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

Advertising

Featured Stings

On International Youth Day the European Youth Forum calls for true youth participation

How bad could British healthcare get for its citizens abroad post-Brexit?

A Sting Exclusive: “Delivering on the Environmental Dimension of the new Sustainable Development Agenda”, Ulf Björnholm underscores from UNEP Brussels

Migration crisis update: The “Habsburg Empire” comes back to life while EU loses control

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

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

G20 World Exclusive Interview: “The world, especially emerging economies and developing countries, require a more sustainable and quality development”, the Spokesperson of Japan underscores live from Antalya Turkey

The EU Parliament sidesteps the real issues about banks, while the US target the Eurozone lenders

It’s Trump’s anti-globalization and inward-looking rhetoric that perturbs GOP and US

An FTA between EU-US to hurt South Korea

EU prepares for the worst case scenario as Turkey seems to be withdrawing from the migration deal

A neo-liberal toll free Paradise for the super rich and tax hell for wage earners

New VAT rules in the EU: how a digital sea could have become an ocean

Bank resolutions and recapitalisations by the ESM may end up politically swayed

Can the national and age groups pockets of unemployment cause irreparable damages to Eurozone?

Eurostat: Real unemployment double than the official rate

MWC 2016 LIVE: GTI shifts to phase two – 5G – after hitting milestones

Recession: the best argument for growth

The Eurogroup has set Cyprus on fire

EU, Brazil to hold high level Summit in Brasilia

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

The four top Americans who flew to Europe perplexed things about Trump’s intentions

A Sting Exclusive: “Our ambition is by 2020 Indonesia to become an emerging power of World’s Maritime Access”, reveals the Chargé d’Affaires at the Embassy of Indonesia in Brussels, treating WEF, ASEAN and EU-Indonesia relations on the eve of the World Economic Forum East Asia 2015 in Jakarta

Draghi drafts a plan to donate more money to bankers, the era of ‘money for nothin’ is flourishing

Any doubt?

The European Sting at the Retail Forum for Sustainability live from Barcelona

Five years down the drain

Who is to pay the dearest price in a global slowdown?

Memoirs from a unique trip to China: “my new old dragon” (Part II)

Draghi: printing a full extra trillion non negotiable to help all borrow cheaply

Campaign kicks off with High-level Event on #FairInternships

Do academia and banks favour a new Middle Ages period?

Google strongly rejects EU antitrust charges and now gets ready for the worst to come

The Eurogroup+ is born to govern the EU Banking Union

Varna (Bulgaria) awarded European Youth Capital 2017

At the edge of humanity: refugee healthcare in Greece and the EU

IMF v Germany: Eurogroup keeps the fight under control

EU seeks foreign support on 5G from Mobile World Congress 2015 as the “digital gold rush” begins

Eurostat confirms a dangerously fast falling inflation in Eurozone

Is the EU’s enlargement over-stretched?

G20 LIVE: “International communities and leaders have great expectations for 2016 G20 summit in Hangzhou China”, Mr Wang Xiaolong, the Chinese Foreign Ministry’s special envoy stresses live from G20 in Antalya Turkey

Will Turkey abandon the refugee deal and risk losing a bonanza of money?

Snowden is the “EU nomination” for this year’s Oscars

Young students envision turning Europe into an Entrepreneurial Society

Dangerous Trumpism in the Middle East with an anti-European edge

Grexit no longer a threat but how to manage a “tutti frutti” government if not with fear?

The Sting’s Mission

Desires for national independence in Europe bound by economic realities

Germany fears that Americans and Russians want to partition Europe again

UK economy in dire straits: leading banks now officially plan to Brexit too

European Business Summit 15th year: Controversy and Constructive Ideas

Eurozone set to abandon monetary and incomes austerity and adopt growth friendly policies

The 13th round of TTIP negotiations hits a wall of intense protests and growing concerns

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

Who really cares about the 26.2 million of EU jobless?

MWC 2016 LIVE: T-Mobile US reveals 5G trial plans

CDU-SPD agree the terms for EU’s Banking Union

Pharmaceuticals spend millions to push TTIP while consumer groups spend peanuts

Light at the end of the Eurozone tunnel

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s