EU opens a third antitrust file against Google

Google Logo 2016The European Commission announced last Thursday that is taking “further steps” in investigation against Google, officially accusing the company of having restricted consumer choice by blocking rivals in online search advertising. Although it sounds like there’s absolutely nothing new about this new complaint against Google, the latest antitrust charge filed by the Commission, which is the third since early 2015, it may surely open a new chapter in the long standing “EU vs. Google” story.

Two charges

With an official statement, the European Commission has announced no less than two charge sheets, known as “statements of objections”, and has sent it to Google. Formally, with the first Statement of Objections, the Commission has reinforced its preliminary conclusion that Google has abused its dominant position by “systematically favouring its comparison shopping service in its search result pages”. The move is explained in detail in the official EC statement published on that same day.

Comparison shopping

The European Commission issued its first Statement of Objections against Google on the subject of comparison shopping in April 2015, and now confirms it also carried out further investigations since then. Last Thursday’s Statement of Objections indeed represents a reinforcement of the Commission’s preliminary conclusions and outlines “a broad range of additional evidence and data”, as declared by the Commission. “Google has come up with many innovative products that have made a difference to our lives”, Commissioner Margrethe Vestager, in charge of competition policy, said. “But that doesn’t give Google the right to deny other companies the chance to compete and innovate”, she added.

According to the Commission, the additional evidence relates to the way Google “favours its own comparison shopping service over those of competitors, the impact of a website’s prominence of display in Google’s search results on its traffic, and the evolution of traffic to Google’s comparison shopping service compared to its competitors”, to use the exact words of the Commission’s spokesperson. “The Commission is concerned that users do not necessarily see the most relevant results in response to queries”, the statement says. “Today, we have further strengthened our case that Google has unduly favoured its own comparison shopping service in its general search result pages. It means consumers may not see the most relevant results to their search queries”, Commissioner Vestager also stressed.

The AdSense problem

The second accusation is about Google’s “AdSense for Search” platform, through which Google acts as an intermediary for websites such as retailers, telecom operators and newspapers. The Commission officially raises concerns that the Mountain View, California-based firm has breached the EU antitrust rules by putting restrictions on the ability of certain third party websites to display search advertisements from its competitors. According to the European Commission Google has “prevented existing and potential competitors, including other search providers and online advertising platforms, from entering and growing in this commercially important area”.

This latest accusation refers to what the Commission sees as Google’s “original sin” of having abused its 80 % market share “dominant position” in the European Economic Area (EEA), specifically in the placement of search advertising on third party websites. A large proportion of Google’s revenues from search advertising intermediation indeed stems from its agreements with a limited number of large third parties, and the Commission has concerns that in those agreements Google might have breached the bloc’s antitrust laws by requesting conditions of exclusivity and the right to authorise competing ads.

A reply to Google

This new round of antitrust charges represents a massive reply to all the proofs of innocence that Google has showcased through the year, a big. An example of that lies on its its first accusation, the one regarding comparison shopping, where the Commission has completely rejected Google’s claim that the EU watchdog had failed to take into account competition from online retailers Amazon and eBay. Google’s argument indeed was that comparison shopping services should not be considered in isolation, but together with the services provided by merchant platforms. Last week, the Commission openly said it will continue to consider that comparison shopping services and merchant platforms belong to separate markets.

“The latest round of charges underscores the European Commission’s commitment to the case and signals that serious penalties against Google are likely”, Mr. Albert Foer, a senior fellow at the American Antitrust Institute, told Reuters last week. “My sense is that we are talking about something more substantial than a slap on the wrist, and also that’s why this has been going on for so long”, he said.

Alphabet under the lens

Moreover, this new round of charges carries a big element of novelty: the Commission decided to initiate proceedings also against Alphabet, Google’s parent company, which “was created after the Commission had initiated proceedings against Google”, as said in the statement by the Commission. “Both Statements of Objections summarised above are addressed to Google and Alphabet”, the statement also said, adding that also the April 2015 Statement of Objections has been notified to Alphabet.

This is the first time Alphabet itself gets dragged onto the field, which is another proof of how the EU-Google question is definitely far from a conclusion. Google’s AdWords and AdSense programmes have been on the Commission’s radar since 2010, under Vestager’s predecessor, Mr. Joaquin Almunia. Google for more than two years tried to negotiate a settlement with the EU, and almost got it, before Mr. Almunia left his cabinet. Ms. Vestager recently said that bringing the thorny matter to a final stage is her top priority, although there’s still no visible resolution ahead.

Growing concerns

Google now could face fines up to 10 % of its global turnover for each case, if found guilty of breaking the region’s antitrust rules. Still such threat doesn’t seem too much of a risk to Google’s business, which was flying around $75 billion in revenue in 2015. However, many sources close to the company are reportedly saying that the concern around the matter is rapidly growing inside the US tech giant’s offices.

“We believe our innovations and product improvements have increased choice for E.U. consumers and promote competition”, a Google’s spokesperson commented on Twitter last week, which is the company’s only reply to date. Google also said that it would provide a “detailed” response to Europe’s latest charges in due course.

Google and Alphabet have 8 weeks to respond to the first Statement of Objections and 10 weeks to provide a response to the second.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN chief condemns explosion at election rally in Zimbabwe that injured dozens, including senior politicians

Drawing scenarios for drifting Britain; elections or May’s deadlock?

Africa is helping the drone industry get off the ground. Here’s how

Crimea, a wicked game of political chess and a ‘big’ coincidence

We dream of being a part of the European family, says FYROM PM

The global appetite for meat is growing, and it’s harming the planet

Innovation for a smarter world: ITU Telecom World 2018

UN relief chief urges Security Council to back aid delivery, more funding for millions of Syrians hit by harsh weather

UN experts urge India to align new anti-trafficking bill with human rights law

This is how people in Europe are helping lead the energy charge

A refugee from Syria cries out: “I’m not just a number!”

South Sudan: ‘Horrific acts’ by government may constitute ‘war crimes’ says UN, demanding justice

No improvement in respect for EU values: MEPs cut support for Turkey by €70m

How trade wars pose a threat to the global economy

Primary Healthcare vs Specialization Careers, how to promote PHC to the Young Health Workforce?

Scores of Rohingya refugee shelters in Bangladesh destroyed by flooding

Traditional knowledge at ‘core’ of indigenous heritage, and ‘must be protected’, says UN Forum

Political power of women suffering ‘serious regression’, General Assembly President warns

Seaweed, enzymes and compostable cups: Can ‘Big Food’ take on plastic and win?

Chile ups foreign bribery enforcement but flawed case resolutions are insufficient to ensure transparency and accountability

Migrant children at US border have right to protection and ‘be with their families’: UNICEF chief

Afghanistan: UN mission welcomes new polling dates following election delays

Conflict prevention, mediation: among ‘most important tools’ to reduce human suffering, Guterres tells Security Council

Cryptocurrency mining could become the new face of energy storage. Here’s how

Five-year low inflation for Eurozone and now Mario has to finally wake up the Germans

Africa Forum aims to boost business, reduce costs, help countries trade out of poverty

Draghi cuts the Gordian knot of the Banking Union

Drinking coffee could help you live longer, research finds

Draghi to hold on zero interest rates until he leaves ECB

How tech companies compare at protecting your digital rights

Access to health in the developping world

MWC 2016 LIVE: Mobile World Congress shows off planes, trams and automobiles

Can the EU afford a trade war with China?

Youth for Climate Change

EU gas market: new rules agreed will also cover gas pipelines entering the EU

Gaza probe finds ‘reasonable grounds’ Israeli forces committed international human rights violations

Trump and Brexit: After the social whys the political whereto

As human caravan moves through Mexico, ‘full respect’ needed for national control of borders: UN chief

DR Congo elections: ‘historic opportunity’ for ‘peaceful transfer of power’ says Security Council

5 ways Denmark is preparing for the future of work

How will the NATO-EU competition evolve in the post Brexit era?

Population in crisis hit EU countries will suffer for decades

EUREKA @ European Business Summit 2014: A European patent system can help European businesses lead industrial research and innovation on a global scale

UN rights office calls for action to end ‘repression and retaliation’ in crisis-torn Nicaragua

New rules for temporary border controls within the Schengen area

UN experts report: Business ‘dragging its feet’ on human rights worldwide

Heat-resistant crops, ‘green’ infrastructure, can prepare Near East and North Africa to better tackle droughts – UN agency

The big five EU telecom operators in dire straights

Batteries included: how better storage can transform renewable energy

LIFE Programme: Member States to benefit from quarter of a billion euros of investments in environment, nature and climate action

‘Informing is not a crime’ UN chief calls for better protection of journalists, press freedom

Alexis Tsipras against internal and external “enemies” in pursue of a two-phase deal now

EU and China resolve amicably solar panel trade dispute

Why rich countries are seeing more poverty

Europe enters uncharted waters with Kiev-Moscow standoff

More state aid to big firms, no special provisions for the SMEs

Angola’s President João Lourenço calls for stronger EU-Africa cooperation

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

UN urges ‘restraint’ in Bangladesh’s post-presidential election violence

Algorithms are being used to convict criminals and decide jail time. We need to make sure they are fair

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s