European Union accuses Google Shopping of search abuse 

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April 15, London: The European Union has filed a complaint against Google over its alleged anti-competitive behaviour.

The competition commissioner said she had issued a “statement of objection”, stating that the firm’s promotion of its own shopping links amounted to an abuse of its dominance in search.

Margrethe Vestager said Google now had 10 weeks to respond. She added that she had also launched an investigation into Google’s Android operating system.

And the commissioner said the EU would continue to monitor other activities by Google that its rivals had complained about. It follows a five-year investigation into the company and could ultimately lead to billions of euros of fines. Google has yet to give an official response, but has told its staff that it has a “very strong case”.

Google accounts for more than a 90% of EU-based web searches, something the EU described as a “dominant” position.

The European Commission has investigated the antitrust allegations – made by Microsoft, Tripadvisor, Streetmap and others – since 2010.

They object to the fact that the firm places adverts from its Google Shopping service ahead of others’ links in relevant searches.

“Google’s abuse of dominance distorts European markets, harms consumers, and makes it impossible for Google’s rivals to compete on a level playing field,” said Icomp, a lobbying group representing the complainants. “We see this statement of objection as a crucial first step towards ensuring that European consumers have access to vibrant and competitive online markets.”

Last year, Google agreed to alter the way it displayed its search results, but the changes it suggested were deemed to be insufficient.

The previous competition commissioner, Joaquin Almunia, asked the company to come up with a new plan. He left his post without resolving the matter, and was criticised by some politicians for not having taken a firmer stance.

Ms Vestager, his successor, has taken a tougher line by issuing a “statement of objection”. This involves sending a letter that sets out all the objections the commission can base its final decision on, and is a legal requirement, providing Google an opportunity to respond before action is taken.

Google could face huge fines and be ordered to reshape its business in Europe.

In recent years, the Commission has imposed antitrust penalties on other tech giants, ordering Intel to pay €1.1bn (£793m; $1.2bn) in 2009 and Microsoft €516m in 2013.

However, Ms Vestager said she was “open” to Google’s response, and wanted to listen to its case before deciding how to proceed.

Thomas Vinje, spokesman for FairSearch Europe, said issuing a statement of objections would “represent a significant step towards ending Google’s anti-competitive practices, which have harmed innovation and consumer choice”.

But one independent expert said that the matter could take years to resolve.

“Google’s search engine makes it a gatekeeper to different markets in which Google itself also operates,” said Paul Henty, a lawyer at Charles Russell Speechlys who has previously worked for the European Commission.

“I think the Commission will want to send an unequivocal message that it has a special responsibility to give its rivals fair and equal access to customers.

“But I can’t see that this will be a fast process given the complexity of the subject matter, what’s at stake and the likely level of the fine.”

In an internal memo to its staff, Google insisted that competition to its search business was “thriving” despite allegations to the contrary.

“People can use Bing, Yahoo, Quora, DuckDuckGo, and a new wave of search assistants like Apple’s Siri and Microsoft’s Cortana,” it said.

“In addition, users increasingly turn to social networks like Facebook and Twitter to find news and suggestions – where to eat or which movies to watch.

“[And] mobile is changing everything – with the explosion of apps taking people directly to the information they want.”

The Oslo Times

Sources

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