Summary:Google is to be accused of illegally using its dominance in search in the European market to favour its own services and harm rivals.
The European Commission is today expected to formally charge Google with violating EU competition law by abusing its dominance in search to gain an edge over specialist rivals.
The charges could force Google to change the way it does business and pay fines of up to $ 6.4bn, or approximately 10 percent of its global revenues last year.
On Tuesday the Financial Times reported on Wednesday the European Commission would serve Google with a formal charge sheet outlining its statement of objections.
EC competition Margrethe Vestager will claim the company illegally diverted traffic from rivals to its own services, sources told the FT. They said the initial charge will target the harm Google allegedly caused to other shopping sites by promoting its own vertical search services when product searches were made on Google, though the charges could be broader.
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A fortnight ago, Vestager sought permission from complainants to publish their claims, suggesting that formal charges were imminent. Past complainants include Microsoft, TripAdvisor, and Yelp, as well several German and French publishers.
The charges will bring to a head the EC’s five-year investigation into Google’s business practices in Europe, where it has a market share of over 90 percent share for search. The investigation has previously focused on whether Google used its dominance to give its own specialised searches in shopping, travel and other categories an edge over rivals’, as well as claims Google reused content from rivals without authorisation, and forced publishers to use Google ads.
According to the FT, some of the 28 commissioners that will be shown the charges today are concerned that Vestager has narrowed the scope of the claims against Google.
Vestager’s office had no comment on the FT‘s report when contacted by ZDNet. ZDNet has also sought comment from Google and will update the story if it receives one.
Google has however acknowledged the charges in a letter to staff yesterday, reprinted by Recode, noting that it was “obviously very disappointing news”, warning staff to expect “tough” criticism.
As Google points out though, the statement of objections is not a final finding and it has the opportunity to respond and have the claims modified – a process that could take two years.
One of the key reference points for the EC’s actions against Microsoft in 2007, which ultimately saw the company fined hundreds of millions of euros. If the EC proceeds with a $ 6bn fine it would become the largest fine it has issued to date.
However, in its memo, Google told staff it has a “very strong case”, that competition was alive and well, and noted that mobile and apps “has changed everything”, offering consumers a way to get information directly from a mobile app rather than via search.
“The competition is just one click away – and it’s growing. People can use Bing, Yahoo, Quora, DuckDuckGo, and a new wave of search assistants like Apple’s Siri and Microsoft’s Cortana, as well as more specialized services like Amazon, Idealo, Le Guide, Expedia, or eBay. In addition, users increasingly turn to social networks like Facebook and Twitter to find news and suggestions – where to eat or which movies to watch,” Google said.
Google also acknowledged the EC’s plan to launch an investigation into Android. Google has faced a number of complaints from rivals, including over its bundling of Google apps like YouTube and Maps as well as complaints Google has blocked third-party app stores on Android.
Here too, Google says it has a strong case, since Android had lowered prices and increased choice for consumers and pointed out that Samsung’s new Galaxy S6 included pre-installed apps from rivals.
“Consumers decide which apps they use and download on Android devices. Apps that compete directly with Google such as Facebook, Amazon, Microsoft Office, and Expedia are easily available to Android users; and
“Many of these apps come pre-loaded onto Android devices. Google apps, like Search, Maps, Gmail, and Google Play, are also available out of the box on many handsets. The recent Samsung S6 is a great example of this – there are pre-installed Facebook, Microsoft, and Google apps.”
Read more on this story
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Europe to slug Google with antitrust charges and open Android probe - ZDNet
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