The European Commission has charged Google with abusing its dominant position in internet search services in Europe by systematically favoring its own comparison shopping product, Google Shopping. It also opened an antitrust investigation into Google's Android mobile operating system.
Such conduct infringes EU antitrust rules because it stifles competition and harms consumers, the Commission said this morning, adding that it has formally notified Google of the charges in a so-called Statement of Objections. Google now gets a chance to defend itself before the Commission makes a final decision, which could include a fine of up to 10% of the company's annual turnover.
The Commission also opened a separate antitrust investigation into the Android mobile OS, centred on concerns about whether Google is compelling licensees to exclusively pre-install its own applications or services, whether its stopping device makers from developing competing versiosn of the OS, and whether its tying or bundling Google applications and services for Android with other Google apps and services.
Competition Commissioner Margrethe Vestager, who initiated both actions, said it is the Commission's objective to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not stifle innovation or artificially deny European consumers as wide a choice as possible. In the case of Google she said she has concerns that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules.
The decision to send Google a Statement of Objections is the next step in an antitrust investigation that has been dragging on since November 2010, when the Commission decided to open an inquiry.
The first complaint against Google's alleged abuse of market dominance was filed in November 2009 by Foundem, which offers a vertical search engine for market categories including flights, computers, appliances and hotels. The complaint claimed that Google exploits its overwhelmingly dominant search engine to systematically promote its own specialized services while demoting or excluding those of its competitors. Foundem was later joined by a broad range of other complainants, including Microsoft, Expedia, TripAdvisor and the German Publishers Association.
Google has tried to settle the case several times. In February last year, it proposed to give equal prominence to rivals' services. The Commission seemed willing to take the deal but was slammed by Foundem and other companies, which accused the regulatory body of adopting Google's proposal wholesale without giving complainants an opportunity to express their views on the settlement.
In the following months, the negative reaction from Google's competitors grew and forced the Commission to revise its plans. In September last year, the Commission said it wanted more concessions from Google. This was shortly before Vestager took over from Joaquín Almunia as Competition Commissioner. Since then, Vestager has been talking to all parties again to get an overview of the case.