4 ms·

Google Maps accused of unfair competition in France(for being free)

12 points by vaksel 17y ago

tumult 17y ago
Before you get your knickers all twisted up, remember that you can sue for whatever you want in most countries. It doesn't have to be a valid claim or have some cultural significance.
jacquesm 17y ago
"The French company provides the same services for a fee and claims the Google strategy is aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market." That's going to be a tough one to prove, if that really is their assertion in the court documents they've basically killed themselves before it even gets started. Google has a track record of NOT charging for any of their services, why google maps - and then specifically for France - would be any different difficult to argue for. The judge can now simply say, ok, let's wait until that happens, then you can claim your damages. And in defense google could simply promise solemnly that they will never charge French users for access to google maps. (which I assume is their intention any way). It's not illegal in France to allow access to a free service. Tough to compete with free. Adapt or die.
- jhancock 17y ago
  I like free services as well as the rest of us. But Google is making money indirectly off all/most of its free services. They certainly aren't creating great products for us out of kindness. There isn't an easy answer here. The free services are great, I wouldn't want to see them go away. But they are a component of anticompetitive measures into the market. Saying adapt or die simply isn't an acceptable answer here. If you have a great map product but do not own an ecosystem of other products, such as Google has, you are on the short end of things and the market becomes smaller and less competitive.
  - jacquesm 17y ago
    Absolutely. But let's contrast that with a topic that quite a few of us here have probably come up against at some point in the past: I used to sell software, license based. When the open source revolution happened there was not one free competitor for the kind of software that I was writing, there were many. The quality wasn't there, the features were not up to spec but the basic functionality was there so overnight my market dried up. I could have gone and sued the pants of whoever was 'destroying my market', but instead I adapted and found new ways to monetize my skills. Google has a method, and you've correctly identified it as indirectly making money off a service and that is a principle that is out in the open. The same with newspapers that suddenly found themselves faced with free competitors and then on top of that had tons of online competition, also for free. Nobody has a 'right' to their businessmodel, whether you have a great product or not does not enter into the equation, the marketplace is constantly shifting and you have to be prepared for such shifts.
    - jhancock 17y ago
      Good points. I have had my market destroyed in a similar fashion to what you describe. I also did not think it was the right course to sue my new competitors that were giving away their product. But if the French want to have more strict and protectionist controls, so be it, its their economy. It will be interesting to see how such lawsuits pan out.
- viraptor 17y ago
  > And in defense google could simply promise solemnly that they will never charge French users for access to google maps. They can't start charging for it easily. They would have to agree on "going commercial" with MS - otherwise everyone would just jump over to the competitor. And both MS and Google pulling free maps at the same time would be something that lawyers would like to look into... ;)
  - jacquesm 17y ago
    Exactly. I really don't think this will fly. They are free to try though, you can sue anybody for anything as tumult already noted above, even when you're only telling all of your current customers that there is a free alternative that they may not even be aware of. Well done :)
- TriinT 17y ago
  A new kind of business plan: - start a company in France providing a service that Google provides for free. - sue Google for predatory pricing. Bonus points for added drama: make sure you point out that Google is out to destroy French jobs and undermine French culture and language. - make money off the lawsuits, not the services the company is supposed to provide. Do you think it could work?
megaman821 17y ago
I thought Google Maps is free only when publicly viewable. If you have a pay site or want to include it in pay software you have to buy it. So the French company has issue with Google's business strategy for Maps not that it is free (because it is only free to some).
zngtk4 17y ago
This seems wrong, but Google kind of deserves it -- Google has been involved in antitrust and other actions against Microsoft (e.g. they have been actively involved in the recent case against Microsoft in Europe regarding the "browser ballot"). So they don't really have any right to complain when someone uses the same types of laws against them.
- Hexstream 17y ago
  Not necessarily. If Google's antitrust claims against Microsoft were true and in good faith and the new claims against them are false and in bad faith, the new false claims gain no legitimity from Google's previous claims and they do have "the right to complain".
yardie 17y ago
From the look of it it seems the company is trying to get the courts to prop up their failing business model. If they think the only way Google can monetize their operation is by eliminating competition first than they are seriously deluded. Why only Google? Why not sue mappy, viamichelin, and all the other companies providing free maps. Also, you can't sue for just any reason. You have to make a valid case that the company is doing direct harm to your business. If companies could sue for any reason the free market would grind to a halt as failed businesses sue successful businesses for being successful. What you can do is send a stupid letter and a press release saying you are going to sue. They are hoping Google will settle before it reaches court, because the judge will take one look at this case and throw them out on their asses.
- daeken 17y ago
  You can sue for anything. It doesn't mean the Judge won't throw it out or that you even have a shot at winning, but you can file suit for any reason you can think up.
Gormo 17y ago
I recall Amazon being fined by the French government a few years ago because offering free shipping was "unfair competition". It can't be good for innovation when you can sue your competitors simply for offering better value.
- jhancock 17y ago
  If a company can subsidize a product or service (shipping, free maps so you make money off ads, etc) at a loss, this is anti-competitive. I'm not saying it is illegal or immoral. But it most certainly can be an effective anticompetitive approach. It is reasonable for people/companies/government to ask if society or their economy has crossed a line in terms of disabling competition. This is nothing new. The U.S. has/had anti-dumping laws, they just aren't used these days. Maybe the pendulum will swing back the other way, who knows. So when you say "It can't be good for innovation when you can sue your competitors simply for offering better value." Well it depends. What is value here? Subsidizing shipping can be seen as both offering value as well as using capital reserves to kill off competition.
- dtf 17y ago
  France has a law to "protect" booksellers, which means no-one is permitted to undercut the list price by more than 5%. The traditional booksellers complained that the free shipping was worth more than 5%, so Amazon were fined €1000 per day until they stopped... I don't think they stopped. Does anyone know if they are still paying the fines?
- anigbrowl 17y ago
  well, they haven't won the case yet, and they probably won't, since Google can argue that they offered to supply it in exchange for benefits-in-kind which have an economic value, in other words a barter agreement. Don't go blaming France just because a French company brings a crappy lawsuit. the USA is awash with frivolous lawsuits.
gojomo 17y ago
Expect this argument to be repeated for other services and in other countries. Google makes giant profits in AdWords and AdSense core -- where they enjoy a near-monopolistic market share. They may then use that money to subsidize free offerings in many other markets. This could be construed by many antitrust enforcers as unfair competition, or even 'predatory pricing' if in fact it seems part of a long-term strategy to make money in the targeted markets after the competition has been driven away. Google is concerned about such an argument; I just googled for [antitrust subsidize] and the top hit was: "Google Public Policy Blog: Is free an antitrust issue?" http://googlepublicpolicy.blogspot.com/2009/07/is-free-antitrust-issue.html http://googlepublicpolicy.blogspot.com/2009/07/is-free-antit...
cabalamat 17y ago
In related news, Perrier sues tap water, claims unfair competition. :-)
dantheman 17y ago
I can't believe the number of apologists posting on this thread, even claiming that's it just an ordinary lawsuit is ridiculous -- it should be thrown out of court as soon as its presented.
graphene 17y ago
An aspect of this I feel hasn't been addressed is that in this case, the product of the commercial activity is information (in the form of a map), which has a reproduction cost tending to zero. This will of course make it difficult to sell profitably (the fact that in most cases the information costs energy to produce, is beside the point). To those who would argure that this is unfair competition, I would ask whether they would feel the same about an encyclopaedia company suing wikipedia, or the publisher of "Blurb for dummies" suing the guy who put a Blurb tutorial on his website. I would contend that there is no viable market here in the first place. The example of Google maps proves my point, Google having to make money selling ads, instead of the information itself.

12 points by vaksel 17y ago

Before you get your knickers all twisted up, remember that you can sue for whatever you want in most countries. It doesn't have to be a valid claim or have some cultural significance.

jacquesm 17y ago

"The French company provides the same services for a fee and claims the Google strategy is aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market." That's going to be a tough one to prove, if that really is their assertion in the court documents they've basically killed themselves before it even gets started. Google has a track record of NOT charging for any of their services, why google maps - and then specifically for France - would be any different difficult to argue for. The judge can now simply say, ok, let's wait until that happens, then you can claim your damages. And in defense google could simply promise solemnly that they will never charge French users for access to google maps. (which I assume is their intention any way). It's not illegal in France to allow access to a free service. Tough to compete with free. Adapt or die.

jhancock 17y ago
I like free services as well as the rest of us. But Google is making money indirectly off all/most of its free services. They certainly aren't creating great products for us out of kindness. There isn't an easy answer here. The free services are great, I wouldn't want to see them go away. But they are a component of anticompetitive measures into the market. Saying adapt or die simply isn't an acceptable answer here. If you have a great map product but do not own an ecosystem of other products, such as Google has, you are on the short end of things and the market becomes smaller and less competitive.
- jacquesm 17y ago
  Absolutely. But let's contrast that with a topic that quite a few of us here have probably come up against at some point in the past: I used to sell software, license based. When the open source revolution happened there was not one free competitor for the kind of software that I was writing, there were many. The quality wasn't there, the features were not up to spec but the basic functionality was there so overnight my market dried up. I could have gone and sued the pants of whoever was 'destroying my market', but instead I adapted and found new ways to monetize my skills. Google has a method, and you've correctly identified it as indirectly making money off a service and that is a principle that is out in the open. The same with newspapers that suddenly found themselves faced with free competitors and then on top of that had tons of online competition, also for free. Nobody has a 'right' to their businessmodel, whether you have a great product or not does not enter into the equation, the marketplace is constantly shifting and you have to be prepared for such shifts.
  - jhancock 17y ago
    Good points. I have had my market destroyed in a similar fashion to what you describe. I also did not think it was the right course to sue my new competitors that were giving away their product. But if the French want to have more strict and protectionist controls, so be it, its their economy. It will be interesting to see how such lawsuits pan out.
viraptor 17y ago
> And in defense google could simply promise solemnly that they will never charge French users for access to google maps. They can't start charging for it easily. They would have to agree on "going commercial" with MS - otherwise everyone would just jump over to the competitor. And both MS and Google pulling free maps at the same time would be something that lawyers would like to look into... ;)
- jacquesm 17y ago
  Exactly. I really don't think this will fly. They are free to try though, you can sue anybody for anything as tumult already noted above, even when you're only telling all of your current customers that there is a free alternative that they may not even be aware of. Well done :)
TriinT 17y ago
A new kind of business plan: - start a company in France providing a service that Google provides for free. - sue Google for predatory pricing. Bonus points for added drama: make sure you point out that Google is out to destroy French jobs and undermine French culture and language. - make money off the lawsuits, not the services the company is supposed to provide. Do you think it could work?

megaman821 17y ago

I thought Google Maps is free only when publicly viewable. If you have a pay site or want to include it in pay software you have to buy it. So the French company has issue with Google's business strategy for Maps not that it is free (because it is only free to some).

zngtk4 17y ago

This seems wrong, but Google kind of deserves it -- Google has been involved in antitrust and other actions against Microsoft (e.g. they have been actively involved in the recent case against Microsoft in Europe regarding the "browser ballot"). So they don't really have any right to complain when someone uses the same types of laws against them.

Hexstream 17y ago
Not necessarily. If Google's antitrust claims against Microsoft were true and in good faith and the new claims against them are false and in bad faith, the new false claims gain no legitimity from Google's previous claims and they do have "the right to complain".

yardie 17y ago

From the look of it it seems the company is trying to get the courts to prop up their failing business model. If they think the only way Google can monetize their operation is by eliminating competition first than they are seriously deluded. Why only Google? Why not sue mappy, viamichelin, and all the other companies providing free maps. Also, you can't sue for just any reason. You have to make a valid case that the company is doing direct harm to your business. If companies could sue for any reason the free market would grind to a halt as failed businesses sue successful businesses for being successful. What you can do is send a stupid letter and a press release saying you are going to sue. They are hoping Google will settle before it reaches court, because the judge will take one look at this case and throw them out on their asses.

daeken 17y ago
You can sue for anything. It doesn't mean the Judge won't throw it out or that you even have a shot at winning, but you can file suit for any reason you can think up.

Gormo 17y ago

I recall Amazon being fined by the French government a few years ago because offering free shipping was "unfair competition". It can't be good for innovation when you can sue your competitors simply for offering better value.

jhancock 17y ago
If a company can subsidize a product or service (shipping, free maps so you make money off ads, etc) at a loss, this is anti-competitive. I'm not saying it is illegal or immoral. But it most certainly can be an effective anticompetitive approach. It is reasonable for people/companies/government to ask if society or their economy has crossed a line in terms of disabling competition. This is nothing new. The U.S. has/had anti-dumping laws, they just aren't used these days. Maybe the pendulum will swing back the other way, who knows. So when you say "It can't be good for innovation when you can sue your competitors simply for offering better value." Well it depends. What is value here? Subsidizing shipping can be seen as both offering value as well as using capital reserves to kill off competition.
dtf 17y ago
France has a law to "protect" booksellers, which means no-one is permitted to undercut the list price by more than 5%. The traditional booksellers complained that the free shipping was worth more than 5%, so Amazon were fined €1000 per day until they stopped... I don't think they stopped. Does anyone know if they are still paying the fines?
anigbrowl 17y ago
well, they haven't won the case yet, and they probably won't, since Google can argue that they offered to supply it in exchange for benefits-in-kind which have an economic value, in other words a barter agreement. Don't go blaming France just because a French company brings a crappy lawsuit. the USA is awash with frivolous lawsuits.

gojomo 17y ago

Expect this argument to be repeated for other services and in other countries. Google makes giant profits in AdWords and AdSense core -- where they enjoy a near-monopolistic market share. They may then use that money to subsidize free offerings in many other markets. This could be construed by many antitrust enforcers as unfair competition, or even 'predatory pricing' if in fact it seems part of a long-term strategy to make money in the targeted markets after the competition has been driven away. Google is concerned about such an argument; I just googled for [antitrust subsidize] and the top hit was: "Google Public Policy Blog: Is free an antitrust issue?" http://googlepublicpolicy.blogspot.com/2009/07/is-free-antitrust-issue.html http://googlepublicpolicy.blogspot.com/2009/07/is-free-antit...

cabalamat 17y ago

In related news, Perrier sues tap water, claims unfair competition. :-)

dantheman 17y ago

I can't believe the number of apologists posting on this thread, even claiming that's it just an ordinary lawsuit is ridiculous -- it should be thrown out of court as soon as its presented.

graphene 17y ago

An aspect of this I feel hasn't been addressed is that in this case, the product of the commercial activity is information (in the form of a map), which has a reproduction cost tending to zero. This will of course make it difficult to sell profitably (the fact that in most cases the information costs energy to produce, is beside the point). To those who would argure that this is unfair competition, I would ask whether they would feel the same about an encyclopaedia company suing wikipedia, or the publisher of "Blurb for dummies" suing the guy who put a Blurb tutorial on his website. I would contend that there is no viable market here in the first place. The example of Google maps proves my point, Google having to make money selling ads, instead of the information itself.