The European Union fires Google over using its internet dominance for profit, to probe Android for manipulation
The European Union (EU) Competition Commissioner, Margrethe Vestager on Wednesday blamed Google Inc. of misusing its dominance of the Internet search market in Europe by misinterpreting the search results and by favoring its own comparison-shopping product when consumers shop online. She has also launched an antitrust probe into its Android mobile operating system.
In a statement, Competition Commissioner, Margrethe Vestager said that “I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” she said. “If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe”. Google Inc. has been sent a chargesheet by the EU to which it can respond. Google now has the opportunity to convince the commission to the contrary.
There was no immediate public response from Google, but an internal memo published to the staff by the blog re/code described the moves as “very disappointing news” and said: “We have a very strong case, with especially good arguments when it comes to better services for users and increased competition.” The memo partly defended stating that Google offers consumers a quicker, more direct service.
The Commission, which controls antitrust matters of wealthy 28-nation bloc across the globe gives it a upper hand to decide the fate of global corporations. That means they can fine firms up to 10 percent of their annual sales or a penalty of over $6 billion for Google.
If EU finds that companies are misusing their supreme market position, in that case, the regulator can demand major changes to their business practices, the same way they did with U.S. software giant Microsoft in 2004 and chip-maker Intel in 2009. Further, Microsoft were made to pay over $2 billion in penalty to the EU’s competition commission for the decade-long antitrust case fight with the EU that ended in 2009.
Vestager, when questioned on the formal investigation into Android, used in smart phones and tablets, said: “I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.”
She made the announcement on the eve of a high-profile visit to the United States, following five years of investigation and failed efforts to close a deal with Google by her Spanish predecessor, Joaquin Almunia, who handed over the politically charged file to the Danish liberal in November.
90% of all the Internet searches in Europe is accounted by Google. The commission claims that the Internet giant has breached antitrust regulations by channelling traffic from its competitors to its own services. The commission said Google “may be artificially divert(ing) traffic from rival comparison shopping services (to its Google Shopping) and hinder their ability to compete.”
Then-EU Competition Commissioner Neelie Kroes argued that consumers in Europe would benefit from having a choice of Internet browsers bundled with the firm’s Windows software. Microsoft was charged with penalty as late as 2013 after it failed to adhere with a settlement that mandated it offers easier access to the products of its competitors.
Vestager did not mention how much more time the commission plans to spend to conduct its investigations or the timeframe that Google has been given to reply to the accusations.