On Wednesday 15 April 2015, the European Commission sent Google a statement of objections formally charging the US search engine provider with abusing its market power by systematically favouring its own comparison-shopping product in its general search results pages. Google is alleged to be dominant in the EEA market for general internet search services. The formal charge is the latest development in the five year EU probe into Google’s market power, now spearheaded by EU Competition Commissioner Margrethe Vestager (having taken over the case from Joaquín Almunia in November last year).
Google’s comparison-shopping product is known as ‘Google Shopping’. The EU contends that Google Shopping appears more prominently on the screen in response to queries irrespective of its merits, which could be artificially diverting traffic away from rival comparison shopping services. This in turn, the Commission believes, hinders competition and harms consumers in breach of Article 102 TFEU. Commissioner Vestager stated that the EC does not want to interfere with the search engine's algorithm or screen design as such, but wants Google to treat its own comparison-shopping services in the same way as competitors in its general search.
Prior to the statement, Google had been in negotiations with the Commission to resolve the case by way of commitments (a resolution that involves no finding of infringement and no fine) and had submitted a third set of commitments in January 2014. The Commission declared these insufficient in September 2014 and Google now faces fines of up to 10% of global turnover if the Commission ultimately finds against it. Vestager has however indicated that her door remains open for a settlement.
Google now has ten weeks to reply to the specific charges and immediately responded by strongly contesting the allegations.
The Commission’s actions could establish a broader precedent and Vestager has stated that she may also look at the way Google allegedly favours certain of its other specialised search services, such as Google maps. In addition, the Commission is continuing to investigate its three other previously expressed concerns regarding Google’s conduct (namely the copying of rivals’ web content (known as ‘scraping’), exclusivity in Google’s agreements with advertising partners and undue restrictions of advertisers’ ability to use competing advertising platforms).
Further, this week the Commission launched a formal in-depth antitrust investigation into Google's conduct regarding its mobile operating system Android. The investigation will focus on whether Google has breached EU antitrust rules by hindering access to or the development of rival mobile operating systems or smart phone applications. Owing to the growing importance of smartphones, tablets and similar devices in people’s lives, the Commission is determined to ensure consumers are benefiting from a competitive market.
The issuing of a formal charge sheet chimes with Vestager’s approach of contesting cases openly in order to set out the law, particularly in technology markets. It also aligns with a recent speech by Vestager, where she stated that the “same rules apply to all" and that the Commission is “indifferent” to a company’s location when it comes to enforcing antitrust rules.