French Court Calls Free Google Maps Unfair Competition

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French Court Calls Free Google Maps Unfair Competition

Posted by timothy on Thursday February 2, 2012 @05:21AM from the protecting-people-from-benefits dept.

jfruh writes "A French court has ruled that Google is unfairly subsidizing its free mapping products, making for unfair competition with paid services. This might seem ridiculous, but keep in mind that Google started charging for use of its mapping API once the free version had come to dominate the market."

35 of 238 comments (clear)

This was predicted to happen two years ago by bonch · 2012-02-02 05:21 · Score: 5, Insightful

This might seem ridiculous
Why would it?
Microsoft was punished for pumping a market with a free product, with its development supported by revenues from a monopoly product, so that they could afford to give it away where competitors could not. If Google offers something for free, kills off its competitors who were charging for their version, and then starts charging when they're the only ones left, then the French court has a point.
Even the headline in the linked article is absurd: "French court protectionism fines Google Maps for succeeding". No, that's not what they were fined for. They were fined for what French competitor Bottin claimed would happen two years ago--Google would offer Maps for free, make their competitors go bankrupt, and then start charging for Maps once they controlled the market. That's precisely what ended up happening!
1. Re:This was predicted to happen two years ago by JoshuaZ · 2012-02-02 05:30 · Score: 5, Insightful
  
  Is Linux unfair competition for Windows because it's given away for free?
  There's no danger that everyone using Linux will have to pay Linus Torvalds to keep using it after it gains market ascendancy.
2. Re:This was predicted to happen two years ago by BradleyUffner · 2012-02-02 05:37 · Score: 4, Insightful
  
  I don't see how that's fine-worthy. That's the market working. If the consumers of those products are not smart enough to read between the lines, and recognize that building products on top of free services is a bad idea, then Google deserves the win in my book - they bought into a system where they're beholden to someone, and that someone ought to be able to monetize that situation at some point or another.
  If people get fed up with Google, and there is a demand for another service, then one will come along and fight them for it - it's not like Google didn't unseat the original kings of search by simply creating a better product.
  One of the principles of a free market is that people have perfect information and act rationally on it. If people lack information then it isn't an example of a free market working properly. So no, taking advantage of people who aren't smart enough to read between the lines is not a good example of the market working. It may be profitable, but it isn't a "free market".
3. Re:This was predicted to happen two years ago by bonch · 2012-02-02 05:38 · Score: 5, Interesting
  
  Is Linux unfair competition for Windows because it's given away for free? It's a stupid argument. If a group wants to give something away for free, let them. You can compete with free.
  That's not necessarily true. If a company is generating massive revenues from a dominant product (in this case web search advertising), using that revenue to fund development of a free product in another market can be viewed as an anticompetitive abuse of monopoly position. Competitors who don't have a source of monopoly revenues have to offset their costs by charging for their product. To make your comparison more accurate, imagine if Ubuntu supplanted Windows as the dominant desktop OS by giving away a free product, and then once all competitors were completely marginalized, began charging for Ubuntu Linux. People would have little choice but to pay because it would be the dominant OS that everything ran on.
4. Re:This was predicted to happen two years ago by NeutronCowboy · 2012-02-02 05:40 · Score: 5, Informative
  
  Still trolling, I see. A few quick notes:
  * Google doesn't have a monopoly anywhere, even in search.
  * Google Maps is not given away, it sports ads, and the API costs money to access
  * You fail to mention Mapquest, or MS maps. Why just sue Google for its maps? Because it is the best one out there?
  * Why should Bottin be kept alive? Why not Garmin?
  In short, you're wrong on two fundamental counts: that this is anything but protectionism of the most basic nature, and that somehow Google Maps is both special, and not, in the world of online map services.
  
  --
  Those who can, do. Those who can't, sue.
5. Re:This was predicted to happen two years ago by Anonymous Coward · 2012-02-02 05:46 · Score: 3, Funny
  
  Even the headline in the linked article is absurd: "French court protectionism fines Google Maps for succeeding". No, that's not what they were fined for. They were fined for what French competitor Bottin claimed would happen two years ago--Google would offer Maps for free, make their competitors go bankrupt, and then start charging for Maps once they controlled the market. That's precisely what ended up happening!
  So instead of France doing something back then, when the competitors could have made money, they waited until those competitors went bankrupt and levied a fine for their *own* profit?
  I like their business strategy.
6. Re:This was predicted to happen two years ago by pijokela · 2012-02-02 05:47 · Score: 5, Informative
  
  Still trolling, I see. A few quick notes:
  * Google doesn't have a monopoly anywhere, even in search.
  Google search most certainly is a monopoly. A legal monopoly does not require 100% market share. Companies have been deemed monopolies with under 50% share and Google is way higher then that - go google it if you don't believe me.
  Now, having a monopoly is not illegal, but using your monopoly profits to corner other markets is illegal. This is exactly the same thing that MS was convicted of a decade ago. Google it. When MS was killing Netscape it took the authorities years to act and the trial also took forever to end - Google just hasn't been doing this long enough to end in court yet.
7. Re:This was predicted to happen two years ago by HarrySquatter · 2012-02-02 05:48 · Score: 3, Informative
  
  Sorry but Google Maps was not a new product and neither was internet map services when Google acquired it. Mapquest was around since 1996 and even OpenStreetMap predates it and there were plenty of other services. But hey we gotta keep up the Google defenses!
8. Re:This was predicted to happen two years ago by Anonymous Coward · 2012-02-02 05:49 · Score: 5, Funny
  
  There's no danger of Linux gaining market ascendancy.
9. Re:This was predicted to happen two years ago by Jorl17 · 2012-02-02 05:49 · Score: 5, Funny
  
  Given the trend, we'll have to pay Microsoft for it, no matter what laws they break.
  
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10. Re:This was predicted to happen two years ago by repapetilto · 2012-02-02 05:50 · Score: 5, Informative
  
  You are confused.
  
  A free market is a competitive market where prices are determined by supply and demand.[citation needed] A free-market economy is one within which all markets are unregulated by any parties other than market participants.[citation needed] Free markets contrast sharply with controlled markets or regulated markets, in which governments more actively regulate prices and/or supplies, directly or indirectly.[1] In its purest form, the government plays a neutral role in its administration and legislation of economic activity, neither limiting it (by regulating industries or protecting them from internal/external market pressures) nor actively promoting it (by owning economic interests or offering subsidies to businesses or R&D). A free market is not to be confused with a perfect market where individuals have perfect information and there is perfect competition.
  
  http://en.wikipedia.org/wiki/Free_market
11. Re:This was predicted to happen two years ago by tripleevenfall · 2012-02-02 05:52 · Score: 5, Insightful
  
  More to the point, certainly Linux is not anywhere near making Apple or Microsoft worry but Google is. And every day on Slashdot, it seems, there's another story where Google is behaving in ways we'd expect from the nefarious Microsoft but not from our loving friends at Google.
12. Re:This was predicted to happen two years ago by Anthony+Mouse · 2012-02-02 05:54 · Score: 5, Insightful
  
  If a company is generating massive revenues from a dominant product (in this case web search advertising), using that revenue to fund development of a free product in another market can be viewed as an anticompetitive abuse of monopoly position.
  No, it can't. The source of the money isn't the thing that matters. If Warren Buffet is preposterously wealth, but has no dominant market position in anything (just a lot of money), and he decides he wants to start giving away eyeglasses for free (i.e. below cost) until all competing eyeglass makers go out of business so that he can subsequently monopolize the market, he's going to be in trouble. It has nothing to do with the source of the money used to sell things below cost.
  By contrast, Google, who wasn't selling below cost (because free + ads is profitable and therefore not below cost), wasn't doing anything wrong. They were doing exactly what competitors in a free market are supposed to do: Providing a competitive product for a low price while still making a profit. The fact that some of their competitors couldn't hack it in a market with aggressive competition is not the fault of the company offering the best product for the lowest price.
  This is made blatantly obvious by the fact that they raised their prices before they had anything close to a monopoly in the market in question. They still compete with Microsoft, OSM and others. If customers don't want to use Google Maps or decide that the higher rates are too high, they still have multiple alternatives.
  France is just butthurt that the French competitors were among those who couldn't compete.
13. Re:This was predicted to happen two years ago by s73v3r · 2012-02-02 06:04 · Score: 5, Insightful
  
  That's horseshit and you know it. Google was the dominant player in that space, period. To deny it is to stick your head in the sand and go "LALALALALALALALALA".
  And yes, Google was giving away use of Google Maps FOR FREE. Not Free+Ads, but FREE. If you were a developer, you were allowed to use the Maps API for free. And now that they have achieved a dominant market position, mainly because their API was free, they are charging for its use. That is the very definition of anticompetitive: Artificially lower your rates through subsidies from your other departments, then once you've achieved dominance, raise your rates.
14. Re:This was predicted to happen two years ago by s73v3r · 2012-02-02 06:09 · Score: 4, Interesting
  
  * Google doesn't have a monopoly anywhere, even in search.
  Maybe you should stop being a child and trying to insinuate that the only way someone can have a monopoly is by being the only actor. That's not true, and hasn't been for a long time.
  
  * Google Maps is not given away, it sports ads, and the API costs money to access
  It was with respect to the developer API, which is what the case is about. You could use that API for FREE, not free + ads. And now that they are the dominant player in the space, and one could easily say they got there because they were free, they are raising their prices. That is the very definition of anti-competitive.
  
  You fail to mention Mapquest, or MS maps. Why just sue Google for its maps? Because it is the best one out there?
  Because they're the ones with the legal monopoly.
  
  Why should Bottin be kept alive? Why not Garmin?
  Why should Google Maps get to survive by subsidies from other Google divisions? Why can't they compete on their own?
15. Re:This was predicted to happen two years ago by s73v3r · 2012-02-02 06:11 · Score: 3, Interesting
  
  Why don't you read your definition again? According to that, Google most definitely does have a monopoly in search. They are dominant in that area. And what they're getting slapped for is not for having a monopoly on search, which is quite fine, but by abusing that monopoly to edge themselves into other markets and drive out competition.
16. Re:This was predicted to happen two years ago by s73v3r · 2012-02-02 06:12 · Score: 4, Informative
  
  It became extremely popular, and is still FREE to use for anyone.
  No, it's not. Not for DEVELOPERS, which is the entire point of this suit. The Maps API used to be free. Now that they have a dominant market position, it's not.
17. Re:This was predicted to happen two years ago by Missing.Matter · 2012-02-02 06:47 · Score: 3, Insightful
  
  The way the term "free market" is used in the article is just to indicate government has no intervention or at best a neutral position. When people espouse the virtues of a "free market" they're usually talking a market where there is perfect competition. That is, the company with the best product gets the most customers, prices follow the laws of supply and demand, etc. The only way these laws actually work is if it meets several conditions, one of which is perfect information and rational buyers. Otherwise you have failures in the system and you end up with collusion, scams, monopolies, etc. Sure the government isn't involved, but it's a far cry from a properly functioning "free" market. So I think it's safe to say there is no such thing as "free" market without a perfect market.
18. Re:This was predicted to happen two years ago by Missing.Matter · 2012-02-02 07:27 · Score: 5, Insightful
  
  What gave you the idea that people think free=perfect?
  Because an imperfect free market is what we saw during the industrial revolution. When most people say they want a free market, they don't have child labor, unsafe working condition, rampant and unfettered pollution in mind. Profit-seeking entities actively try to move away from the equilibrium price predicted by perfect market economics by violating the tenants of a perfect market economy. They collude with each other, price fix, employ unsafe labor practices, pollute the environment, etc. The only reason they can do these things is because of information imbalances.
  Here's how the argument usually goes. I say "In a free market unregulated by government, companies create unsafe products. This is why we need the FDA." The free market proponent in turn says "In a free market, a competitor will enter the marketplace that does not create unsafe products, and people will buy that product instead. Thus, through the miracles of the free market, the irresponsible company will go out of business and the economy will regulate itself." But again, this does NOT happen in an imperfect free market because of barriers of entry, imperfect information, geographic conditions, etc.
  So I still maintain that when people talk about the "free market" they're talking about this ideal economy that can regulate itself without the need for government intervention. The perfect market exists on this very unstable equilibrium where if any of the assumptions are violated, you slide in the direction of a monopolistic, oligopolistic, monopsonistic, etc. market. It's not always that bad, but in the worst cases you need government intervention and thus no such thing as a "free market" without a perfect market.
19. Re:This was predicted to happen two years ago by Epimer · 2012-02-02 07:36 · Score: 4, Informative
  
  I'm don't know the specifics of French competition law, but if it's harmonised with EU competition law (like the UK is) then the point of law under which Google will have been caught out is on *abuse* of a dominant position. It's absolutely correct to say that having a large market share isn't illegal in its own right, but your behaviour once you're in a dominant position (for whatever reason) can be. Yes, this does mean that (for example) the same behaviour that you've been doing for years is perfectly legal one day and then anti-competitive the next through no fault of your own.
  Using profits gained in one market to force out competition in another definitely is illegal under EU competition law (which, as said above, I'm applying by analogy, which may be incorrect). Using it to enter a market is fine - more undertakings in a given market should ultimately be pro-competitive, to the benefit of consumers - but continuing to cross-subsidise to force out competitors can very much be illegal.
  It should also be noted that the test(s) used for establishing predatory pricing isn't set in stone as "below cost", but crudely speaking being very close to that point will create the rebuttable presumption of abuse of dominance.
20. Re:This was predicted to happen two years ago by Grishnakh · 2012-02-02 08:05 · Score: 4, Informative
  
  What the hell are you talking about? What ads? There's no ads in Google maps that I'm aware of. I use Google Maps' API on my own little website on one page plus "geoxml" to show some data; there certainly aren't any ads shown. I'm only required to show the copyright notices at the bottom of the map, saying who has the copyright for the map data or images.
  Google does use ads for their search engine product, and their Gmail product, but those are separate products and irrelevant to the maps API.
21. Re:This was predicted to happen two years ago by Bill_the_Engineer · 2012-02-02 08:34 · Score: 3, Insightful
  
  Please show me how Google has the ability to fix prices in the Search market, AND how they grow their market share in that market through means other than normal business operation. ... Note that being dominant in an area has very little to do with being a monopoly, and even less to do with monopolization of your market position.
  Google is able to provide for their many web services for free from all the advertising revenue that they earn with Google Adwords, DoubleClick and AdMob. They've pretty much cornered the advertising market with their dominate share of the search engine market and web applications. They secured their top spot with their purchases of Sprinks (2003), Applied Semantics (2003), dMarc Broadcasting (2006), YouTube (2006), AdScape(2007), DoubleClick (2007), AdMob (2009), Teracent (2009), Invite Media (2010), and Admeld (2011). This doesn't include all the other purchases of search technology companies, review sites (including Zagats), web applications, voice of IP providers, social media analytic services, and shopping sites.
  They are basically buying out potential competitors, potential technology that they can use for their advantage, or high traffic websites that would suddenly use one or more Google advertising subsidiaries.
  This is similar to the tactics used by Microsoft in the late 80's early 90's to secure their dominate position.
  
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22. Re:This was predicted to happen two years ago by Missing.Matter · 2012-02-02 08:51 · Score: 5, Insightful
  
  Are you seriously not getting this? Google Maps API was introduced into the market free of charge to everyone. Customers who used to pay companies like Bottin Cartographes for their map service switch to Google Maps since it's free. After stealing marketshare and customers, in October 2011 Google begins charging for its service. How is this not textbook antitrust?
23. Re:This was predicted to happen two years ago by Grishnakh · 2012-02-02 10:33 · Score: 4, Insightful
  
  It's a pretty big stretch to call a company logo an "advertisement". If that were the case, then why do TV networks carry ads for other companies? Why don't they just put their own logo everywhere, and advertise themselves only?
  Expecting tons of people to click on a Google logo on a website's embedded map is a bit silly.
24. Re:This was predicted to happen two years ago by symbolset · 2012-02-02 16:19 · Score: 3, Insightful
  
  Oh boo fricken hoo. I remember when Google was trying to pay these map weasles for access to their map data, but they wouldn't let Google use it for what they wanted at any price. They were a bunch of jerks and you couldn't post a hand-drawn map to your yard sale but they'd threaten to sue you for IP theft. They were relics holding onto rent-seeking behaviors and holding back progress. So in 2004 Google bought Keyhole and Where2 and a bunch of other assets and liberated the map data. And now those jerks are out of business, or going there. Cry me a fucking river.
  
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Loss Leader by Aladrin · 2012-02-02 05:35 · Score: 3, Insightful

Are they going to make all loss leaders illegal? Seems to me it works the same for everyone, regardless of the industry.

--
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
1. Re:Loss Leader by DaveGod · 2012-02-02 06:19 · Score: 3, Insightful
  
  A loss-leader is where the long term strategy is to have one product/service always being sold at a loss (or anyway "not enough" profit), in order to attract custom to a profitable product. An example for a manufacturer is razors (money's in the blades), an example of an outlet is milk (money is in the other stuff the customer picks up).
  The argument is more that Google is using penetrative pricing. This is where you have a short term strategy to introduce a product/service at a loss in order to gain a foothold in the market, whereupon you can raise the pricing to competitive levels.
  Penetrative pricing pricing becomes uncompetitive when the objective isn't to gain just a foothold, but to dominate the market. Regular penetrative pricing increases competition in the market over the long term while monopoly abuse decreases it. One indicator, not definitive, that the line has been crossed is when the amount of losses being racked up is so disproportionate that monopoly rents would be required to obtain a reasonable return on all that financing.
  This is also why the charge tends to apply to existing companies moving into a new market and not a new up-start. If an up-start can obtain that kind of financing then the incumbents and other up-starts should be able to find it too - it's all just an action of a free and competitive market. Google on the other hand can throw so much resource at something that economic principles of "free" or "competitive" market forces do not apply.
Re:Airbus by countertrolling · 2012-02-02 05:42 · Score: 5, Funny

Airbuses are free? I'll take two

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True depending how you consider the whole issue by Rotten · 2012-02-02 05:45 · Score: 5, Informative

As somebody working on the remote sensing/mapping/gis field for 10+ years. I tend to agree.
It's a long debate, but clearly the new concept of "paid api" it's confusing.
I perceived gmaps as a free tool in the beginning, but now, as they charge, it's no longer a tool, but a competitor.
Many hi definition data available "freely" on google maps/google earth, it's the result of a private customer paying for that data, and the by some weird agreement between the companies that run the satellites and google, the information ended up "FREE" on google maps.
A real life story:
I paid 250+K for 1 meter imagery (ikonos) for a project that was covered in google maps using old 30m imagery (90's landsat). Months later google has the 1m coverage i ordered and paid for, available for FREE to anyone else.
So i'm not only competing against google, but against people who no longer needs to order a quality work, since now it's there FREE.
Duh! That's certainly UNFAIR.
Is everything you wish were different unfair? by ScentCone · 2012-02-02 06:13 · Score: 3, Insightful

Duh! That's certainly UNFAIR.
If you meant that a huge publicly traded company under enormous scrutiny somehow directly or through arrangements with other people violeted contracts to which you were a party, then, sure. But you don't seem to be saying that. You seem to be saying that the marketplace has changed, and that you wish it hadn't.

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OpenStreetMap by b0bby · 2012-02-02 06:22 · Score: 5, Informative

If you want a really free map source, try openstreetmap.org & some of the apps which use their maps. Still a work in progress, but much improved over even a year ago. If every geek on /. cleaned up their neighborhood map it would be better than the paid maps - I've certainly added features like weird one way streets and things around me which don't show up on commercial maps.
Is network TV, or Radio, free? by walterbyrd · 2012-02-02 06:38 · Score: 3, Insightful

If something is supported by advertisements, is it "free?"
What about Mapquest, and others? by walterbyrd · 2012-02-02 06:42 · Score: 3, Insightful

Other free map services were around for years before google maps. Why weren't they monopolies?
Google may be dominate, but that does tie anybody to google. I can easily switch to another free map service.
Maporama by DrXym · 2012-02-02 07:10 · Score: 3, Informative

A French company called Maporama was producing free maps before Google Maps ever turned up. It was like Mapquest for non US destinations and pretty decent for it too. The innovation Google brought to maps was you could interactively drag them around rather than the clumsy d-pad style controls that most map sites including Maporama used. So I don't really buy the idea that free was anticompetitive because it was entering a market where free was the precedent already.
Re:Slashdot is dead by Bucc5062 · 2012-02-02 07:12 · Score: 3, Informative

Where I to still have mod points I'd try to get rid of the troll score. You make some valid points. I do wish folks would stop with the "I know I'll be modded down" statements though, it is self serving. Modded up or down, speak your peace and don't tell the world what it may do.
I've been with /. since the mid 90's (skulker at first, joined later) and I do see a trend of less open discourse, more childish rantings, and news that does seem skewed. With that said, it still has good comments I can learn from, it still tends to have more thoughtful comments then other places, and generally the mod system works (see point above).
As to the topic on hand, I agree fully that Google's actions are not in line with their original foundation. This is what happens in the life cycle of business. A great book I read years ago was Titled "From barbarian to Bureaucracy", which talked about the process of business from innovation to fossilized monolith. Once Finance becomes the controlling interest of a company the origins are swept away.
What's started to concern me is that within the tech realm, three companies have reached a point where they are the controlling factor for information access and dissemination. Google, Twitter, and Facebook. While they may be minor offshoots, these three control a massive majority of personal data, communication, and information. We now see Google and Twitter complying with countries to limit access to information. Was there a point they might have said "go suck it"? Now its about money and since governments are all about money, control, and power, can we trust one company to search, to twit, or to organize?
The argument may be that the market will adjust. If Google gets to evil, if it gets to chummy with governments people will go to another search engine or map function....yet where are they? The one attempt to Open Source Facebook is a failure due to social inertia and I would suspect that Google's recent now you pay approach is based on the basic fact that they hit market saturation. So let me go one step further and consider that the World Wide Web (www) is no longer what was originally imagined, but has become a tool for manipulation of societies by government and corporate interests and not the other way around. Innovation, that which created Google, Facebook, and twitter is either dead or dying. Smothered by patent law, IP overkill, and simple greed.
Well, have a good day.

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