Monday 20 February 2017

EU throws the book at Google, accusing it of rigging online searches and smartphones

Published 16/04/2015 | 02:30

European Competition Commissioner Margrethe Vestager addresses a news conference at the EU Commission headquarters in Brussels. Photo: Reuters
European Competition Commissioner Margrethe Vestager addresses a news conference at the EU Commission headquarters in Brussels. Photo: Reuters

The EU has thrown the legal book at Google, with competition commissioner Margrethe Vestager formally accusing the search giant of rigging its search engine and its Android smartphone system to disadvantage rival firms.

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"In the case of Google 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.

"I have also launched a formal antitrust investigation of Google's conduct concerning mobile operating systems, apps and services," she said.

"Smartphones, tablets and similar devices play an increasing role in many people's daily lives," the Commissioner added.

"I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company."

The investigation could result in multi-billion euro fines and new limitations on Google's business activities in the lucrative EU market that makes up an estimated one-third of the company's revenue.

"Google now has the opportunity to convince the Commission to the contrary," said Ms Vestager.

"However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe."

Fining Google 10pc of its annual sales would cost the company $6.6bn, based on last year's revenue.

The EU can also demand that the company change how search results are generated or displayed. That would not only impinge on Google's autonomy in how it runs its core business but could also slash revenue.

Google, which employs almost 5,000 people in Dublin, had sought to avoid fines and sidestep any finding that it violated antitrust laws by trying for two years to reach a settlement with the EU.

But competitors objected to Google's proposal that they pay for their services to be displayed next to Google's above search results.

With Google commanding almost all of the search market in some European countries, critics including Microsoft and Expedia are fed up with the company, which they say highlights its own web services in query results at the expense of rivals.

For Google, the European market contributes about 35pc of its revenue. Its market share in search exceeds 90pc in most European markets, compared with about 65pc in the US.

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