More trouble for Google in Europe

• Google accused of more market abuse
• An addition to original 2010 complaint

 

THERE is more trouble for the search and ad giant Google in the European Union. The EU's competition chief, Margrethe Vestager, confirmed that her office would "reinforce the first Google case on search" relating to price comparison, by issuing a supplementary statement of objections against the company.
 
The company also faces a fresh round of charges against its business practices in Europe relating to its ad placements on its own sites and that of third party websites. The commission said that Google's AdSense had breached EU antitrust rules with relation to its exclusivity contract with a number of the largest third party websites otherwise called direct partners.
 
"Dominance is not a problem under EU law, you can be big. However it is illegal to abuse a powerful market position," Vestager said. Google has 10 weeks to respond to the latest statement of objections.
 
Vestager said that her team had carried out a fresh investigation into Google's business tactics on price comparison and found that its preliminary conclusion in that case had been reinforced.
 
The European Commission also dismissed Google's claim that comparison shopping services should be considered alongside the likes of Amazon and eBay.
 
Commissioner Margrethe Vestager, in charge of competition policy, said: "Google has come up with many innovative products that have made a difference to our lives. But that doesn't give Google the right to deny other companies the chance to compete and innovate. Today, we have further strengthened our case that Google has unduly favoured its own comparison shopping service in its general search result pages. It means consumers may not see the most relevant results to their search queries. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation."
 
However, UK vertical search price comparison site Foundem, the original complainant in the case, warned that any further delay in issuing a prohibition decision against Google could crush competition in that market. "While we understand and respect the commission’s thorough, step-by-step approach, Google’s unprecedented power and proven track record of exploiting every delay to further extend and entrench its immensely harmful anti-competitive practices creates a particularly strong imperative to act swiftly in this case, said Foundem co-founder Shivaun Raff.
 
Google said, “We believe that our innovations and product improvements have increased choice for European consumers and promote competition. We’ll examine the commission’s renewed cases and provide a detailed response in the coming weeks.”
 
Google places search ads directly on the Google search website and also as an intermediary on third party websites through its "AdSense for Search" platform ("search advertising intermediation"). These include websites of online retailers, telecoms operators and newspapers. The websites offer a search box that allows users to search for information. Whenever a user enters a search query, in addition to the search results, also search ads are displayed. If the user clicks on the search ad, both Google and the third party receive a commission.
 
The Commission considers at this stage that Google is dominant in the market for search advertising intermediation in the European Economic Area (EEA), with market shares of around 80% in the last ten years. A large proportion of Google's revenues from search advertising intermediation stems from its agreements with a limited number of large third parties, so-called "Direct Partners".
 
Search is not the only area of Google's business that is being investigated by the European Commission. The Android operating system is also under scrutiny.
 
Watch the video below to see the European Commision make its case against Google.
 

 
A statement of objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the company concerned in writing of the objections raised against them. The company can then examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.
 
There is no deadline for the Commission to complete antitrust inquiries into anticompetitive practices. The duration of an antitrust investigation depends on the complexity of the case, the extent to which the accused company concerned cooperates with the Commission and the exercise of the rights of defence.
 
In other words, this case against Google is likely to run and run.
 
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