The European Union's executive branch slapped the Internet tech giant Google with official antitrust charges on Wednesday, alleging that the company abuses its dominance in Internet searches. At the same time, the EU also opened a new probe into its Android mobile operating system.
This move greatly increases the stakes in the highest profile antitrust case in Europe and could lead to billions in fines for Google, if the case successfully demonstrates that they way it operates its business is, in fact, illegal in the 28 countries in question.
In announcing the action, EU Competition Commissioner Margrethe Vestager said that she is "concerned that the company has given an unfair advantage to its own comparison shopping service."
Vestager says that the separate antitrust probe into Android will investigate whether the Internet giant relies on anti-competitive deals and abuses its dominant position in Europe's mobile market.
This move, however, doesn't come as a surprise as the EU has long sought a settlement with Google, but rather says that the company has failed to address its concerns. This new, more confrontational route could mean years of legal wrangling and could cost the company billions in fines. The EU can impose fines of up to 10 percent on annual revenue, or $6 billion US, and force the company to overhaul its system for recommending websites in Europe.
Vestager says that her chief goal was to make sure multinationals "do not artificially deny European consumers as wide a choice as possible or stifle innovation."
Currently, Google has a market share of over 90 percent of Internet searches in Europe, compared with around 70 percent in the United States. Vestager went on to say that one in four companies complaining about Google were U.S. rivals.
"Dominance as such is not a problem," said Vestager. "However dominant companies have a responsibility not to abuse their powerful market position."
When it comes to comparative shopping, the EU said it found that "Google gives systematic favorable treatment" to its Google Shopping at the expense of others in its general search results. "It may therefore artificially divert traffic from rival comparison shopping services and hinder their ability to compete on the market," the EU said in a statement.
Google now has ten weeks to respond to these allegatins.
Senior Vice-President Google Search Amit Singhal said in a reaction that "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."
When it comes to comparative internet shopping, Singhal wrote in a blog that "it's clear that (a) there's a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google's shopping results have not the harmed the competition."
Thomas Vinje, legal counsel for FairSearch Europe, a group that has been urging EU regulators to rein in Google, said that Wednesday's move was "a significant step towards ending Google's anti-competitive practices, which have harmed innovation and consumer choice."
