Google was accused of anti-competitive behavior by the European Union on Wednesday, which also launched an antitrust investigation looking at the web giant’s Android mobile operating system. The EU’s Competition Commissioner Margrethe Vestager accused Google of manipulating its search results in favor of its own shopping services.
“I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” said Vestager. “If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”
The EU has the power to can fine firms up to 10% of their annual sales, in Google’s case more than $6 billion. The body is also entitled to impose reforms on companies found guilty of abusing its market power. Both Microsoft and Intel have been found guilty in the past, with Intel ordered to pay a record fine in excess of $1 billion for its business practices.
Google execs came out with a strong defence against the charges.
“While Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark,” stated Google Search SVP Amit Singhal in a lengthy post on Google Plus. “Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player. Yet that is exactly what’s happening in our world. Zalando, the German shopping site, went public in 2014 in one of Europe’s biggest-ever tech IPOs. Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding. We’re seeing innovation in voice search and the rise of search assistants — with even more to come. It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead. ”
The EU has been working on its case with Google for five years, initially seeking to do a deal with the search engine. Google now has 10 weeks to respond formally to the charges and can demand a hearing, with those proceedings set to take months, if not years.