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Google Accused of Cheating Competitors
Google Accused of Cheating Competitors
Margrethe Vestager, the European Union’s competition commissioner, accused Google of distorting Internet search results and began an antitrust investigation into its Android mobile operating system.
By Reuters on Publish Date April 15, 2015. Photo by John Thys/Agence France-Presse — Getty Images.
BRUSSELS — The European Union’s antitrust chief on Wednesday sought to bring the American Internet giant Google to heel, accusing the company of abusing its dominance in web searches to the detriment of competitors.
It is the first time that antitrust charges have been brought against Google, and the action raises pressure on the company to address complaints that a previous European commissioner allowed to play out for five years without resolution.
Looking ahead to another big digital market that Google dominates, the antitrust official, Margrethe Vestager, opened an investigation into whether the company’s Android smartphone software forces phone makers to favor Google’s own services and applications over competitors’.
“If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe,†said Ms. Vestager, the European Union’s competition commissioner.
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How Google responds and whether any changes it might make would hamper its own business or aid its rivals remain to be seen. Google contends that in both web searches and Android software it plays fair. But by filing formal charges, Ms. Vestager put the company on a 10-week timetable to respond to the search complaint.
A large number of online operators have complained about Google in other areas, like travel and mapping. Ms. Vestager said that the inquiry might eventually expand to include those services.
In the United States, the Federal Trade Commission investigated similar complaints against Google, but closed that inquiry in 2013 without reaching a formal finding of wrongdoing — despite an agency staff report, which subsequently surfaced, recommending stronger action. The action in Brussels on Wednesday is not expected to change Washington’s position that Google’s search business does not violate antitrust laws.
In fact, the case could increase political tensions between the European Union and United States. In February, President Obama warned Europe against making “commercially driven†decisions to penalize companies like Google and Facebook.
On Wednesday, shortly before Ms. Vestager made her announcement, Daniel A. Sepulveda, a deputy assistant secretary in United States State Department’s Bureau of Economic and Business Affairs, told reporters in Brussels that Washington respected European law enforcement in the case concerning Google.
But he added a warning. “It’s important,†Mr. Sepulveda said, “that the process of identifying competitive markets and remedies be based on impartial findings and not be politicized.â€
In some ways, Europe’s pressing a case against Google that United States officials declined to pursue is emblematic of the different regulatory and business environments on both sides of the Atlantic.
In the United States, new businesses and technologies tend to be given much freer rein, unless they are proved problematic. That contrasts with the more cautious approach in Europe – where protecting privacy and personal data, and closely supervising business and industry, often take precedence over free-market innovation.
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A Google search Wednesday morning for laptop computers displayed a module for Google’s comparison shopping service, which the European Commission has said is unfairly promoted.
Ms. Vestager insisted on Wednesday that she was on the side of “consumer choice and innovation†on the Internet. “We are not here to take the side of rivals — we are here to take the side of competition,†she said.
Even so, the same forces that have enabled American tech titans to become so dominant might also help explain why Europe has fostered so few world-class technology companies of its own to compete with the American giants.
Wednesday’s action had been widely anticipated in recent days and was confirmed on Tuesday in a memo that Google sent to its employees. Ms. Vestager and Google executives had held at least one face-to-face meeting in recent weeks in an effort to find common ground, but apparently to no avail.
The biggest American tech companies are facing intensifying scrutiny by European regulators and the potential that tax, antitrust and privacy rulings could cut into their sizable profits in the region and affect how they operate around the world.
Europe’s antitrust officials are reviewing low-tax arrangements granted to Apple in Ireland and to Amazon in Luxembourg, and privacy watchdogs are looking into how securely companies like Facebook are protecting people’s online data.
Policy makers are also investigating whether American Internet platforms like Amazon have too much control over how Europeans gain access to online services. And in response to a court order, Google in the European Union is having to remove some links in online searches in response to people’s declared “right to be forgotten.â€
Ms. Vestager seemed intent Wednesday on staving off criticism that the European Union was being
The biggest American tech companies face intensifying scrutiny by European regulators, with — pressure that could potentially curb their sizable profits in the region and affect how they operate around the world.
“The decision by the commission to position itself as the lead competition authority for the digital age may trigger anger among some U.S. politicians, and there is no denying that the U.S. industry has been at the forefront of technology,†said Emanuela Lecchi, a partner in London at the law firm Watson Farley & Williams.
“But this is only half the story,†she said, “because there are American major players including Microsoft and TripAdvisor that have been very vociferous against Google, too.â€
Google on Wednesday defended its business practices.
“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,†Google
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