The EU Commission Takes A Shot At Google, Google Fires Back

csThe European Commission hit Google with a Statement of Objections on Wednesday, claiming the tech giant prioritizes its shopping comparison service in search results, featuring Google Shopping results more prominently on screens, thereby abusing its dominance.

The Commission claims this policy artificially diverts traffic, hinders market competition and violates EU antitrust rules, which ultimately harms consumers.

“Google now has the opportunity to convince the Commission to the contrary,” said Margrethe Vestager, the EU Commissioner in charge of competition policy, in a statement. “However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe."

Google contested the EU’s claims in a blog post. While not denying prioritization of Google Shopping results, Amit Singhal, Google’s SVP of search, said the company is not anti-competitive since consumers still have plenty of choice.

“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 off the mark,” Singhal wrote.

Singhal adds that other players, like Facebook, Pinterest, Twitter, Amazon and eBay, have been investing in their own search services, as consumers increasingly turn to social channels and alternative shopping sites for commerce recommendations. Alternative search engines like Quixey, DuckDuckGo and Qwant have also attracted investors and are taking a portion of international search markets.

Google emphasized the volume of competition in the online shopping space in Germany, France and the UK, with Amazon and eBay leading the pack. In Germany, for example, Axel Springer’s Idealo is the third most popular specialized search service after Amazon and eBay.

Singhal also noted that in mobile, most activity happen in apps – beyond the influence of Google Shopping search results.

“It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead,” Singhal adds.

Officials at the European Commission and a spokesperson from Google declined further comment.

The EU has been vocal lately about the business practices of US tech firms.

Facebook recently contested a EU privacy report out of Belgium that challenged the social firm’s privacy and tracking policies. Facebook later conceded the existence of a “bug” tracking Internet users who visited Facebook, but didn’t have an account.

And in October, Hamburg data protection commissioner Johannes Caspar ruled that Google must obtain Germans’ expressed permission to access their data, or face $1.27 million in fines. In November, German regulators also proposed a breakup of the company as part of a 4-year-old EU antitrust investigation into Google’s search and ads business.

The European Commission also launched tax investigations into Amazon and Apple’s fillings at the beginning of the year.

And separate from its Statement of Objections, the EU Commission opened an antitrust investigation into Google’s Android dealings on Wednesday. The focus of the investigation will center on determining if Google is in violation of anticompetitive legislation on its apps and its Android services.

“Smartphones, tablets and similar devices play an increasing role in many people's daily lives, and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company,” Vestager added in Wednesday’s statement.

The EU Commission’s allegations are inherently tied to Google’s data collection and advertising business, according to Romain Job, US GM of Smart Adserver, a Paris-based ad tech firm.

"The revenue of Google mostly comes from advertising and thus from the data it collects from its different services,” Job said. "All of these services are linked with each other, thus creating a dominant market position.”

“Google is well aware of this issue, as it started putting some boundaries between certain teams," he added. "From a business point of view, I'm not sure it makes sense to attack [Google] on its ecommerce business, but it does from a legal standpoint.”

1 Comment

  1. Vladimir P.

    I'm from Europe, but I think what EU Commission is doing to the US tech companies in Europe is equal to trade protectionism. It's interesting that EU-based companies are never investigated - only the ones based in the US and China.

    Reply

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