Apr 15

Google’s Antitrust Charges – Accused by EU of "Search Abuse"

Google have spent many years attempting to settle or potentially dodge antitrust charges in Europe but it seems that their attempts have come up short. News outlets have widely reported a filed complaint from the European Union against Google this morning over alleged “anti-competitive behaviour”.

The competition commissioner, Margrethe Vestager, stated that Google’s promotion of associated shopping links accumulated to an abuse of its dominance within search and subsequently issued a “statement of objections”. Google now have 10 weeks to respond to the complaint.

Billions in Potential Fines

What we know from recent news and leaks is that Google was anticipating antitrust charges. The decision by Europe to press on rather than settle is similar to their efforts against Microsoft over a decade ago.

If we consider what’s at stake here, Google could be hit with billions in potential fines and will also see their reputation and market cap damaged depending on the charges and proceedings.

It’s clear that Ms Vestager has determined that Google violated antitrust laws in Europe and has now come to a legal conclusion. The formal charges do not necessarily rule out a settlement, although Google’s history of reaching a settlement isn’t all that positive.

Vesteger’s predecessor, Joaquin Almunia, came close to reaching a settlement with Google in the past but failed to advertise his “rival links” plan to Google’s critics and opponents.

The Future of EU-based Search

Settlement proposals could have a considerable effect on the future of search. For instance, it has been suggested that a new proposal could lead to the end of universal search in Europe.

The tens of billions in fines that Google faces as a result of these antitrust charges will come about as a result of not satisfying the Commission with new proposals. If you consider that Google accounts for more than 90% of EU-based web searches, there’s a chance we could see a rather significant conclusion to proceedings.

However, an internal Google memo was obtained prior to the formal EU announcement by re/code which reacts to the antitrust charges. The memo suggests Google will look to present themselves as underdogs in certain categories including shopping, citing third party data and traffic.

The memo also expresses confidence with regards to Google’s prospects as far as search goes and concludes with a reference to the now confirmed Android OS investigation as part of the inquiry.

Shopping Market Claims “Wide Of The Mark”

What’s more, Ms Vestager said that she was not asking for a complete redesign of Google’s algorithms or search results. Ms Vestager also said that she was “open” to any response from Google, which suggests that the matter could take a long time to resolve.

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Google’s search chief Amit Singhal responded to the claims that their Shopping service “distorts” the market on the firm’s 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” wrote Mr Singhal.

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