EU preparing to bring antitrust case against Google

Google logoThe member of the European Commission in charge of competition, Margrethe Vestager, is preparing to file a formal antitrust action against Google in the next few weeks accusing it of abusing a dominant market position, according to the Wall Street Journal. Sources said that the European Commission has been contacting companies that had filed complaints against Google, asking them for permission to publish information submitted confidentially, which is seen as a preliminary move before announcing the antitrust action. A spokesperson for Commissioner Vestager told Ars, "The Google investigation is ongoing. We have no further comments and we do not comment on speculations." Google had not responded to a request for comment at press time.

The European Union's four areas of concern are that Google may be showing biased search results that favor its other services, it may be scraping original material from competitors' websites, agreements with advertisers may shut out competing services, and that Google imposes contractual obligations on software developers that make it harder to transfer advertising campaigns to other platforms. The Wall Street Journal believes that the EU action might include charges that Google's tight control of the Android apps marketplace is also an abuse of its dominant position.

If confirmed, the antitrust action would mark the culmination of a long and tortuous investigation by the EU that began back in November 2010 as the result of three companies complaining about Google's business practices in Europe. In May 2012 Joaquín Almunia, the Vice President of the European Commission responsible for Competition Policy at the time, said that he was offering Google "the possibility to come up in a matter of weeks with first proposals of remedies to address each of these [four] points," and thus to avoid a formal antitrust complaint.

Despite that offer, no agreement has been reached since then. Meanwhile, European concerns about Google's power in the key digital market of search have not diminished; in November last year, the European Parliament passed a non-binding resolution calling for Google to be broken up, with its search engine unbundled from other services. That in turn prompted a letter from US lawmakers, who expressed alarm at what they called a "politicization" of the antitrust investigation.

According to the Wall Street Journal, Google and the EU have not had settlement negotiations recently, which suggests that the new competition commissioner has decided to move straight on to a formal antitrust complaint rather than pursuing further talks. Google will still have the option to settle, and the financial consequences of failing to do so are serious. Under Article 7 of the EU's Antitrust Regulation, the European Commission has the power to impose a fine up to 10 percent of the offending company's total turnover in the preceding business year—$66 billion in the case of Google. Nor is the European Commission shy about using this option. In 2009, it fined Intel $1.44 billion for antitrust violations, while Microsoft was fined $732 million in 2013 for failing to respect an earlier antitrust agreement.

Source: Ars Technica

Tags: Google, legal action

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