and strive for something better,” said Richard Stables, Kelkoo’s CEO, regarding their efforts to influence Turkey. “Turkey is generally not a huge market in terms of value, but it could be of significant importance in guiding other regulators forward.”

The Turkish Competition Authority thanked Google’s competitors and consumer groups for helping explain how the company unfairly used its “watchdog” position in search and mobile software to gain an edge in areas such as shopping and local business listings.

The Turkish sanction is part of a broader crackdown that “makes competition the norm in big tech-dominated markets,” the agency said in a statement. “Our decisions are related to the efforts we observe 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 focuses on one of Google’s most important services: searches like “restaurants near me are open” result in an infobox that links to other Google services like maps.

For years, Yelp tried to persuade regulators in the United States, European Union and Brazil to go after Google’s local search business, arguing that it was unfairly cut.

In 2018, shortly after Turkey announced that it was investigating Google’s shopping service, Yelp’s head of public policy, Luther Lowe, flew to the capital, Ankara, for a meeting with antitrust officials. On a flash drive, it provided regulators with a Turkish-translated copy of a previous complaint the company made to the European Commission and other evidence. His effort helped start an investigation.

In April, Turkish authorities handed over the ruling Yelp they wanted. Regulators said Google was breaking antitrust laws by displaying local search results that cut competitors from critical internet traffic.

The resulting fine, roughly $37 million, was relatively small. More important for Yelp is what happens next: In the coming months, Google should identify remedies to include listings of competitors in local search results. If the proposed fixes do not satisfy the regulators, another reckoning may follow, leaving Google with the option to propose additional changes or shut down the service.

Given Mr Erdogan’s history against Google’s YouTube – temporarily blocked access in 2007 and 2014 – many question Turkey’s motivations in antitrust lawsuits.

The country’s antitrust body said its actions against Google were non-political, and some legal experts respected the regulator’s independence. However, Mr. Erdogan has tightened his control over the government bureaucracy. Last year, Turkey accepted a law that regulates content on social mediaIt targets YouTube, Facebook and Twitter. Critics of the movement saw it as an attempt to tighten control of information and stifle dissent.

Atilla Yesilada, a specialist investment analyst in Turkey, said the antitrust board has become more politicized over the past two years and is following the government’s priorities. Others said that while the regulator is considered better than other institutions in Turkey, none are completely independent.

Gonenç Gürkaynak, a lawyer representing Google in Istanbul, said that although Turkey went further than other regulatory bodies, he did not believe the antitrust decisions were related to the government’s other regulatory efforts. “We did not observe any connection,” he said.

For more than a decade, Yelp’s Mr. Lowe, who has urged regulators to take action against Google over local search, acknowledged Turkey’s unstable political landscape, but said the antitrust agency was acting independently. Disappointed at the failure of other governments to act on Yelp’s complaints, he said Turkey could provide an important example of how stringent sanctions could force Google to change its services.

“This is our first real chance to succeed,” Mr. Lowe said of Turkey. “This is the goal I set out to do the whole time.”

carlotta gal contributing reporting.


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