How EU’s Google Fine Explains High Cellphone Costs in the US

Posted by The New York Times

How E.U.’s Google Fine Explains High Cellphone Costs in the US

By Luigi Zingales

The knee-jerk reaction to the European Union’s decision to fine Google US$5.1 billion is to blame the Europeans. How can it be possible that in Europe the antitrust authorities determined that Google abused its dominance in the smartphone market when in America it did not?

It’s not the first time. Just last year the European Commission (the administrative arm of the European Union) fined Google US$2.8 billion for unfairly favoring its comparison-shopping service in the search engine market, a charge that the American Federal Trade Commission had dropped a few years earlier. Is this the first salvo in an incoming trade war or a form of tax-thy-neighbor policy?

It would be both wrong and dangerous to just blame the Europeans. Wrong, because there is reliable evidence that the European Commission does not target American companies: It is just as tough with all firms, including domestic ones.

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