LatestNews: EU accuses Google of abusing Internet search dominance

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The E.U.’s antitrust commissioner is going to file charges against Google, according to reports. Video provided by Newsy Newsy

In this April 17, 2007, file photo, Google employees work on laptop computers in front of an illuminated sign of the Google logo at an industrial fair in Hannover Messe, Germany.(Photo: AP)

The European Union’s competition regulator on Wednesday accused Google of illegally abusing its dominance of the Internet search market in Europe by favoring its own comparison-shopping product when consumers shop online.

The case could cost the tech firm billions in fines or even force Google to make significant changes to its business in Europe. It also revives memories of Microsoft’s decade-long antitrust fight with the EU. That case ended in 2009 with Microsoft paying over $ 2 billion in fines to the EU’s competition commission.

EU Competition Commissioner Margrethe Vestager said Wednesday in a statement unveiling an investigation that she is “concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules. Google now has the opportunity to convince the commission to the contrary.”

Vestager also is probing Google’s Android mobile operating systems, apps and services. Vestager said that she wants to “make sure the markets in this area can flourish without anti-competitive constraints.”

Google accounts for 90% of all Internet searches in Europe and the commission alleges the Internet giant broke antitrust regulations by siphoning traffic from its competitors to its own services.

The commission said Google “may be artificially divert(ing) traffic from rival comparison shopping services (to its Google Shopping) and hinder their ability to compete.”

The EU has been investigating Google for five years. The California-based technology giant was not immediately available for comment on the new charges.

However, in a memo to employees that was leaked to the re/code technology website on Tuesday, Google said it had a “very strong case” against the charges.

Part of its defense, the memo said, would be that Google offers consumers a quicker, more direct service.

Google nearly settled the case without any charges last year but the deal fell apart over objections from ministers in France and Germany and powerful tech groups.

Google also defended its Android platform in a blog post published Wednesday, claiming its open-source operating system benefits consumers.

“The European Commission has asked questions about our partner agreements,” says Hiroshi Lockheimer, vice president of engineering for the Android division. “It’s important to remember that these are voluntary — again, you can use Android without Google — but provide real benefits to Android users, developers and the broader ecosystem.”

Over a period of ten years, Microsoft was fined by the European Commission for monopolistic business practices related to the software giant’s operating system.

Then-EU Competition Commissioner Neelie Kroes argued that consumers in Europe would benefit from having a choice of Internet browsers bundled with the firm’s Windows software. Microsoft was fined as late as 2013 for failing to comply with a settlement that mandated it offer easier access to the products of its rivals.

Vestager did not say how long the commission intends to spend conducting its investigations or how long Google has been given to reply to the allegations.

“To us the most important risks associated with an eventual long term antitrust proceeding would be related to the risk that it could consume valuable management bandwidth, and impose limitations on Google’s ability to innovate in search in Europe for years to come,” Sanford C. Bernstein analyst Carlos Kirjner wrote in a research note.

Jessica Guynn reported from San Francisco; Kim Hjelmgaard reported from London.

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