European Commission expands its probe of Google’s shopping and advertising services with additional “objections”
The European Commission (EC) has announced additional charges against Google, after it sent two ‘statements of objections’ to the search engine giant and its parent company, Alphabet.
It objects to the way that Google implements strict contractual terms with its advertising service (Adsense) and its conduct relating to its shopping service.
The EC filed a statement of objections last year alleging Google had abused its dominant position in the search market in an investigation that dates back to November 2010.
Adverts and Shopping
But now the European Competition Commission has “reinforced” the charges it filed in April 2015, with a “supplementary” statement of objection that Google abused its dominant position by systematically favouring its comparison shopping service in its search result pages.
It has also separately sent the company a statement of objection that it abused its dominant position in the advertising market by artificially restricting the possibility of third party websites to display search advertisements from Google’s competitors.
Google may face a fine of as much as €3 billion (£2.3bn) over its alleged search engine abuse.
“Google has come up with many innovative products that have made a difference to our lives,” said Commissioner Margrethe Vestager, who is in charge of competition policy. “But that doesn’t give Google the right to deny other companies the chance to compete and innovate.”
“Today, we have further strengthened our case that Google has unduly favoured its own comparison shopping service in its general search result pages. It means consumers may not see the most relevant results to their search queries. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation.
The Commission said that it had noted Google response to last year’s antitrust complaints in which it said the Commission was “wrong”, but the antitrust branch said that it had carried out “further investigative measures” which “reinforces the Commission’s preliminary conclusion that Google has abused its dominant position.”
Essentially, the Commission feels that Google systematically favours its own comparison shopping service in its general search results over Google competitors. It said that Google’s conduct has “weakened or even marginalised competition from its closest rivals.”
The Commission also objects to the way Google places restrictions on the ability of certain third party websites to display search advertisements from its competitors.
“Google places search ads directly on the Google search website but also as an intermediary on third party websites through its ‘AdSense for Search’ platform,” it said. “These include websites of online retailers, telecoms operators and newspapers. The websites offer a search box that allows users to search for information. Whenever a user enters a search query, in addition to the search results, also search ads are displayed. If the user clicks on the search ad, both Google and the third party receive a commission.”
It said that a large proportion of Google’s revenues from search advertising intermediation stems from its agreements with a limited number of large third parties and it has concerns that these agreements break antitrust regulations.
Google’s alleged abuse of its dominant search engine business is not the only probe of the company taking place at the moment.
Earlier this week Google won more time to answer the Android accusations, and now has until 7 September to response.
It had faced a deadline of 27 July to respond to the allegations.
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