France: Google’s Free Map Service Unfair To Commercial Map Sellers

We at Cato enjoy citing Frederic Bastiat’s 1845 classic of free-trade pamphleteering, the “Petition of the Candlemakers,” which addresses the French Parliament as follows:

…We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival… is none other than the sun…

The satire goes on to demand that the government banish the unfair competition and restore proper encouragement to domestic industry by requiring that owners exclude sunlight from all building windows.

Once again real life is making it hard to tell satire from reality – appropriately, in Bastiat’s France. According to an Agence France-Presse account, a French commercial court has ordered Google to pay 500,000 Euros to a local map company for unfair practices that constitute an abuse of the “dominant position of its Google Maps application.” In particular, Google provides its maps for free, unlike complainant Bottin Cartographes, which charges good money and has apparently run into trouble holding onto its customers on that basis. Cory Doctorow at BoingBoing:

Bottin Cartographes argued that Google was only planning to give away the service for free until all the competitors had been driven out of business and then they would start charging. This seems implausible to me, and contrary to Google’s business model (give away services, make money from mining the use of those services). Google says it will appeal.

The problem with being a libertarian satirist is that government’s real-world doings keep matching and outrunning the satire.

P.S. Note that the French case arose not from Google’s furnishing of its free map service to individual end customers, but from its furnishing of its map API to businesses that typically adapt it for use in their own sites; as commenters at BoingBoing note, Google has indeed introduced fees for its largest business users of this type (which has caused some of them to adapt by switching from Google’s API to OpenStreetMap, a free wiki-based map service). In short, the complaints about free pricing of too excellent a product draw on the antitrust theory of predatory pricing, which American courts have held in general disfavor since the Chicago antitrust revolution but which continues to hold sway in some other parts of the world. For more on the predatory pricing theory, see these Cato publications.