The Health 202: CBO score of Senate health bill certainly doesn’t ease McConnell’s path to 50 – Washington Post


Senate Majority Leader Mitch McConnell (R-Ky.) (AP Photo/Carolyn Kaster)

Expect lots of tinkering of the Senate health-care bill in the next few days as Senate Majority Leader Mitch McConnell (R-Ky.) tries to fine-tune his Obamacare overhaul to garner enough votes for passage later this week. The road to success looks steeper than ever as senators appear to dig in against it. Yet McConnell built some spending wiggle room into his legislation, giving him some leeway to bulk up its benefits as a way of gaining more political traction should he need it.

The numbers from the Congressional Budget Office rolled out yesterday: Twenty-two million more people would be uninsured by 2026 under the Senate GOP health-care bill, Congress’ official scorekeeper estimated. It’s a big number, one that certainly doesn’t ease the pathway toward the 50 Republican votes needed to pass the Better Care Reconciliation Act. (Check out our whip count for updates all week long.)

“The release of the 49-page ­report late Monday afternoon seemed to worsen the bill’s prospects,” my colleagues Kelsey Snell and Amy Goldstein write. “No new senators immediately said they would back the legislation, and at least three ­wavering members of the GOP caucus said they would vote against starting debate Tuesday on the bill in its current form. A fourth, Sen. Dean Heller (R-Nev.), had expressed his opposition last week.”

–Moderate Sen. Susan Collins (Maine) tweeted that she would vote against starting floor debate on the bill (known as a motion to proceed). Sen. Rand Paul (Ky.) told reporters he will vote against a motion to proceed, as did Sen. Dean Heller. (R-Nev.)

I want to work w/ my GOP & Dem colleagues to fix the flaws in ACA. CBO analysis shows Senate bill won’t do it. I will vote no on mtp. 1/3

— Sen. Susan Collins (@SenatorCollins) June 26, 2017

CBO says 22 million people lose insurance; Medicaid cuts hurt most vulnerable Americans; access to healthcare in rural areas threatened. 2/3

— Sen. Susan Collins (@SenatorCollins) June 26, 2017

Senate bill doesn’t fix ACA problems for rural Maine. Our hospitals are already struggling. 1 in 5 Mainers are on Medicaid. 3/3

— Sen. Susan Collins (@SenatorCollins) June 26, 2017

Paul called the draft a “terrible bill” and said he has no plans to vote for the motion to proceed with it, per HuffPost reporter Matt Fuller:

“It’s a terrible bill.” –Rand Paul

— Matt Fuller (@MEPFuller) June 26, 2017

Rand Paul says he won’t vote for the motion to proceed.

“It’s worse to pass a bad bill than no bill.”

— Matt Fuller (@MEPFuller) June 26, 2017

Paul said he has reached out to Republican leadership to try to negotiate on the bill to no avail (although he says he did hear from President Trump). From USA Today’s Eliza Collins:

.@RandPaul: I’ve said I’m willing to negotiate on health care and have reached out to leadership but no response, Trump did call.

— Eliza Collins (@elizacollins1) June 26, 2017

Bloomberg’s Sahil Kapur tweeted that moderate Sen. Dean Heller (R-Nv.) says he will join Paul and Collins in voting against the motion to proceed: 

Heller, Paul and Collins say they’ll vote no on the motion to proceed to Trumpcare. That means it’s toast unless changed. McConnell’s move.

— Sahil Kapur (@sahilkapur) June 26, 2017

–Sen. Ron Johnson (R-Wis.), one of three conservatives to ally with Paul against the bill last week, also took a bearish stance. He said he did not have enough information after the release of the CBO score to make a decision on whether to vote to proceed with the bill. Johnson added he’s worried the bill does not go far enough to bring down premiums.

“I’m just not convinced we’re doing enough,” Johnson told reporters. “I have a hard time believing I’ll have enough information to vote on a motion to proceed this week.”

–Sen. Ted Cruz (R-Tex.), also part of the conservative foursome, sounded a little more optimistic. He believes “we can still get to yes” although he wants more premium-lowering provisions tacked on. The CBO estimates that average premiums for individual market shoppers would be 30 percent lower in 2020 and 20 percent lower in 2026 than under current law.

From Sahil and BuzzFeed’s Lissandra Villa:

Ted Cruz: “At this point, significant work remains to be done… I believe we can get to yes and that we will get to yes.”

— Lissandra Villa (@LissandraVilla) June 26, 2017

CRUZ on CBO score of Trumpcare:

“At this point, We need to do considerably more to lower premiums.”

“Significant work remains to be done.”

— Sahil Kapur (@sahilkapur) June 26, 2017

Sen. Lisa Murkowski (R-Alaska) told CNN that if asked to vote today, she doesn’t “have enough information, I don’t have enough data in terms of the impact on my state to be able to vote in the affirmative.” 

Sen. Lisa Murkowski: I don’t have enough data on the impacts of the health care bill “to vote in the affirmative”

— CNN Politics (@CNNPolitics) June 26, 2017

Remember, if just three Republicans vote against the health-care measure, it’s doomed in the Senate and may forever kill the GOP’s chances of repealing and replacing the law they’ve reviled for so long.

–But there might be a silver lining in McConnell’s gathering clouds. The CBO estimates the bill will save $321 billion over a decade — a much higher threshold of savings than the House’s $119 billion in deficit reduction. If McConnell wants to achieve the same level of savings as the House version, he has a budget of about $200 billion to work with for making the measure more attractive to the Collins, Hellers and Cruzes of the world.

McConnell could dip into that funding in ways that would appeal to moderates, like easing back Medicaid expansion even more slowly or taking a gentler approach to Medicaid cuts. Or, he could direct more funds to states for reinsurance pools to lower the costs of premiums for healthy people — a move that might appeal to conservatives.

We’ve already seen a modification to the bill this week, which had a continuous coverage requirement added to incentivize healthy people to buy insurance instead of waiting until they’re seriously ill. If people lacked coverage for at least 63 days in the previous year, they would have to wait six months before their coverage would kick in.

Capitol Hill staffers are working overtime on more potential tweaks to the BCRA that McConnell will almost certainly have to offer members if he wants a fighting chance at passing the bill by week’s end. McConnell’s determined to call their bluff by bringing Obamacare-reshaping legislation to the floor — but even his leadership team is admitting he might have to do it without full assurance it will pass. No. 3 Sen. John Thune (R-S.D.) noted the dilemma, per Vox’s Tara Golshan:

Sen. Thune: can’t see BCRA coming to the floor w/o the votes but doesn’t know if they’ll know if it has the votes w/o bringing to the floor

— Tara Golshan (@t_golshan) June 26, 2017

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A customer reads information in Spanish about Blue Cross Blue Shield and Obamacare at a kiosk at Compare Foods in Winston-Salem, N.C. (AP Photo/Gerry Broome)

AHH: Not everyone is panning the Senate health-care bill. Several major insurers said yesterday it would go far toward shoring up the individual market. Anthem, which recently withdraw from the Obamacare marketplaces in Wisconsin, Indiana and Ohio citing heavy losses and uncertainty, praised the measure’s $112 billion in state stabilization funds, repeal of the ACA taxes and two-year provision of extra Obamacare subsidies.

“We believe the Senate discussion draft will markedly improve the stability of the individual market and moderate premium increases” because it appropriates billions of dollars in short-term funding to shore up the exchanges, provides cost sharing reduction (CSR) funds, and eliminates a tax on health insurance plans,” the company said in a statement. 

Likewise, the Blue Cross Blue Shield Association, whose Obamacare plans have performed better than most, said it was “encouraged” at steps within the measure aimed at stabilizing the individual market. “We are encouraged that the proposed Senate health reform legislation includes several urgently needed and important steps to help make the individual market for insurance more stable and affordable in 2018 and 2019,” BCBS said in a statement.

OOF: But the American Medical Association, which had already expressed “grave concerns” about the Senate health-care bill, took a firm stance against the bill yesterday in a damning letter criticizing its Medicaid cuts, smaller subsidies and repeal of the ACA’s public health and prevention fund.

“Medicine has long operated under the precept of Primum non nocere, or “first, do no harm,” AMA CEO James Madara wrote to McConnell and Minority Leader Charles E. Schumer (D-N.Y.). “The draft legislation violates that standard on many levels.”

“We believe that Congress should be working to increase the number of Americans with access to quality, affordable health insurance instead of pursuing policies that have the opposite effect,” the letter said.

The AMA opposes the #Senate‘s #HealthcareBill, with physicians’ vow to #FirstDoNoHarm at the crux of our opposition.

— AMA (@AmerMedicalAssn) June 26, 2017

OUCH: Today the AMA released a new poll that found most Americans dislike the idea of cutting federal Medicaid spending and allowing narrower insurance coverage – policies contained within both the House and Senate bills overhauling Obamacare. Medicaid rollbacks were unpopular regardless of whether respondents lived in a state that embraced the ACA’s Medicaid expansion or rejected it. Majorities in seven states — Alaska, Colorado, Nevada, Ohio, West Virginia, Tennessee and Arkansas – were opposed when asked whether Medicaid funding should be rolled back.


Trump, flanked by Senate Majority Leader Mitch McConnell of Ky., left, and House Speaker Paul Ryan of Wis., speaks during a meeting with House and Senate leadership, (AP Photo/Evan Vucci, File)

–President Trump called several of the Republican holdouts — including Paul, Cruz and Johnson — over the weekend, White House press secretary Sean Spicer confirmed yesterday. “The president talked extensively with several Republican members over the weekend and he felt very positive about those discussions, but they’re ongoing,” Spicer said, according to the Hill.

But no matter what happens this week, Trump is likely to break many of his health-care promises, The Post’s John Wagner, Abby Philip and Jenna Johnson report.

“As Republicans in the Senate press ahead with legislation that would dramatically cut Medicaid and scale back the Affordable Care Act marketplaces, it is increasingly clear that President Trump is almost certain to fall well short of fulfilling those promises,” they write.

“Trump and congressional Republicans will likely hail any bill that reaches the president’s desk as the fulfillment of a long-standing pledge to ‘repeal and replace’ the ACA, former president Barack Obama’s signature health-care law. But if the House and Senate agree on legislation along the lines of what is now being debated, millions — including some of Trump’s most ardent supporters — are projected to lose coverage, receive fewer benefits or see their premiums rise.”

Trump senior advisor Kellyanne Conway. (AP Photo/Evan Vucci, File)

–Technically speaking, the Senate health-care bill doesn’t cut Medicaid benefits — it cuts the federal contribution to Medicaid programs, which are run by the states. In theory, states could choose to make up the difference out of their own pocketbooks in order to keep eligibility and benefits steady. But the reality is that most states won’t be able to afford it, resulting in shrinking Medicaid programs around the country. So GOP claims their measure wouldn’t cut Medicaid are suspect.

“Republicans have in recent days taken to defending against some of the biggest criticisms of their bill using claims that are highly questionable and misleading, at best,” the Posts’s Aaron Blake writes“What’s notable in all of it is that the GOP isn’t really even trying to sell a more conservative, limited-government approach to health care; they’re pretending their bill doesn’t actually reduce benefits or coverage, basically at all.”

“Chief among these credulity-straining claims was White House counselor Kellyanne Conway’s contention Sunday that the GOP bill doesn’t actually cut Medicaid,” Aaron continues. “But Republicans have also suggested that the bill won’t reduce the number of Americans who are insured or enrolled in Medicaid. None of these square with the reality of what the GOP is proposing.”


–Senate Democrats led by Cory Booker of New Jersey staged a protest on the steps of the U.S. Capitol last night where they talked for hours as activists filed in and out to watch. The tone alternated between grim stories of people who would lose access to Medicaid and in-jokes between the senators, my colleague Dave Weigel reports.

“We’ve brought in Papa Smurf!” Booker exclaimed when top Senate Democrat Schumer arrived to participate.

“Michael Bennet is giving such an amazing speech on the floor,” said Schumer, referring to the Colorado Democrat delivering a floor speech at that moment. “He’s so passionate and strong.”

Earlier in the day, Schumer and other Democrats blasted the Senate health-care bill for its CBO projection that millions fewer people would have coverage under it, largely due to its deep cuts to federal Medicaid spending.

Sen. Patty Murray of Washington used President Trump’s “mean” reference to describe the bill:

Senate Republican leaders have somehow managed to take this mean legislation & make it even meaner. #Trumpcare

— Senator Patty Murray (@PattyMurray) June 26, 2017

–The thing is, Democrats can’t do much of anything to stop Republicans from passing a massive Obamcare overhaul. They’ve been bashing the Senate’s Better Care Reconciliation Act all over social media and plan to offer amendments to it. But Sen. Bernie Sanders is their only member capable of pulling big crowds together in a hurry to rally against it, Dave reports from Columbus, Ohio.

Sen. Bernie Sanders speaks to a crowd at the David Lawrence Convention Center in Pittsburgh about the impending Senate vote to repeal parts of the Affordable Care Act. (Photo by Jeff Swensen for The Washington Post)

“Bernie Sanders took the stage and got right to it, warning 2,200-odd Ohioans that their lives are at risk if Senate Republicans push through their health-care bill,” Dave writes. “The Columbus rally, the largest of three that Sanders staged over the weekend in Rust Belt states that Trump won, was part of an aggressive, last-ditch push to stop the Senate bill...Last week, protesters packed Reagan National Airport to hector Republicans before they went home for the weekend. And a pro-Trump super PAC that bought ads to pressure Sen. Dean Heller (R-Nev.) found that AARP had been waging an air war against Heller for months — from the other side.”

“Put yourself into someone else’s shoes,” Sanders told the crowd in Columbus. “What does it mean today, if you are struggling for your life, dealing with cancer, dealing with heart disease, dealing with diabetes, dealing with some chronic illness threatening your existence? What does it mean, when you read in the paper that Republicans might take away your insurance?”

A voice in the audience shouted out the answer: “You die!” “I say this not to be overly dramatic,” said Sanders. “If you take away health care from 23 million people, what will happen? People will die, by the thousands!”

Sen. Shelley Moore Capito (R-W.Va) is one of the senators who may not vote for the Senate health-care bill because of its Medicaid cuts. (Photo by Jeff Swensen/Getty Images)

–It was clear yesterday that some supporters of the Affordable Care Act hadn’t quite done their geographical research. An aerial ad over Charleston, West Virginia, read “Sen. Heller: Keep your word. Vote no on Trumpcare,” according to a tweet from Charleston Gazette-Mail Rob Byers. Someone needs to tell the pilot that Heller is from Nevada; the message should have targeted West Virginia Sen. Shelley Moore Capito.

Charleston, WV, looks to the sky and asks: “Who’s Senator Heller?” Probably not the reaction organizers were seeking. It’s @SenCapito, guys.

— Rob Byers (@RobByersWV) June 26, 2017

The Health 202 is glad we don’t (often) make 2,200-mile mistakes. Here are a few other interesting reads from around the web:


Unfortunately, the Senate Republican alternative, unveiled last week, doesn’t appear to come close to addressing their plight. Like Obamacare, it relies too heavily on government spending, and ignores the role that the private sector can and should play.

Sen. Ron Johnson (R-Wisc.) via The New York Times




Coming Up

  • The Bipartisan Policy Center will hold an event Wednesday on cybersecurity and medical devices.
  • The Cato Institute will hold a briefing Wednesday on Capitol Hill on how the federal government should address the opioid crisis.
  • The Bipartisan Policy Center will hold an event on Thursday on balancing Medicaid cost and coverage.
  • American Enterprise Institute will hold an event on Thursday on the government’s role in medical innovation.


Fact Check: The GOP’s spin on Obamacare premiums:

What’s in the CBO report on the Senate health-care plan:

‘Pharma bro’ Martin Shkreli is on trial for securities fraud: 

Seth Meyers on the CBO score for the Senate GOP’s health plan:

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White House says Syria’s Assad preparing another chemical attack, warns of ‘heavy’ penalty – Washington Post

A man carries one of the symbolic coffins with pictures of Syrian victims and inscriptions which translates as “killer Assad” and “killer Putin” set up during a protest against Russia for its alleged role in a chemical attack in the Syrian province of Idlib, on April 7 in Ankara. (Adem Altan/AFP/Getty Images)

The White House issued an ominous warning to Syrian President Bashar al-Assad on Monday night, pledging that his regime would pay a “heavy price” if it carried out another chemical attack this year.

In a statement, White House press secretary Sean Spicer said that the United States had detected evidence of preparations for a chemical attack, similar to the preparations that occurred before an attack in April.

Russia, a key Syrian ally, dismissed the White House statement on Tuesday and called Washington’s threats against Syria “unacceptable.”

“The United States has identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children,” Spicer said in the statement. “The activities are similar to preparations the regime made before its April 4, 2017 chemical weapons attack.

“As we have previously stated, the United States is in Syria to eliminate the Islamic State of Iraq and Syria,” he continued. “If, however, Mr. Assad conducts another mass murder attack using chemical weapons, he and his military will pay a heavy price.”

Following the April attack, President Trump ordered an airstrike against the Assad-controlled airfield where the attack was believed to have been carried out.

At the time, Trump said that Assad’s use of chemical weapons against innocent women and children made action inevitable.

“When you kill innocent children, innocent babies, babies, little babies, with a chemical gas that is so lethal — people were shocked to hear what gas it was,” Trump said after the attack. “That crosses many, many lines, beyond a red line, many, many lines.”

Following Spicer’s statement on Monday night, Nikki Haley, the U.S. Ambassador to the United Nations said Assad and its allies would be squarely blamed if such an attack occurred.

“Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia & Iran who support him killing his own people,” Haley wrote.

Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia & Iran who support him killing his own people.

— Nikki Haley (@nikkihaley) June 27, 2017

Any U.S. military action, however, could further deepen tensions with Russia. Earlier this month, a U.S. warplane downed a Syrian SU-22 fighter that U.S. official claimed targeted American-backed forces battling the Islamic State.

In response, Russia suspended its use of a hotline to keep track of U.S. and Russian military flights over Syria. The Kremlin also threatened to target any aircraft flown by the U.S. and allies west of the Euphrates River, which includes most of Syria outside of key areas controlled by the Islamic State.

In Moscow, Dmitry Peskov, the spokesman for Russian President Vladimir Putin, sharply criticized the White House statement on a potential chemical attack. “Such threats to Syria’s legitimate leaders are unacceptable,” Peskov said.

The U.S. military maintains a variety of weapons in the region that could be used in the event of another strike, including manned and unmanned aircraft in several Middle Eastern countries. But the most likely scenario is probably a strike using naval assets, which can be launched with fewer diplomatic issues than using bases in allied countries such as Turkey or the United Arab Emirates.

The Navy launched Tomahawk missiles at a Syrian military airfield April 6 in response to a previous alleged chemical weapons attack, using two guided-missile destroyers in the eastern Mediterranean Sea, the USS Ross and USS Porter, to do so.

Presently, the Pentagon has several ships nearby, including the George H.W. Bush Strike Group. Anchored by the aircraft carrier of the same name, it includes dozens of fighter jets and several smaller vessels, including the guided-missile destroyers USS Laboon and USS Truxtun and the guided-missile cruisers USS Philippine Sea and USS Hue City.

A point of contention for the Pentagon after the last strike was the Syrian regime’s alleged use of a nerve agent, like sarin. It is far deadlier than some other chemicals that U.S. military and intelligence officials say that the regime has used, such as chlorine.

Air Force Col. John Thomas, a spokesman for U.S. Central Command, said he had no additional information to share Monday night.

Brian Murphy contributed to this report.

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Trump’s new foil: a silent Barack Obama – CNN

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5 things for Tuesday, June 27: Syria, health bill, travel ban, Kislyak, hail – CNN

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Google fined €2.42BN for EU antitrust violations over shopping searches – TechCrunch

The European Commission has fined Google a record-breaking €2.42 billion for antitrust violations pertaining to its Google’s Shopping search comparison service — in what is widely considered the most significant antitrust ruling in Europe since the 2004 Microsoft decision.

Its finding states that:

  • Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google’s comparison shopping service wants to show results, these are displayed at or near the top of the search results.
  • Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google’s search results on the basis of Google’s generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google’s search results, and others appear even further down. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions.

As a result, the EC said it found Google’s comparison shopping service is much more visible to consumers in Google’s search results, while rival comparison shopping services are much less visible.

Speaking during a press conference about the ruling, Competition Commissioner Margrethe Vestager said: “Google has given its own comparison shopping service an illegal advantage by abusing its dominance in general Internet search. It has promoted its own service, and demoted rival services. It has harmed competition and consumers. That’s illegal under EU antitrust rules.”

“This decision requires Google to change the way it operates, and to face the consequences of its actions,” she added.

Google must end the censured conduct within 90 days — or face additional penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, its parent company, for each day of non-compliance. (Although any such fine for non-compliance would require a separate Commission decision — but would be backdated to the date of when the non-compliance started).

For some context on the size of the fine, Google’s (Alphabet’s) full year revenue for 2016 was almost $90BN. The Commission said the fine has been calculated on the basis of the value of Google’s revenue from its comparison shopping service in the 13 EEA (European Economic Area) countries concerned.

In an official statement on the decision, Vestager noted: “Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.”

Commenting on the Commission decision in a statement, Google’s Kent Walker, SVP and general counsel, said: “We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”

“When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products. That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both,” he added.

The company said it will “review the Commission’s decision in detail as we consider an appeal”.

Vestager confirmed it will be up to Google to come up with a remedy to comply with the Commission’s decision — although it will also face (likely years of) being closely monitored by regulators for compliance.

“The decision requires Google to stop its illegal conduct within 90 days. And Google must respect a simple principle — it has to give equal treatment to rival comparison shopping services and to its own. It has to apply the same method and processes to position and display its own and rival comparison shopping services in its search results,” she added.

“This means that Google cannot simply stop dong what it’s doing now and replace it with other practices that have the same or an equivalent anticompetitive effect. It is Google’s sole responsibility to ensure compliance. And it is for Google to explain how it intends to do so. I have no reason to believe that Google will not comply.”

Vestager further noted that “anyone who has suffered damage from Google’s illegal behavior can claim compensation from Google before national courts”.

Another key additional point of today’s decision is that the Commission has found Google to be a dominant company in Internet search — a finding which will now feed into any additional EU antitrust investigations into its behavior.

Not just other existing formal investigations, such as pertaining to Google’s search advertising; during the press conference Vestager noted that her department is also aware of complaints pertaining to other Google products, such as image search, maps and travel search. Although she stressed there are no formal investigations into those products at this point.

“A few words on concerns that Google may have abused its dominance as a search engine to give an illegal advantage to Google products other than Google Shopping,” she said. “We’ve been looking into this — and today’s decision is a precedent. A precedent which can be used as a framework to analyze the legality of such conduct.”

Her department would, however, be looking closely at the particular “characteristics, detail and difference” — as well as “the facts” — in each additional market where concerns are held about a Google product, she added.

“Today’s decision shows that in Europe companies must compete on their merits,” said Vestager. “Regardless of whether they operate online or on high streets, regardless of whether they’re European or not. We invite you to make the most out of the European market, and the potential of 500 million citizens — and therefore 500 million potential customers. And we congratulate you for being successful.

“But the applause stops when you stop competing on the merits. You’ll never get a free pass to stop competing on the merits — neither in the market you dominate, nor in other markets.”

Dominant companies, as Google has now been formally judged, “need to be more vigilant” and have a “special responsibility” to ensure they are not in breach of antitrust rules, she added, stressing this applied both “in the market where it’s dominant” and “in any other market”.

Welcoming the Commission’s decision, Shivaun Raff, CEO and co-founder of Foundem, the lead complainant in the case, said: “We welcome today’s announcement that the European Commission has adopted a Prohibition Decision in the Google Search case. Although the record-breaking €2.42BN fine is likely to dominate the headlines, the prohibition of Google’s immensely harmful search manipulation practices is far more important.  There can’t have been many Competition cases where the stakes for consumers, businesses, and innovation were any higher.

“For well over a decade, Google’s search engine has played a decisive role in determining what most of us read, use and purchase online. Left unchecked, there are few limits to this gatekeeper power. Google can deploy its insidious search manipulation practices to commandeer the lion’s share of traffic and revenues in virtually any online sector of its choosing, quietly crushing competition, innovation, and consumer choice in the process.”

The Commission still has two outstanding formal investigations into Google’s business — into its search advertising practices, and how it bundles other Google products with its Android mobile OS (which in some European markets has around an 80 per cent marketshare). On these ongoing investigations, Vestager had chilling words for Google — suggesting it is also inclining towards a conclusion of anticompetitive behavior. Although she emphasized no final decision has been made.

She said: “We are also making good progress with our two other pending enquiries into certain Google practices concerning Android, as well as search advertising. Our preliminary — and this is of course important, these are preliminary — conclusions in relation to both practices is that they breach EU antitrust rules.”

Froogle > Google Product Search > Google Shopping 

The Europe Union’s investigation into complaints about the Google Shopping service (previously called ‘Froogle’ and then ‘Google Product Search’) dates back more than six years, although the Commission only issued a formal Statement of Objections (SO) in April 2015, extending that in July last year with further objections — when it also issued objections against AdSense.

A third EC antitrust investigation pertains to Google’s mobile OS, Android, and remains ongoing.

The bloc’s law puts a special obligation on dominant companies not to abuse their power to try to harm existing competitors or block new entrants. And Google’s search engine is massively dominant in the region — accounting for more than 90 per cent of the market for search in Europe.

The complainants in the Google Shopping case have accused the company of demoting rival vertical search services in its general search results, and thereby depriving their businesses of scale and market access.

The original complaint to the EC that Google had manipulated search results to demote a rival service was made to the Commission by shopping comparison site, Foundem, in 2009 — who said its service effectively vanished from Google search results weeks after launch in 2006, and was not reindexed until years later to the clear detriment of the business.

A formal investigation into this complaint was opened by the EU in 2012, under the prior competition commissioner, who went on to reject three proposed settlements from Google.

Current competition commissioner Vestager then took up the post in 2014, by which time complainants numbered more than two dozen. She went on to issue formal charges against Google Shopping in 2015, and supplemental charges in 2016.

Last fall the Commission gave Google a series of extensions to respond to these charges. The company’s formal response finally came in November — when it argued: “There is simply no meaningful correlation between the evolution of our search services and the performance of price comparison sites.”

Evidently the Commission disagreed with Google’s defense its behavior.

Vestager touched on some of the company’s arguments in a Q&A during the press conference — saying it had analyzed and dismissed the notion that general Internet search is in competition with search within the “Amazon universe”, for example, as Google has tried to argue.

“Exactly this line of thinking and these argument was looked into in depth before we sent the supplementary statement of objection. And there we say we do not find that Google Shopping is in competition with Amazon and eBay and the like,” she said. “And the reason is because they are different. In Amazon and eBay you can search within the Amazon and eBay universe of different retailers.

“One of the things that you find in Google Shopping is, for instance, some of the major brands that you do not find in Amazon. Because these brands they would like themselves to have the consumer contact — their search pattern, their payment information, the information about what they have bought lately. You can find them on Google Shopping, you cannot find them in the Amazon universe. You also see that in the relationship with other shopping comparison services. Amazon could be a customer of Google Shopping but another comparison shopping service cannot be a customer of Google Shopping.”

“The competition that should be fierce should be the competition between shopping comparison services — and this is exactly the point of this case, that Google has used its dominant position in general Internet search to promote itself and demote its rivals of shopping comparison services in this particular market,” she added.

In a blog post responding to the Commission’s ruling at greater length today, Google continues to dispute the Commission — with Walker arguing that consumers shopping online want to find products “quickly and easily”, and that is why it links directly to products rather than to shopping comparison services.

“That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both,” he writes. “We believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections. While some comparison shopping sites naturally want Google to show them more prominently, our data show that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches.”

“We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago. Showing ads that include pictures, ratings, and prices benefits us, our advertisers, and most of all, our users. And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay,” he adds.

During the press conference Vestager spent some time detailing her approach to the case, which she inherited from prior commissioner, Joaquín Almunia, after his attempts at reaching settlement solutions with Google had failed.

“I chose to take the case forward in a different way,” she said. “Before reaching today’s conclusion we have analyzed huge quantities of data. This includes 5.2TB of actual search results from Google — that is more or less the equivalent of 1.7BN search queries.

“It’s a lot of data. And it is of course needed — because our decision has to be based on firm evidence. We have to prove our points, even if they may seem intuitive.”

She noted, for example, that the Commission looked at the impact of having a prominent place in Google’s search results — first analyzing studies on user click behavior, which she said “indicated there is a link” between a prominent placement and more traffic. But also running further tests to determine whether users are clicking on the top result because it’s more relevant, i.e. not just because it’s most prominent.

“We simulated what happens when you swap the ranking of generic results — and this confirmed that the same result receives significantly more traffic when ranked higher up,” she said.

And while she noted that the EC had not found specific evidence of intent by Google “when it comes to demoting rivals”, it found enough evidence of the impact of systematic demotions of rival services by Google’s algorithms and promotions of its own services to conclude that Google’s behavior was anticompetitive.

“The Commission found evidence of sudden drops in clicks on certain rival websites of more than 90 per cent after Google applied demotions,” noted Vestager. “Some of them adapted and managed to recover some of the traffic, but never in full.”

“There are high barriers to entry in the market. The more consumers use a search engine, the more attractive it becomes to advertisers. The profit generated in term can be used to attract even more consumers, similarly the more data a search engine gathers from consumers, well, the better equipped it is to improve its results,” she added.

The Commission said that Google implemented the “illegal practices” pertaining to price comparison services everywhere it offers its own comparison shopping service — starting as early as 2008 in Germany and the UK, followed by France, Italy, the Netherlands, Spain, the Czech Republic and finally Austria, Belgium, Denmark, Norway, Poland and Sweden; an area with some 418 million citizens.

“Google’s practices have deprived millions of European consumers of the full benefits of competition, genuine choice and innovation,” she added.

She said the Commission’s full decision will be published online in due course, after it has agreed with Google and third parties on any confidential business secrets that need to be redacted.

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