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.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

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

A staggering one-in-three women, experience physical, sexual abuse

Eurozone retail sales fall shows recession

Member States and Commission to work together to boost artificial intelligence “made in Europe”

The 28 EU leaders don’t touch the thorny issues

Future Forces Forum: Prague will be hosting the most important project in the field of Defence and Security

This start-up has developed a way for businesses to quickly compost food waste

EU seems to fail its moderate migration promises postponing them for end 2015

Globalization is changing. Here’s how your business can adapt

11 innovations protecting life below water – and above it

6 ways to future-proof universities

In 2019, ‘reasons for hope’ in a world still on ‘red alert’: UN chief Guterres

How to make your business thrive by doing good

North Korean families facing deep ‘hunger crisis’ after worst harvest in 10 years, UN food assessment shows

A day in the life of a Rohingya refugee

Human rights ‘core to sustainable development’: deputy UN chief

It will take a lot more than free menstrual pads to end period poverty

Rule of law: MEPs travel to Malta to meet with government, NGOs and journalists

Does research make sense any more? The dire need for new ways to measure success

In Rome you can swap plastic bottles for metro tickets

Latest Coronavirus (Covid-19) briefing from the World Health Organisation – key takeaways

Why good cybersecurity in business is everyone’s responsibility

Google’s hot summer never ends: EC to launch ANOTHER antitrust inquiry against the American giant

Supply chains have been upended. Here’s how to make them more resilient

One Day in Beijing

European Youth Forum celebrates 20 years of fighting for youth rights

Few countries are pricing carbon high enough to meet climate targets

How to save the world’s forests with carbon credits

Why Obama asks approval from Congress to bomb Syria?

A money laundering case on Vatican Bank’s road to renovation

Reject passivity and embrace ‘responsibility for our future,’ Lithuania’s President tells UN Assembly

Rapid growth in China post-COVID makes it ripe for investment

The European Parliament wants to stay in one place

A day in the life of a Venezuelan migrant in Boa Vista, Brazil

EU food watchdog: more transparency, better risk prevention

Destroying nuclear waste to create clean energy? It can be done

The European Union and the United States reach an agreement on imports of hormone-free beef

Preparing for developing countries the ‘Greek cure’

Iran: BBC and other broadcast journalists harassed; families threatened – UN experts

Mountains matter, especially if you’re young, UN declares

Coronavirus: Commission holds first meeting of EU COVID-19 national scientific advice platform

The European Parliament floating over the South China Sea

Turkey presents a new strategy for EU accession but foreign policy could be the lucky card

European Border and Coast Guard: Council adopts revised regulation

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

10 reasons why today’s cyber leaders are tomorrow’s world leaders

For video game addiction, now read official ‘gaming disorder’: World Health Organization

Around 23 million boys have married before reaching 15; ‘we can end this violation’ says UNICEF chief

Humanitarian aid: EU allocates €54.5 million to Africa’s Great Lakes region

Ending use of chemical weapons in Syria: ‘still work to be done’, says UN disarmament chief

Can cybersecurity offer value for money?

These are India’s cleanest cities

COVID-19 vaccine campaigns: how far are the anti-vaccine movements going online? How can pro-vaxxers be part of their change?

EU-US trade agreement talks to be affected by American bugs

Health challenges need predictable healthcare investment policies. Japan’s example shows why

These airports are now opening their doors to non-fliers

3 pressing urban problems Indian cities must solve in the post-COVID recovery

Electronic cigarettes: is it really a safe alternative to smoking?

Cutting money transfer fees could unlock $15bn for developing countries. Here’s how

Cape Town almost ran out of water. Here’s how it averted the crisis

The world’s supercomputers joined forces against COVID-19 – why such collaborations are critical for tackling future emergencies

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