Google Antitrust Charges Come From Europe
The European Union took its five-year antitrust probe into overdrive against Google Inc. Wednesday, accusing the U.S. search giant of violating the bloc’s antitrust laws and opening a formal probe aimed at the Android operating system for mobile phones.
The Google Antitrust charges from the EU’s competition regulator are a big setback for Google, reopening the prospect of large fines and sanctions that could severely restrict how the U.S. firm does business in Europe.
This is the first time formal antitrust charge against Google, putting the EU in the forefront of a global debate over the regulation of giant Internet platforms.
The charges “just put [Google] in a worse position, by reducing their leverage in bargaining” with EU regulators, said Keith N. Hylton, a law professor at Boston University.
At a news conference, Margrethe Vestager, the EU’s new antitrust chief, said she had reached the preliminary conclusion that Google abuses its dominant position in search to systematically favor its own comparison shopping services, Google Shopping, over rival services on its general search page. This unacceptable conduct started in 2008, the EU said.
“I’m concerned that Google has artificially boosted its presence in the comparison shopping market with the result that consumers do not see what’s relevant for them,” Ms. Vestager said.
In a statement posted by Google online, the tech firm says it strongly disagrees “with the need to issue a statement of objections and look forward to making our case over the weeks ahead.” A statement of objections is the formal name for EU antitrust charges.
“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. In fact, people have more choice than ever before,” Google said in an online blog.
If the EU proves that Google antitrust has violated competition law in comparison shopping, that “could potentially establish a broader precedent” that would also impact other fields, such as travel websites, Ms. Vestager said.
EU’s concerns were based on tweaks to its search page, such as reserving space near the top of the page for competitors to serve specialized search results for things like hotel rooms alongside Google antitrust services that did the same thing.
That type of solution, Ms. Vestager said, was unlikely to cut it this time.
“I’m looking for something based on principal and hopefully future-proof,” she said. “For me, the design of the screen that meets you is also an innovative process. For me, it would be better to have a solution based on principle rather than a particular look of the screen.”
The decision to investigate Google antitrust conduct in relation to Android is important as an ever-greater share of Internet usage shifts to mobile devices.
The investigation into Android will focus on whether Google leveraged its market power to illegally hinder rival mobile operating systems and mobile applications, for instance by requiring manufacturers to pre-install its own applications and by bundling its products with other Google products.
Google said its partner agreements with Android were voluntary but provide real benefits to Android users, developers and the broader mobile market. It also said its app distribution agreements with manufacturer made sure “people get a great ‘out-of-the-box’ experience with useful apps right there on the home screen.”