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Is demand for Google’s algorithm anti-competitive?

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The demand for the algorithm’s disclosure is all part of the ongoing efforts by European authorities to contain what they see as Google‘s overwhelming market power. Fuelled by complaints from (amongst others) a British price comparison website, the European Commission instituted formal proceedings four years ago against Google under Article 102 of the Treaty on the Functioning of the European Union, which prohibits abuse of a dominant position. These proceedings rumble on, and in an important speech on 23 September Vice President Almunia, the Commission’s competition law supremo, stressed their role in preventing Google from abusing this dominance to exclude its rivals from the market.

Berlin’s demand also connects with its eagerness for the draft General Data Protection Regulation to enter into force as soon as possible. This massive piece of EU legislation is a locomotive fast coming down the tracks that will impose onerous obligations on all businesses – whether or not the size of Google, still smarting from this Spring’s “right to be forgotten” data privacy decision by the European Court of Justice.

But what about the transparency issue? ‘Transparent’ may be a modish adjective, but it’s not too popular with those who own intellectual property rights, especially where those rights consist of confidential information. After all: “every IPR starts with a secret. Writers do not disclose the plot they are working on (a future copyright), car makers do not circulate the first sketches of a new model (a future design), companies do not reveal the preliminary results of their technological experiments (a future patent), companies hold on to the information relating to the launch of a new brand (a future trade mark).”

The source of the above quotation is, paradoxically, a draft Directive proposed last year by the European Commission on the protection of undisclosed know-how, whose intention is to make it easier, not more difficult, for businesses to hang on to their trade secrets, and which is well on the way to becoming law.

So, why the paradox? Ultimately, it is explicable by the long-standing conflict between anti-trust law on the one hand (which is in favour of competition by business rivals) and, on the other hand, IP law (which isn’t). There are still many battles to come in this conflict. In the meantime, the German call for ‘transparency-based’ disclosure needs to be followed with care by anyone whose business relies on a trade secret. Even if it’s just a recipe for a fizzy drink.

Jonathan Cornthwaite is a partner at Wedlake Bell LLP.

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