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Google Says EU Allegations Off the Mark

A Google Search executive says the company has not abused its online search dominance, as the European Commission charges.
Katie Kuehner-HebertApril 15, 2015
Google Says EU Allegations Off the Mark

The European Commission on Wednesday accused Google of abusing its online search dominance by favoring its own comparison shopping product over others in search results. The Mountain View, Calif., company has 10 days to respond to the commission’s so-called “statement of objections.”

“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 [European Union] antitrust rules,” EU Commissioner in charge of competition policy Margrethe Vestager said in a statement.

“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.”

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Google Search senior vice president Amit Singhal Wednesday disputed the EU’s claims on a Google blog.

“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,” Singhal wrote.

He said that after Google in 2010 bought flight search provider ITA Software, Expedia, Kayak, and Travelocity unsuccessfully lobbied U.S. and EU regulators to block the deal, claiming it would “siphon off their traffic and harm competition online.”

“Four years later it’s clear their allegations of harm turned out to be untrue,” Singhal wrote. “As the Washington Post recently pointed out (in a story “Google flight search, four years in: not the competition-killer critics feared”), Expedia, Orbitz, Priceline and Travelocity account for 95% of the U.S. online travel market today. It’s a similar situation in Europe.”

The European Commission has also formally opened a separate antitrust investigation into Google’s conduct as regards the mobile operating system Android. The investigation will focus on whether Google has entered into anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications, and services for smart mobile devices.

A Reuters story said that if the commission finds that Google violated EU antitrust laws and the company does not settle by changing its search algorithms, it could take many months and “probably years” for the case to play out in court.

“Google’s critics welcomed the decision to pursue the U.S. giant, though many industry experts believe the action is unlikely to markedly shift existing business their way,” Reuters wrote.

“Rather, by firing a shot across Google’s bows, it may favor competitors in new areas as technology develops, a priority for the new European Commission led by Jean-Claude Juncker, which wants to foster home-grown enterprise.”

In an email, Paul Lugard, anti-trust partner in the Brussels office of Baker Botts, said: “The European Commission is paving the way for a prohibition preventing Google from systematically favoring its own services and products in its search results pages.  But without any positive description of how these should be displayed going forward.”

“This is unlikely to satisfy Google’s competitors who would no doubt have preferred the Commission to specify what Google should do in order to create a more level playing field,” Lugard continued. “For Google, there is a strong likelihood that it will be forced to dramatically change its business model potentially making it less efficient.”