French commercial court fines Google maps for being free

[Boggle]

Source: AFP: France convicts Google Maps for unfair competition

The long and short of this judgement is that google have been found guilty of abusing the dominant position of it's Google maps application by providing the maps application for free. My first reaction, it has to be said, was that this was mental until I read the following claim from the claimant:

the Google strategy was aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market.

If that is true then it is surely a reasonable judgement, despite the fact that I like getting my maps for free and I'd be interested in hearing posters views on the matter.

[Sync]

Yup. It's effectively loss leading which is frowned on in Euroland.

[ibis]

I presume they must have proven to the court's satisfaction that the free nature of Google's map provision was temporary. And that is a disturbing thought.

[j26]

Isn't Googles business model to provide the basic service free and get the revenue from ads?

What next? Microsoft sues over Google Docs?

[Tombo]

Source: AFP: France convicts Google Maps for unfair competition

The long and short of this judgement is that google have been found guilty of abusing the dominant position of it's Google maps application by providing the maps application for free. My first reaction, it has to be said, was that this was mental until I read the following claim from the claimant:

the Google strategy was aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market.

If that is true then it is surely a reasonable judgement, despite the fact that I like getting my maps for free and I'd be interested in hearing posters views on the matter.

Competition authorities do and should consider "preditory pricing" from dominant market participants.

The crucial point is the subsequent intent and abilitity of any such participant to extract monoply rents (super economic profits) after the manage to drive subsititutes from the market.

You would need to nkow more about all the evidence produced, but at a cursory level this looks like a legal (i.e. poor) judgement rather than one more proprly grounded in the economics.

The key being, I really can't see a convincing case being made that barriers to entry are very high. In the event the Google gets near 100% market share there is very little in the way to prevent competition just sparking up again from nowhere (most liekly for free, i.e. advertising financed) to drive the price back down again.

[ibis]

Isn't Googles business model to provide the basic service free and get the revenue from ads?

What next? Microsoft sues over Google Docs?

A lot depends on what services they were providing here. I doubt it was the main Google Maps interface.

[Dylan2010]

if something has started out free, its very difficult to charge for it later, they will have to have a free then maybe a premium option with bells and whistles.
I dont agree with the decision

[Boggle]

I presume they must have proven to the court's satisfaction that the free nature of Google's map provision was temporary. And that is a disturbing thought.

According to the article google are appealing it so perhaps they are claiming otherwise but, if true, it is certainly worrying.

I wonder if this is an isolated incident or if that strategy is common across other areas of google's business?

[Tombo]

Basically, the French are a bit like us. they never got the idea of "the market". Everything needs direction, control and rules.


If they enforce this ruling French consumers will end up exactly where they are in many other areas of their lives.

They will be

• paying for something that could be provide free at point of consumption.
• Google will be able to generate super economic profits (charge a higher price than the market would allow)
• The industry will attract other less efficient providers who can't get by on their higher costs and less efficient production other than by creaming revenue from the enforced price.

Courts, judges, barristers and solicitors shouldn't be allowed anywhere near this stuff.

[greengoose2]

It's probably putting the Michelin crowd out of business! Vive la France, vive la Liberté!