We’ve posted a number of articles regarding the European Union’s ongoing investigation(s) concerning Google’s alleged antitrust practices (see the links to the original articles below). On April 15th, the regulatory body finally filed an official complaint against the Mountain View behemoth.
The complaint accuses Google of using its dominance in online search to stifle the competition. If the charges are proven to be true, this could be the first in a litany of accusations. The specific charge in this case is that Google Shopping items are displayed foremost in the search results, when users search for products. The EU says that Google MAY (my capitalization), “artificially divert traffic from rival comparison shopping services and hinder their ability to compete, to the detriment of consumers, as well as stifle innovation.”
In the Unites States, Google has about 65% of the search engine market share, but in most of Europe, it’s above 90%. The companies that have complained to the EU about this dominance say that gives Google an incredible influence over other entities that generate business via web traffic. And that list of competitors is rather long with names like Microsoft, Expedia, TripAdvisor, Nextag, Yelp, British price comparison site Foundem and German publishers VDZ and BDZV. The entire official list includes thirty companies. Some, we may have familiarity with and some not so well known. At least, here in the US. The point being that quite a number of other businesses feel that Google is unfairly pushing itself forward, while holding everyone else down.
Google responds that sites such as Amazon and eBay dwarf their business in European countries. Amit Singhal, Google’s senior vice president for search states that, “Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player. “Yet that is exactly what’s happening in our world.”
If the allegations stick, Google could face fines as large as ten percent of their annual sales, which would amount to $6 billion (though final fines might not go as high as that) and be forced to change the way its search works by treating its own comparison shopping service the same as all of its competitors in relevant search results. Google has ten weeks to issue an official response.
Just so you’re aware that it doesn’t end here, the European Commission also announced the opening of an investigation into Google’s mobile operating system, Android. So, this might be just the start of years of litigation.
We’ll keep you posted as things continue to unfold.
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