EU Announces Antitrust Charges Against Google

googleEU  Announces Antitrust Charges Against Google

European Competition Commissioner Margrethe Vestager (Denmark) announced it has served Google with a formal complaint (called a Statement of Objections) alleging that it unfairly prioritized its own Google Shopping search results over comparison shopping sites.  if the charges are proven,  Google could face up to $6.4 billion in fines.

At the same time, the EU announced it was launching another investigation into Google’s Android system.   Google disputes both cases.

Summary of Statement of Objections

The EU summarized the “objections” to Google’s conduct as follows:

  • Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.

  • Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.

  • Froogle, Google’s first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.

  • As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.

  • Google’s conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google’s product.

As to a remedy, Commissioner Vestager explained

The Statement of Objections takes the preliminary view that in order to remedy the conduct, Google should treat its own comparison shopping service and those of rivals in the same way. This would not interfere with either the algorithms Google applies or how it designs its search results pages. It would, however, mean that when Google shows comparison shopping services in response to a user’s query, the most relevant service or services would be selected to appear in Google’s search results pages.

The EU also opened investigation into mobile operating system.

  1. whether Google has illegally hindered the development and market access of rival mobile applications or services by requiring or incentivising smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services;
  2. whether Google has prevented smartphone and tablet manufacturers who wish to install Google’s applications and services on some of their Android devices from developing and marketing modified and potentially competing versions of Android (so-called “Android forks”) on other devices, thereby illegally hindering the development and market access of rival mobile operating systems and mobile applications or services;
  3. whether Google has illegally hindered the development and market access of rival applications and services by tying or bundling certain Google applications and services distributed on Android devices with other Google applications, services and/or application programming interfaces of Google.

Commissioner Vestager discuss the Google objections on the PBS News Hour.

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