[A2k] New York Times: Europe Challenges Google, Seeing Violations of Its Antitrust Law

Thiru Balasubramaniam thiru at keionline.org
Thu Apr 16 06:00:41 PDT 2015


BUSINESS DAY <http://www.nytimes.com/pages/business/index.html>Europe
Challenges Google, Seeing Violations of Its Antitrust Law

and MARK SCOTTAPRIL 15, 2015

BRUSSELS — The European Union’s antitrust chief on Wednesday formally
accused Google
of abusing its dominance in web searches, bringing charges that could limit
the giant American tech company’s moneymaking prowess.

The case is the first time that antitrust charges have been brought against
despite a yearslong face-off between the company and regulators here. It
will almost certainly increase pressure on Google to address complaints
that the company favors its own products in search results over its rivals’

And in a sign that the pressure in Europe would probably expand to other
areas of Google’s business, the antitrust regulator, Margrethe Vestager,
also said she had opened a formal antitrust investigation into the
company’s Android smartphone software.

“If the investigation confirmed our concerns, Google would have to face the
legal consequences and change the way it does business in Europe,” said Ms.
Vestager, the European Union’s competition commissioner, referring to
Google’s search practices.

The regulators have focused on accusations that Google diverts traffic from
competitors rivals to favor its own comparison shopping site. That led the
European Commission to issue a set of formal charges, known as a statement
of objections.

How Google responds in the case — the biggest since the case against
Microsoft in the 2000s — and to what degree the accusations hamper its own
business or aid its rivals remain to be seen. Google holds a roughly 90
percent share in the region’s search market, and the company contends that
in both web searches and Android software it plays fair.

The company could still settle the matter. But whatever Google might
negotiate with the commission, analysts say, the deal will have a greater
impact on its business than three previous attempts to settle with Ms.
Vestager’s predecessor, Joaquín Almunia. The inquiry could also expand
beyond shopping sites, to areas like online searches for restaurants and

If Google fails to rebut the formal charges, Ms. Vestager could levy a fine
that could exceed €6 billion — about 10 percent of Google’s most recent
annual revenue. But the largest single fine yet levied in such a case falls
well short of that mark: The record is €1.1 billion in 2009 against Intel
for abusing its dominance of the computer chip market.

On Wednesday, Google defended its business practices.

“While Google may be the most-used search engine, people can now find and
access information in numerous different ways — and allegations of harm,
for consumers and competitors, have proved to be wide of the mark,” the
company said in a blog post

Ms. Vestager insisted on Wednesday that she was on the side of “consumer
choice and innovation” on the Internet. “We are not here to take the side
of rivals — we are here to take the side of competition,” she said.

The action by Ms. Vestager highlighted once again how European regulators
have taken a more aggressive regulatory stance against American tech
companies than their counterparts in the United States.

Europe’s antitrust officials are reviewing low-tax arrangements granted to
Apple in Ireland and Amazon in Luxembourg, and privacy watchdogs are
looking into how securely companies like Facebook are protecting people’s
online data.

Policy makers are investigating whether American Internet platforms like
Amazon have too much control over how Europeans gain access to online
services. And in response to a court order, Google in the European Union is
having to remove some links in online searches in response to people’s
declared “right to be forgotten.”

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