EU v. Google: What Each Side Is Saying


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The European Union on Wednesday formally accused Google of abusing its dominant power in web search in violation of antitrust laws.

The action is potentially the most significant antitrust case in the tech industry since regulators on both sides of the Atlantic tangled with Microsoft beginning in the late 1990s and could lead to years of legal wrangling. It could force Google to pay billions in fines or to alter the way it presents search results.

Specifically, the European Commission said that Google’s GOOGL +0.26% promotion of its own comparison shopping search function may “artificially divert traffic from rival comparison shopping services and hinder their ability to compete on the market.” The commission, which has been investigating Google’s search practices for about 5 years, detailed its concerns, known as a Statement of Objections, on Google’s comparison shopping service here.

The accusations did not extend to other areas of search, like reviews and travel that Google’s rivals like Yelp YELP +4.14% and TripAdvisor TRIP -0.23% had complained about.

But the EU antitrust chief, Margrethe Vestager, also opened a formal investigation into whether Google has violated European antitrust laws with its Android operating system and related mobile services. The commission said it is concerned that Google may have hindered market access to rival mobile apps by pushing Android phone makers to pre-install its suite of mobile services, which include search, maps, Google Drive and the Play store. It also said it is concerned Google may have hindered market access to makers of modified versions of Android. The commission’s full concerns on Android are detailed here.

Google put out a vigorous defense. In a blog post, Google’s search chief Amit Singhal said that people have more search choices today than ever before, and that competition among shopping search engines is thriving. “Indeed if you look at shopping—an area where we have seen a lot of complaints and where the European Commission has focused in its Statement of Objections—it’s clear that (a) there’s a ton of competition (including from Amazon and eBay EBAY +0.09%, two of the biggest shopping sites in the world) and (b) Google’s shopping results have not the harmed the competition,” Singhal wrote.

In a separate blog post, Hiroshi Lockheimer, an engineering vice president for Android, rebutted the commission concerns regarding Google’s mobile operating system. “Android has been a key player in spurring this competition and choice, lowering prices and increasing choice for everyone,” Lockheimer wrote.

Google will now has 10 weeks to respond to the commissions charges. The commission will then evaluate those responses and potentially recommend remedies.

Source: http://www.forbes.com

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