Google is set to appeal the European Commission’s decision to impose a €2.4 billion fine after a finding that the company had abused its dominant position by manipulating search results to favour its own comparison shopping site. In a press release announcing the decision in June, European competition commissioner Margrethe Vestager stated: “What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”
Of course, Google is not the first major US technology outfit to fall foul of Brussels-based regulators, or to raise hackles in capital cities across Europe; one way or another, it seems, Silicon Valley often finds it tough to get a sympathetic hearing on this side of the Atlantic. For many in the continent, BigTech might provide great services, but its companies have a tendency to abuse dominant positions and avoid paying taxes on the huge revenues they generate. Such a characterisation may not be fair in the eyes of some; but that is beside the point, it is one that sticks.
And that brings me to patents. As everyone in the IP market knows, over recent year Europe has emerged as a much more important part of the equation for patent owners seeking to assert their rights. For multiple reasons – including the perceived quality of EPO-granted assets, speed to get a decision, the relatively low cost of litigating, the expertise of courts and, crucially, the availability of injunctions – the worsening environment for rights holders in the US is driving more companies to try courts in Germany, the UK and other European jurisdictions. Should the Unified Patent Court ever become a reality that process is likely to accelerate.
For American BigTech this brings challenges. As in the US, its companies are often defendants in patent infringement suits filed in Europe. But whereas they have been very successful in shaping a troll-based narrative as a way to being about legislative changes and influence judicial opinion against patent owners in the US, in Europe they have enjoyed far less success – even though they have certainly tried.
The problem that Silicon Valley’s BigTech companies face when seeking to shape the European patent agenda is fourfold:
there are a lot of European originator businesses – think Ericsson, Nokia, Siemens etc – that do a lot of patent and technology licensing and need a firm, certain environment within which to do it;
there is very little pressure from European SMEs currently for a reduction in patent rights – if anything, the call is for them to be strengthened;
the European patent environment just isn’t like the US one – it is not troll-compatible; and,
finally, for reasons previously outlined BigTech companies themselves are viewed suspiciously by many decision-makers and their advisers, who look very carefully and sceptically at the things they do and the claims they make.
Where that leaves lobbying efforts that seek to water down or eliminate the UPC injunction regime, for example, remains to be seen. My guess is that as long as BigTech identifiably campaigns as BigTech it is unlikely to get much traction. Instead, what it needs are examples of small European companies falling foul of abusive patent litigants – the kinds of stories that it has always been possible to dig out in the US. The problem is that in Europe these are tough to find – precisely because the system is not troll-friendly. Getting around that may be a challenge that even the expertise of Silicon Valley’s best paid public relations advisers and lobbyists will struggle to meet.