Google: anti-trust claims ‘unfounded’
GOOGLE has emphatically denied charges that it is abusing its dominance in online searches to harm price comparison websites, rejecting claims from European authorities that the internet giant is in breach of competition law.
The company last night submitted a formal response to official accusations from the European Commission, saying that “statement of objections” (SO) allegations of Google unfairly promot- ing its own internet shopping services are “incorrect” and “unfounded”.
The 150-page response is the latest salvo in the five-year investigation of the search giant that in theory could lead to a fine of billions of dollars. It comes five months after Margrethe Vestager, Europe’s competition commissioner, charged Google with exploiting its monopoly in online searches to boost its price comparison service at the expense of rivals.
Google’s rejection of the charges potentially sets it up for further battles with European authorities, which are also investigating whether Google uses its dominant Android smartphone software to promote its services.
Searching Google for consumer products such as televisions and clothes often yields a results page giving heavy prominence to an eye-catching box of pictures and links, which retailers pay Google to feature in. The EC claims this feature, introduced in 2012, means Google is using its 90pc share of Europe’s search market to crush rival comparison websites. In its response, Google denied that competition had been harmed by introducing the feature. It said the last decade had seen traffic to price comparison websites from Google rise 227pc, and denied that shoppers were worse off, claiming that consumers were increasingly going directly to Amazon and eBay to buy goods.
The company also insisted that, rather than using its dominance to control shoppers’ options, “Google increases choice for European consumers”. “We believe that the SO’s preliminary con- clusions are wrong as a matter of fact, law, and economics,” Google said.
“The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers. Our response provides evidence and data to show why the SO’s concerns are unfounded… [it shows] why the statement of objections is incorrect in failing to consider the impact of major shopping services like Amazon and eBay, who are the largest players in this space.” Ms Vestager’s officials will now examine Google’s response and decide how to proceed.
They may amend the SO or, if it is seen as invalid, proceed with action against the company. In theory, the company could be fined up to 10pc of its global revenues, which would amount to almost $7bn (£4.5bn).
Google will be keen to avoid the same fate as Microsoft, which was dragged through a lengthy battle with the previous competition commissioner, Joaquín Almunia, before being fined $731m in 2013.