French Court Fails Digital Economics; Claims Free Google Maps Is Illegal

from the yeah,-google's-going-to-jack-up-the-price? dept

Three years ago, we wrote about Bottin Cartographes, a French mapping company, suing Google because Google offers its Google Maps product (mostly) for free. Bottin argued that this was unfair competition, and suggested that it was a version of dumping — whereby Google was giving away the product to intentionally wipe out the competition, at which point it would raise prices. Amazingly, an economically clueless French court has now agreed, and told Google to pay a fine and damages for its nefarious practice of giving away a product “for free.” This is, to put it mildly, ridiculous. Is there any example of Google first wiping out all competition in a market with a free product… and then suddenly jacking up its prices? Yes, Google recently started charging for those who uses its mapping API a lot, but there’s nothing, whatsoever, to suggest that the use of free here is somehow an anti-competitive move, rather than just a recognition of a wider strategy. In the meantime, if Google offering free maps in France is somehow illegal, you have to wonder what they think of a project like OpenStreetMap?

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Comments on “French Court Fails Digital Economics; Claims Free Google Maps Is Illegal”

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95 Comments
Falindraunsays:

Re: If I was Google...

I would stiff the court on the fines on the basis of jurisdiction. Where does france get off thinking they can fine an american company (unless google has offices in france). Then replace the google maps product on their site with a copy of the lawsuit and an explanation of why google maps is no longer being offered in france.

Anonymoussays:

Re:

Apparently so. Which brings up one more issue, in a age where nobody needs to pay for maps, people still do. You’d think they would be happy they’re still relevant in this futuristic age. Instead of adapting to meeting that different set of consumer needs of the people paying them money, they decide they follow the advice of greedy lawyers looking for money. Oh well, I guess copyright lawyers need more money from legacy industry.

Anonymoussays:

Your report is inaccurate. Please read the judgement, then report it again. Thank you.

In French:
http://www.numerama.com/magazine/21483-google-condamne-en-france-une-tres-bonne-decision.html

Actually, Google has been fined because Google Search has a monopole in France and because Google Maps is too much promoted by Google Search, therefore creating an unfair advantage. Gratuity enters the equation, because with its research monopole and the ads money, Google can make Google Maps free and, once again, has another “unfair” advantage.

DanZeesays:

Re: Monopolies

Actually a lot of people think monopolies increase prices, but in the Standard Oil case, Rockefeller kept prices on gas and oil low to keep out competitors. Microsoft kept the price of Windows low for years to keep out competitors, and raised prices when there were actual competitors (Apple, Red Hat, etc.). Like Google, monopolies can often keep prices low because being large, they’re more efficient. Standard Oil was broken up into 34 different companies, including Exxon and Mobil, which raised operating costs and raised prices (and also made Rockefeller much richer than if the company was kept together).

PaulTsays:

Re: Re: Monopolies

“Microsoft kept the price of Windows low for years to keep out competitors, and raised prices when there were actual competitors (Apple, Red Hat, etc.).”

Erm, what? The list price of XP Pro was $299 ($199 upgrade). The list price of Windows 7 is exactly the same, 10 years later, with many ways to get extra discounts.

Ninjasays:

Re:

Srsly? They can add a lot of value to their maps. Offer layers of geo information, specific regional maps with a plethora of information that Google alone can’t offer or it isn’t that easy to find.

You can compete, it just takes more effort. The company just succeed in making a fool of itself and the French courts have just succeed in making yet another fail of themselves.

Ninjasays:

Re: Re: Re:

That.

I should clarify that boosting their own maps in the results could be a bad thing but can they return location results on the French company maps? I mean, is it a matter of PROMOTING their service if you look for maps or use their own maps to point out location searches?

Bing has its own maps too, I take it the company is suing Microsoft too?

Chargonesays:

Re:



so Google advertises one of it’s products using a different one of it’s products, both in arenas where it does not, in fact, have a monopoly?

there are other search engines.
there are other sources for maps.

it’s the Internet.

now, they may be the only company bothering to do searches In French (… and seriously, if your solution to that is to make the situation such that they would want to stop doing so, you’ve got problems), but that’s not the same thing as being the only search engine available In France. (well, unless Microsoft etc have decided to be incredibly stupid and cut off their service there when i wasn’t looking, which seems unlikely.)

so, yeah, i can see the point that some of the details in the article may be wrong… but the situation isn’t any less stupid for it.

theangryinternsays:

Re:

Wait, so how exactly does Google Search have a monopoly in France? There are probably at least a dozen other search engines available people can use. Google just happens to be one of the better ones and is the one most people use. There is absolutely nothing stopping the citizens of France from using Bing or Yahoo or Alta Vista or Ask Jeeves or Ask.com, etc, etc, etc…

Betasays:

Re: Re:

To be fair, it’s not that Google Search has a monopoly, it’s just that Google Search dominates the market, and makes Google Maps more useful, thereby helping Google Maps to prosper in its own market.

The court considers this situation intolerable, but any particular way of “improving” it will probably be unsatisfactory if it doesn’t work and illegal if it does.

Anonymoussays:

Textbook exmple of dumping

Comparing the economics of Google maps and openstreetmap is misleading and unethical journalism.

OSM is and will always be free (as in freedom, not only in price) while Google offered their service for free only to break competition and dominate the market, and are now charging for it, that is a textbook example of dumping.

MAJikMARCersays:

Re: Textbook exmple of dumping

Obviously there IS still competition and if Google is now charging others now have an opportunity to compete.

Hey I’m all for supporting the little guy but if Google’s product is superior, regardless of the price, and consumers are being well served I fail to see the problem.

Additionally Bing and even MapQuest are still in use (can’t speak for use in France so my point may be bunk) so Google Maps has competition.

Maybe some smaller, traditional map makers may be failing but that’s due to the change in technology. Evolve or die. To me this case is no different than the old guard media companies complaining about how the Internet is destroying (really just changing) their market.

Nom du Claviersays:

Re:

The PIAA – Pizza-bakers Association of America – has already initiated lawsuits against purveyors of frozen pizzas. It’s also considering filing suits against recipe websites, because it’s clearly a travesty for people to download pizzas for free.

… or something.

On a more serious note I wonder how gas stations will cope in an ever more plugged-in world. Will they too start suing electric/hybrid car manufacturers and charging stations left and right?

You got it wrong

If I may, I think Techdirt got this one wrong.

The French court has not sentenced Google for offering a free product. It is actually a very subtle judgement that is quite hard to explain but let me try.

The judge said that Google made an unfair use of its highly dominant position (90 % of the search market in France) to crush competition, and that it could not have offered its Google Maps API for free if it was not because of how it planned on using the information on the very markets it has a highly dominant position upon (search and online ads).

OpenStreetMaps is perfecly ok, because it does not use a dominant position on a market to crush competition on another market.

Google Maps would have been ok, if it was not so tightly tied to the entire Google services. For instance, when searching for “plumbers in Paris”, Google Maps competitors are 900 pixels below the top of the page, which is all dedicated to Google services. In France, where Google has 90 % of the search market, it is viewed as an abuse of its position.

French readers can read my comments here :
http://www.numerama.com/magazine/21483-google-condamne-en-france-une-tres-bonne-decision.html

silverscarcatsays:

Re: You got it wrong

Hmm, perhaps, but I wonder, what is Google supposed to do?

Not offer a map service in France?

People in France would complain (someone would likely sue Google over this too) about the fact that every OTHER country gets a Google Maps service, but not them.

Google’s in a catch-22 here.

Damned if you do (putting the maps up for free), damned if you don’t (don’t let people see the maps)

Anonymoussays:

Re: Re: You got it wrong

One of the issues is that, with such a dominant position in the market, Google offering other “free” products on their search site can be taken as an unfair advantage.

Google’s success is search is their real problem for other businesses, as it gives them too much of an advantage already in visibility. Add in using their cash rich coffers to support otherwise unworkable business models, and you can see how the French courts got it right.

PaulTsays:

Re: Re: Re: You got it wrong

The difference there, of course, is that you don’t have the lock-in that other industries might force. Every single thing that Google offer has a direct competitor, and they’re not even the most dominant player in most of their fields. In fact, many of them can be seen as abject failures.

Google’s dominance can get people to try their products first, but they don’t force them to use inferior solutions if they don’t wish.

Almost Anonymoussays:

Re: You got it wrong

“””The judge said that Google made an unfair use of its highly dominant position (90 % of the search market in France) to crush competition, and that it could not have offered its Google Maps API for free if it was not because of how it planned on using the information on the very markets it has a highly dominant position upon (search and online ads).”””

Essentially, you are saying that Google is being punished for being successful. If they only had 30% of the search market, everything would have been fine, right? So it’s all Google’s fault for being a good search engine! It all makes sense, Google just needs to degrade their quality, thank you France for clearing that up for us!

Anonymoussays:

Re: You got it wrong

I don’t know how you can think that is a sane argument. You see Google Maps when searching for “plumbers in Paris” on Google because Google recognizes that a map is a useful result to return for a search like that. It’s the same reason you’ll see some Google Image search results if you do a text search for something like “dog photos.”

Would anyone be complaining if Google Maps didn’t exist as a separate product, but was just a “type of Google search?”

Brendansays:

Re: You got it wrong

  1. What does it mean to crush competition? Is not the existence of OpenStreetMaps proof that such competition exists? Must a company be penalized simply for being the most successful?
  2. You seem to assume that Google pushes its Map results to the top artificially. Have you considered that this may be the natural ranking for those results based on user feedback of relevancy? If users find google maps results most useful, why should google display anything different?
Anonymoussays:

so you admit, they push thier product hard, then they have started charging for it

“”Yes, Google recently started charging for those who uses its mapping API a lot, but there’s nothing, whatsoever, to suggest that the use of free here is somehow an anti-competitive move, rather than just a recognition of a wider strategy.””

so they pushed it to somehow make it a standard, then start charging, sounds like dumping and unfair practices, which you admit to, but don’t accept, the court accpeted it

Anonymous Cowardsays:

OT: Leaked IFPI letter to the European parliament calls the protests against ACTA "attempts to silence the democratic process"

http://www.iptegrity.com/index.php/acta/744-ifpi-accuses-protests-silence-democratic-process

A lobbying letter, attributed to the IFPI, the international arm of of the recorded music industry, and circulated by a coalition of rights-holders, attempts to wear the mantle of the moral high-ground in Europe?s political battle over ACTA. This wolf in sheep?s clothing also appears to have access to documents which have been denied to civil society.

The letter, leaked to IP-Watch, is signed by a range of rights-holder lobbying groups, including the European Publishers Council, the British Video Association, the Dutch collecting society BREIN, GESAC, IRMA, and the BPI. The European Publishers Association has the distinction of having James Murdoch, son of Rupert, on its board. It is being sent to members of the European Parliament, as well as to Ministers in national governments. It is believed that IFPI authored the letter.

The letter accuses the citizens protests of ?silencing the democratic process?.

Anonymoussays:

I sent the following email to the company and France. I am expecting a response anytime now:

On your website, Bottin Carto proclaims:

“Bottin Carto’s keys to success: its drive to innovate, constant adaptation to the market, and multi-channel approach, together with a team that shares the same personalisation-oriented culture.”

I’m curious how the company can maintain this position given that it maintained a successful suit in France against Google for daring to offer a more competitive (i.e. – FREE) product. More specifically, how can Bottin Carto maintain in good faith “its drive to innovate” and “constant adaptation to the market” given the nature of the litigation?

DISCLAIMER [albeit a snide one]: Aside from using the free email account and the other truly innovative services Google offers, I have no affiliation with the company. I just happen to have been reading about this story and was bothered enough by it as to be compelled to offer you this: I see right through that cloud of bullshit.

P.S. – Although I’m an American that’s never been to France or even Qu?bec (which, by the way, sounds like an awful place – don’t forget Celine Dion), I do begrudgingly insist on the French pronunciation of my surname.

Anonymoussays:

See Mike, for all your education and experience, you completely and totally miss the point.

What Google does with Maps (and many of it’s other services) is that it gives them away for nothing (aka dumping) without any expectation of direct return. Google Maps, as a stand alone business, would never exist. Without another very profitable business (advertising), Google could not offer the services.

It is only recently that Google has started to put ads on the MAPS product… and even then, they allow embedded use without ads.

What the French court is concerned about is that Google is using it’s incredible dominant position in online advertising to finance attempts to take over other markets, pushing local incumbent companies out, and doing so by using their significant income from other businesses to finance this dumping of product.

It should be noted too that with it’s dominant position in social media videos, Youtube has suddenly cranked up the advertising to a painful level (one video ad per 3 videos on average, a lower third ad on pretty much every video, and at least 1 sometimes two ads in the related video column). It is clear from this angle that Google may intend to use the free product dumping to wipe out competition, and then turn around a coat it over with advertising to make money back.

In many countries, this sort of product or service dumping is illegal, considered “disloyal competition” or something similar.

I would say Mike that this is a case where you need to block off the American part of your brain and accept that other countries work under different legal and business systems.

Anonymoussays:

Re:

I don’t think the article is suggesting that the court got it wrong under French law. I think the article is suggesting that French law got it wrong in terms of economics. Personally I agree, the law does get it wrong. Monopoly or dominant market position or whatever you want to call it is absolutely and unequivocally only a bad thing if it’s bad for consumers, the competition is irrelevant. Competition is an inefficiency we tolerate under the premise that doing so nets a better result and usually it does. When it does not, however, there is no reason to cling to it.

proximity1says:

Re: Re:

You and others here defending Google’s position should ask yourselves:

“Is there ever a valid case of unfair competition? If so, under what conditions would I admit that some behavior constituted unfair competition?”

So far, I haven’t seen anyone here who is deriding the french court’s ruling explain :

how, if it were in fact the case that Google used its overwhelmingly dominant position in the search-engine market to unduly suppress the ranking and appearance of others–they, being competitors in certain so-called “free” “services” “offered” by Google –that this would not or should not constitute an unfair business practice (in the above, certain words appear in quotation marks to indicate their truly absurd character when applied in their ususal ordinary everyday sense to the world of Google-opoly);

or how we’re supposed to know that the page ranks just happen to fall out that way—just trust the very kind, generous and eminently fair people at the multibillion-dollar industry which is Google, and which happens to make a fabulously rich living by determining the search-results order for millions upon millions of individual’s searches–often (always, isn’t it?) in ways that directly influence Google’s bottom-line.

The case turns upon issues of market dominance and unfair–think “abusive” —use of market position.

Can anyone explain these other than by resorting to cute “cheese-eating surrender monkey” comments?

P.S., by the way, that phrase became infamous at the run-up to Bush/Cheney’s war on Saddam Hussein’s Iraq. Recall, that the french people and govt. of the time tried to tell the U.S. govt and people that this venture was a very bad (and unnecessary) idea. How’d that war work out for you?

JMTsays:

Re: Re: Re:

Good job ignoring the main point of the comment you replied to. Are the public complaining about Google’s position in the market? Are the public complaining about the services Google offer? No, only their competitors. Where’s the evidence of harm to the public?

Have you considered that Google’s dominant position in the market is the result of offering a great service that people want? Why should they change that service, to the public’s detriment, to appease a few whiny competitors?

proximity1says:

Re: Re: Re: Re:

Oh, yes, let’s all complain; that would surely soften the tender hearts that operate Google. Why, they just didn’t know that there is actual public resentment at the fact that their stuff virtually rules the boards, pushes others off the radar-screen–and, uh, in their dominant position, they effectively hold sway over that “radar screen”.

I’m in the public; and I’m complaining. Though I expect you’ll say next, “Weel, gee, there just aren’t enough like you!”

I know that already–just as I know that if American society weren’t so overwhelmingly composed of ignorant, complacent morons, there’d be more chance it should occur to more Americans that they’re being routinely played for incredibly gullible suckers. But, there you are. Many people don’t bother to think much and among Americans, the entire culture favors the growth of thoughtless, careless, clueless stupidity.

The profits in the cultivation of idiotocracy are truly staggering and so stupid is all the rage. Elsewhere, where mass-media haven’t yet completely succombed to such prevasive influence over the public second-nature (un)thought processes, it’s different and there, “people” complain.

Anonymoussays:

Re:

I would say Mike that this is a case where you need to block off the American part of your brain and accept that other countries work under different legal and business systems.

Emphasis mine.

Why can’t the same be applied to copyright? (Yeah, I know this article isn’t about copyright, but that’s never stopped the shills from calling Mike a piracy apologist regardless of what the article says.)

You can’t compete with free. You just CAN’T. It’s absolutely impossible.

That’s why everybody is ignoring all the pay-for online games and playing Minesweeper and Solitaire. Microsoft has single-handedly wiped out the entire computer games industry.

Speaking of maps, this n?vi that appeared on my dashboard last month? Ignore it, it can’t possibly exist, because I already have Google Maps (with turn-by-turn navigation assist) on my Google Phone. And as we all know, you can’t compete with free.

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