Margrethe Vestager, Europe’s competition chief, is under pressure to make a case against the dominant online search giant. Credit Olivier Hoslet/European Pressphoto Agency
LONDON — The European Commission is said to be planning to charge Google with using its dominant position in online search to favor the company’s own services over others, in what would be one of the biggest antitrust cases here since regulators went after Microsoft.
Europe’s competition chief, Margrethe Vestager, is expected to make an announcement in Brussels on Wednesday that Google has abused its dominant position, according to two people who spoke Tuesday on the condition of anonymity.
The decision to push ahead with a so-called statement of objections is the latest twist in the lengthy investigation into Google’s activities in Europe, where it holds a roughly 90 percent share in the region’s search market. If Europe is successful in making its case, the American tech giant could face a huge fine and be forced to alter its business practices to give smaller competitors like Yelp greater prominence in its search queries.
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A representative for Google declined to comment on any potential action by the European authorities. But in an internal memo to employees, first obtained by the technology news site Re/code, the company said it expected the commission to file a statement of objections about how the company displays search results, particularly for shopping. It also expected the authorities to open an investigation into Android, the Google software that runs a majority of the world’s smartphones.
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An example of Google search results for gas grills from last year, top, compared with how competitors’ promoted products could have appeared under a proposed settlement. The settlement faced opposition from Google’s competitors, and it ultimately did not go through. Credit European Commission
“We have a very strong case, with especially good arguments when it comes to better services for users and increased competition,†the memo said. “All told, consumers have a lot of choice — and they are exercising it. And many, many other companies have very successful mobile businesses — including Apple, the most valuable (mobile) company in the world.â€
It is still unclear what specific accusations Ms. Vestager plans to include in the charges against Google. But the pressure the company faces in Europe is just one of the regulatory problems that American tech giants like Amazon, Facebook and Apple are facing across the 28-member bloc.
Europe’s antitrust officials have already opened investigations into whether Apple and Amazon received preferential treatment in their low-tax arrangements — Apple in Ireland and Amazon in Luxembourg. In addition, privacy watchdogs across the region are asking whether companies like Facebook have securely protected 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.
European lawmakers have said that these inquiries are not specifically aimed at American tech companies, though many industry executives say they are aimed at helping European tech companies, which have so far been unable to rival their much larger United States competitors.
The investigation against Google has already dragged on for nearly five years at the
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.
If Google fails to rebut any formal charges, Ms. Vestager could levy a fine that could exceed 6 billion euros, or $ 6.4 billion — about 10 percent of Google’s most recent annual revenue. But the largest single fine yet levied in such a case falls well short of that mark: The record is €1.1 billion in 2009 against Intel for abusing its dominance of the computer chip market.
The commission previously spent years reining in Microsoft, which accrued a total of almost €2 billion in European fines over a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.
Google still could settle the matter. But whatever the search giant might negotiate with the commission, analysts say, the deal will have a greater impact on its business than previous attempts to settle. Ms. Vestager’s predecessor, JoaquÃn Almunia, gave Google three opportunities to make concessions that were aimed at allowing the company to escape both a fine and a formal finding of wrongdoing.
Those settlement efforts repeatedly ran afoul of Google’s rivals, including American companies like Microsoft and Yelp, which successfully complained that most of the changes proposed by Google have been insufficient to solve the antitrust concerns identified by regulators.
“Everyone should have equal treatment,†said Thomas Vinje, a lawyer for FairSearch Europe, which represents Google rivals. “Google should apply its own algorithm fairly to everything, including its own services.â€
Ms. Vestager has come under pressure from the European Parliament to hasten a decision since lawmakers passed a nonbinding resolution last year calling on her to consider breaking up Google.
While it is unlikely that Europe could force Google to divide its current operations, the European Parliament’s resolution was backed by significant numbers of lawmakers. Still, some politicians voiced concern that Europe was unfairly targeting Google.
Ms. Vestager “should be congratulated for securing such swift progress,†said Fredrick Federley, a Swedish member of the European Parliament.
But the real challenge for Europe, he said, is to develop its own digital champions.
“Instead of finding ways to punish successful American companies,†Mr. Federley said, “we should be asking ourselves why there are so few homegrown competitors to these giants.â€
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Google Expected to Face Antitrust Charges in Europe - New York Times
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