EU raises stakes in Google battle with an­titrust charges


The Euro­pean Union charged Google on Wed­nes­day with abus­ing its over­whelm­ing dom­i­nance in In­ter­net searches and opened a probe into its An­droid mo­bile sys­tem, mas­sively rais­ing the stakes in the five-year an­titrust battle.

The move could lead to bil­lions in fines for Google if the case shows that the way it does busi­ness in the 28-coun­try bloc is il­le­gal, as well as years of legal wran­gling.

The EU can im­pose fines of 10 per­cent on an­nual rev­enue, or some US$6 bil­lion, and force the com­pany to over­haul its sys­tem for rec­om­mend­ing web­sites in Europe.

The EU ex­ec­u­tive com­mis­sion said it found that Google “gives sys­tem­atic fa­vor­able treat­ment” to its Google Shop­ping at the ex­pense of oth­ers in its gen­eral search re­sults.

Mar­grethe Vestager, the EU’s com­pe­ti­tion com­mis­sioner, said that was a prob­lem be­cause Google is so dom­i­nant in Europe. It has a mar­ket share of over 90 per­cent of In­ter­net searches in the EU, com­pared with around 70 per­cent in the U.S.

“It is not based on the mer­its of Google Shop­ping that Google Shop­ping al­ways comes up first,” Vestager said. “Dom­i­nant com­pa­nies have a re­spon­si­bil­ity not to abuse their pow­er­ful mar­ket po­si­tion.”

She said her chief goal was to make sure multi­na­tion­als do not ar­ti­fi­cially deny Euro­pean con­sumers as wide a choice as pos­si­ble or sti­fle in­no­va­tion. She noted that one in four com­pa­nies com­plain­ing about Google were U.S. ri­vals.

Monique Goyens, direc­tor gen­eral of the Euro­pean Con­sumer Or­gan­i­sa­tion, said that “Google’s mar­ket share means it es­sen­tially de­cides which com­pa­nies are placed in the shop win­dow.”

In the sep­a­rate probe into An­droid, the EU al­leges that Google is break­ing the rules by ob­struct­ing ri­val op­er­at­ing sys­tems, ap­pli­ca­tions and ser­vices, hurt­ing both con­sumers and in­no­va­tors.

The EU has for years sought a set­tle­ment with Google, but says the com­pany has not fully ad­dressed its con­cerns. The com­pany based in Moun­tain View, Cal­i­for­nia, on Wed­nes­day de­nied the EU al­le­ga­tions.

Google has 10 weeks to re­spond to all the lat­est al­le­ga­tions.

Amit Sing­hal, the se­nior vice pres­i­dent for Google Search, said that “while Google may be the most used search en­gine, peo­ple can now find and ac­cess in­for­ma­tion in nu­mer­ous dif­fer­ent ways — and al­le­ga­tions of harm, for con­sumers and com­peti­tors, have proved to be wide of the mark.”

When it comes to com­par­a­tive In­ter­net shop­ping, Sing­hal wrote in a blog that “it’s clear that (a) there’s a ton of com­pe­ti­tion (in- clud­ing from Ama­zon and eBay, two of the big­gest shop­ping sites in the world) and (b) Google’s shop­ping re­sults have not the harmed the com­pe­ti­tion.”

Thomas Vinje, legal coun­sel for FairSearch Europe, a group that has been urg­ing EU reg­u­la­tors to rein in Google, said that Wed­nes­day’s move was “a sig­nif­i­cant step to­wards end­ing Google’s an­ti­com­pet­i­tive prac­tices, which have harmed in­no­va­tion and con­sumer choice.”

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