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."

22 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 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.
6. 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.
7. 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.
  
  --
  Have you heard about SoylentNews?
8. 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
9. 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.
10. 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.
11. 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.
12. 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?
13. 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.
14. 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.
15. 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.
16. 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.
17. 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?
18. 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.
Re:Airbus by countertrolling · 2012-02-02 05:42 · Score: 5, Funny

Airbuses are free? I'll take two

--
For justice, we must go to Don Corleone
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.
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.