On June 19, 2025, when the
European Court of Justice, the E.U.’s supreme court, received a nonbinding
opinion from the advocate general, Juliane Kokott, recommending that Google’s
appeal against an anti-trust fine of €4 billion be dismissed by the court. The
E.U.’s executive branch, the Commission, had found in 2018 that the company had
“used the dominance of its mobile Android operating system to throttle competition
and reduce consumer choice.”[1]
I contend that the company’s written statement in response can be characterized
as “stone-deaf” or oblivious to the issue at hand. Such is not an effective way
of managing threats in the environment of business. Moreover, the response itself
illustrates why governmental action on anti-trust on behalf of market
competition is valid and necessary. I contend that the invisible-hand mechanism
of a restored competitive market is more reliable than depending on managerial intentions
even if they are to be based on motivation that is social-engineered from
fines.
The fine of €4 billion is part
of a total of €8 billion against Google for anti-trust violations over a
decade, including on the company’s digital ad unit. So, a pattern of restraint
of trade can be inferred. As if obvious to it, the company statement in reaction
to Kokott’s recommendation included, “Android has created more choice for
everyone and supports thousands of successful businesses in Europe and around
the world.”[2]
That the advent of android technology had given consumers another option says
nothing about whether Google was also curtailing other options. That many
businesses were using android technology is not a rebuttal to the government’s
claim that Google was operating in restraint of trade. In fact, that many
businesses were using Google’s technology means that the company’s market
share, and thus market power, were enough for the company to be able to
restrain competition in the industry. In wanting to brag (or advertise), the
managers at Google who wrote and approved the statement were unwittingly making
the government’s case. Unsuccessful companies do not have sufficient
market-power to restrict or curtail competition as John D. Rockefeller’s Standard
Oil did in the U.S. until that company was broken up (rather badly) by the U.S.
Supreme Court on anti-trust grounds. This example begs the question of whether
merely slapping Google with fines is sufficient to arrest the company’s pattern
of restraining trade. Both the pattern and the bragging illustrate the tone-deaf
feature of greed that narrows cognition and perception. In applying a fine to
Google, the E.U. regulators would be naïve in believing that the company’s
managers would then be motivated to stop curtailing competition. At the very
least, the Commission’s commissioner for competition would still need to watch
Google like a hawk.
I contend that it is vital to
the public interest, or common good, of a society that competitive markets be
protected and even created out of oligopolies by governments; this is a legitimate
role for government because price-competition forces suppliers to be
price-takers rather than price-setters. Only as the former are suppliers
oriented to demand. This crucial role of price in a competitive market was arguably
Adam Smith’s best contribution, or “value added,” to economic theory. The “invisible
hand” by which buyers and sellers are both price-takers can be understood as an
impersonal mechanism that constrains self-interest and even gives rise to
unintended beneficial consequences of self-interest as goods and services are
allocated efficiently rather than according to the self-interested will of a
monopolist.
Even more abstractly,
self-interest stems from the sin of self-love, which is the putting of one’s
own happiness above love directed to God, so constraining especially narrow
self-interest is important so as to obviate the baleful effects from greed that
is oriented only to one’s own private benefit. In other words, that such
self-interest is based ultimately on the sin of self-idolatry (i.e.,
worshipping one’s own happiness even at the expense of loving God) means that a
society is wise at the very least to constrain even self-interests that are
economically aggregated with unintended beneficial consequences. Smith’s “invisible
hand” impersonal mechanism, if protected by government anti-trust enforcement,
is more reliable, I submit, than even intended beneficial consequences that
are conditional on human intention and thus motivation. This is why downsizing
Google in the E.U. is preferable to trying to motivate Google’s management to
stop restraining competition in its industry by means of fines.
Pierre Nicole, a Jansenist
priest in the seventeenth century, argued that self-love can have beneficial
consequences. The consequences are intended, but only in so far as the benefits
going to others are in one’s own self-interest. Courtesy, for example, although
rooted in self-love and thus fully in accord with self-interest, constrains immediate
or narrow self-interest that runs unfettered in Hobbes’ state of nature. Simply
put, we can get more by being social with other people than by taking their
food and even killing them. Smith’s impersonal market mechanism also constrains
narrow (or immediate) self-interest, such as raw greed, even though the untended
aspect of the invisible hand differs from Nicole’s intended courtesy,
and the impersonal aspect of Smith’s market mechanism differs from Nicole’s
personal motive to extend courtesy to others because it is in one’s
interest to do so. Also, whereas the invisible hand constrains self-interest
itself, though competition may ultimately be in a company’s long-term best financial
interest, extending courtesy to others only constrains narrow (or immediate)
self-interest. In other words, narrow self-interest, in which only private
benefits to oneself are sought, is constrained by both approaches and so they
can be compared. But courtesy can easily be turned off, as it depends on intention,
whereas the invisible hand’s operation does not depend on market participants intentions
to constrain their own self-interest. As self-love is a manifestation of the
foundational sin of pride, according to Augustine, a person’s intentions to
constrain one’s own self-interest in actions cannot be relied upon even though
it is laudable when a person assumes an enlightened self-interest and even acts
altruistically. In assuming a managerial role in a company, a human being comports
oneself to one’s narrow economic role, which willows one’s intentions that go
beyond immediate or medium-term financial interests, both in terms of salary and
company profitability.
It bears remembering that even
though part of the literature on corporate social responsibility in the twentieth
century includes ethical principles, CSR programs have become largely marketing.
Indeed, the fiduciary duty of managers to the stockholders as a group mandates
that the managers be oriented to maximizing profit (and thus dividends and the
stock price). This legal infrastructure encases narrow self-interest, which
benefits from restraining trade in order to increase market power and profit. Therefore,
it should not be surprising that Google’s written reaction to the judicial opinion
of the advocate general bears no traces of responsibility to uphold a
competitive market for the good of society, but can instead be interpreted as
sheer marketing. Lots of businesses use our product! Rockefeller could have said
the same. That titan, who viewed himself as a “Christ figure” and a Noah in
saving rival refiners from destructive competition in the 1860s by forcing them
abord his “combination,” was also found guilty of restraint of trade. His self-deluded
intentions certainly could not be trusted by the Supreme Court justices who
ruled in favor of breaking up his company. In the 2020’s, the E.U. was
surpassing the U.S. on anti-trust enforcement, but even so, I submit that motive-triggering
fines are not sufficient to restoring and protecting market competition once
there is an egocentric giant in the room.
2. Ibid.
