European Union Charges Google for Violating Antitrust Laws
Google has 10 weeks to respond to the finding of the European Commission that it gives an unfair advantage to its own comparison shopping service when users look for product information online. On Wednesday, the commission, which is the executive body of the European Union, also launched a separate antitrust investigation into Google's practices regarding its Android mobile operating system.
The commission's moves had been anticipated by Google, which yesterday issued an internal memo to employees calling the actions "disappointing news." The memo, obtained and published by Re/code, added that the European Commission's actions are far from final and provide "an opportunity for Google to tell our side of the story."
In its formal Statement of Objections to Google, the European governing body listed a number of conclusions it has reached since launching an investigation into the company's search practices in 2010. A Statement of Objections gives an organization under investigation the right to respond to detailed and specific findings that could negatively affect that organization's rights.
'Abused Its Dominant Position'
The European Commission's four-and-a-half-year-long investigation into Google concluded that the company has "abused its dominant position in the markets for general Internet search services in the European Economic Area by systematically favoring its own comparison shopping product in its general search results pages." Consequently, the commission believes, Google is violating the European Union's antitrust laws because it stifles competition and harms consumers.
"In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules," said Margrethe Vestager, the EU Commissioner in charge of competition policy. "Google now has the opportunity to convince the commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe."
Google has "a very strong case, with especially good arguments when it comes to better services for users and increased competition," Google's General Counsel, Kent Walker, wrote in the internal memo published by Re/code. Since "the days of ten blue links," Google has improved its search services to now enable direct responses to many queries, which saves users huge amounts of time and effort, he wrote. Walker added that Google's search results also provide users one-click access to a wide range of competing sites, including Bing, Yahoo, Quora and DuckDuckGo.
Launch of Android Investigation
When it announced that it was opening a formal antitrust investigation against Google regarding its Android operating system, the European Commission said it aims to focus on how the company might be affecting market competition by requiring manufacturers to exclusively install its own applications on their mobile devices.
It will also look at whether Google has discouraged those manufacturers from developing and modifying competing versions of Android or "illegally hindered the development and market access of rival applications and services" through its own service and application bundles. Android is an open-source operating system for mobile devices that now dominates the global smartphone ecosystem. Google launched its Android Open Source Project in November 2007.
Google also dominates the online search environment in Europe, with market shares exceeding 90 percent in most countries across the European Economic Area. The company has made previous attempts to settle the complaints over its shopping search, but competitors including Microsoft and Yelp raised objections to those efforts.
Image credit: European Commission.