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EU charges Google with market abuse

Brussels [AFP]

The European Union has formally charged Google with abusing its dominant position as Europe’s top search engine, laying the US internet giant open to a massive fine of more than $US6 billion ($A7.87 billion).

The European Commission also said it would open a separate anti-trust investigation into Google’s Android operating system, which dominates the global mobile phone market.

The Commission, which polices EU competition policy, said it had sent a formal Statement of Objections to Google charging it with ‘systematically favouring its own comparison shopping product in its general search results pages.’

‘The Commission’s preliminary view is that such conduct infringes EU anti-trust rules because it stifles competition and harms consumers,’ a statement said.

The Commission said it would continue to examine three other areas of concern – copying of rivals’ web content, exclusive advertising regimes and undue restrictions on advertisers – identified in probes dating back to 2010.

In a potentially hugely important development, a separate investigation will be conducted into ‘Google’s conduct as regards the mobile operating system Android’.

‘The investigation 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 statement said.

If found at fault under EU anti-trust rules, a company faces a fine of up to 10 per cent of its annual sales – in Google’s case, $US66 billion in 2014.

EU Competition Commissioner Margrethe Vestager said the aim was to ensure ‘companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation’.

‘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.’

Google has 10 weeks to reply on this count, but if the formal investigation finds the company in the wrong it would ‘face the legal consequences and change the way it does business in Europe,’ Vestager said.

She told a press conference that the door remained open to an amicable settlement and she called on Google to take every opportunity to discuss the issues with Brussels.

In two blog posts in response, Google said that in search, there was in fact ‘more choice than ever before.’

‘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.’

The company said its Android system had been a key driver of innovation and had benefited others, not hindered them.

‘We look forward to discussing these issues in more detail with the European Commission over the months ahead,’ the post said.

 


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