The European Competition Commission, has as widely expected, laid the ground for formal antitrust charges against Google.
The European Commission confirmed it has sent Google its “Statement of Objections”, alleging that Google has abused its dominant position in the search engine market.
The EC also formally opened a separate antitrust investigation into Google’s conduct regarding the Android operating system.
But Google has fired back and said that it “respectfully but strongly disagrees” with the EC Statement of Objections.
It said that its preliminary view is that such conduct infringes EU antitrust rules because it stifles competition and harms consumers.
And to make matters worse, the Commission also confirmed that it has opened a separate antitrust investigation into Google’s Android. That probe will focus on whether Google has entered into anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices.
“The Commission’s objective is to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation,” said EU Commissioner in charge of competition policy Margrethe Vestager.
“In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” she added. “Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”
“I have also launched a formal antitrust investigation of Google’s conduct concerning mobile operating systems, apps and services,” said Vestager. “Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.”
But Google has hit back at the EC in a blog posting that highlighted the amount of competition in the online travel and other shopping comparisons sector.
“Indeed if you look at shopping – an area where we have seen a lot of complaints and where we understand the European Commission will focus its Statement of Objections – it’s clear that (a) there’s a ton of competition (including 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,” wrote Amit Singhal, Senior VP, Google Search.
“Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating – or dominated by one player. Yet that is exactly what’s happening in our world,” wrote Singhal, before highlighting the competition in the online shopping sector.
“It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead,” he concluded.
The antitrust investigation of the search engine has been a very protracted affair indeed, after the European Commission launched its investigation back in November 2010, into whether Google abused its dominant position in the online search market.
The EC probe into Google’s search products came it received complaints from a number of its competitors including Microsoft, TripAdvisor, Nokia and Expedia.
Essentially, these companies claimed that Google had abused its dominant position in the online search market to shut out rivals in areas such as price comparison, navigation and advertising. It is also investigating whether Google has been “scraping” content from rivals’ sites, and unfairly restricting advertisers and software developers who do business with the search giant.
Google of course dominates the search engine market in Europe, and although it is not illegal to hold a monopoly, it is forbidden to abuse it.
In the course of negotiations Google missed several deadlines, tabled a total of three different proposals and even the company’s chairman Eric Schmidt got involved. In July 2012, it emerged that Google agreed to add Android to the list of platforms on which it would redesign the search algorithms.
And then in early 2014, it was reported that Google had finally reached a settlement agreement with the competition commissioner. But that prompted a howl of protests from rivals, forcing the EC to “revise” its decision.
Last September the chief executive of News Corporation Robert Thomson urged the EC to crack down further on Google. In his letter, Thomson lambasted Google and said it was contemptuous of intellectual property and routinely adjusted its search results in none-objective manner.
Prior to that in April 2014, the CEO of Axel Springer, launched a scathing attack on Google. Mathias Dopfner accused Google of creating an “electronic superstate”, as well as operating a protection racket and a ‘global network monopoly‘ in the digital market.
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