European Union Accuses Google of Violating Antitrust Laws

The European Union has once again thrown the gauntlet down on Google, this time charging the company with violating antitrust laws by using its dominance in search by favoring its own comparison shopping service at the expense of others. The EU is also launching a separate investigation to see if Google has used its clout as the dominant supplier of mobile phone software to hold back providers of competing mobile operating systems, namely Apple and Microsoft. Google denied both allegations.

Regarding the charges that it skews results in its search engine to benefit its own shopping comparison service, the EU charged that "Google gives systematic 'favourable' treatment to its comparison shopping product (currently called 'Google Shopping') in its general search results pages, e.g. by showing Google Shopping more prominently on the screen."

Google diverts traffic from competing comparison shopping services obstructing their ability to compete, said the EU complaint.

"The Commission is concerned that users do not necessarily see the most relevant results in response to queries -- this is to the detriment of consumers, and stifles innovation," it said in a statement. The EU wants Google to operate its own comparison shopping services the same as it treats those of rivals. Google has 10 weeks to respond, at which point the EU will hold a formal hearing.

In response to that allegation, Google said in a blog post it has plenty of competitors and argued its own offerings are often underdogs. "Indeed if you look at shopping -- an area where we have seen a lot of complaints and where the European Commission has focused in its Statement of Objections -- it's clear that (a) there's a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google's shopping results have not harmed the competition," Amit Singhal, senior vice president of Google Search, said in a blog post. "Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding. We're seeing innovation in voice search and the rise of search assistants -- with even more to come."

As for Android, the EU said it's investigating whether or not Google has violated antitrust regulations by thwarting development of mobile applications to other operating system providers by providing incentives to smartphone and tablet suppliers to install Google's apps and services exclusively. "Distribution agreements are not exclusive, and Android manufacturers install their own apps and apps from other companies as well," said Hiroshi Lockheimer, Google's VP of engineering for Android, in a blog post addressing the investigation. "And in comparison to Apple -- the world's most profitable (mobile) phone company -- there are far fewer Google apps preinstalled on Android phones than Apple apps on iOS devices."

Do you feel the EU has a case or are the latest charges just a witch hunt?

Posted by Jeffrey Schwartz on 04/15/2015 at 11:30 AM