EU: Google hurts consumers, competition
European antitrust regulators are ramping up their pressure on Google (GOOG), saying the Internet giant has "abused" its dominance in search to unfairly favor its comparison-shopping product in search results. According to he European Commission, that "stifles competition and harms consumers."
The Commission, which oversees regulatory matters for the European Union, also has opened a new antitrust inquiry into Google focused on how the company markets and uses its Android mobile software platform. Android is the world's most popular mobile platform in terms of the number of devices that use it.
At issue is whether Google has inked "anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices," the EC said in a statement of objections.
The Commission alleges that Google is violating antitrust law in Europe in a number of ways, including:
- Google positions its comparative shopping service above those of competitors, "irrespective of its merit."
- The company exempts its own comparative shopping service from a "system of penalties" that it enforces against competitors and that can result in a lowering of search rank.
- Favorable treatment ensured rapid growth of Google's services.
- Because they experience a disadvantage, other comparative shopping services have less incentive to innovate, ultimately hurting the market and consumers.
Google has yet to formally respond to the charges. The Commission could ask Google to pay a fine, alter its business practices or both. At that point, Google could negotiate a settlement or appeal any decision in a European court.
The Commission began its investigation into Google's comparison-shopping practices five years ago after receiving complaints from competing services, including one owned by Microsoft (MSFT), that Google had unfairly favored its own services. At the time, the search titan sought to deflect the concerns by arguing that Microsoft was trying to hamper the growth of Google's search engine, which is far more popular than Microsoft's Bing.
But there has been a growing European backlash against U.S. technology companies and their market dominance. Some of the targets, whether of investigations or labor protests, include Amazon (AMZN), Apple (AAPL) and ride-sharing company Uber.
According to a Google internal memo obtained by Re/Code, the EC's statement of objections is "very disappointing news," but the company says it has a "very strong case, with especially good arguments when it comes to better services for users and increased competition."