EC hits Google with Statement of Objections

April 16, 2015 | 07:37

Tags: #advertising #anticompetitive #antitrust #margrethe-vestager #monopoly

Companies: #european-commission #european-union #google

The European Commission has announced that it is reaching the end of its five-year investigation into advertising giant Google, serving the company a Statement of Objections detailing anticompetitive behaviours.

Google enjoys a near-monopoly of the digital advertising realm, using its popular services like Google Drive and its eponymous search to gather data on its many users. This lucrative data, on everything from browsing habits to the contents of emails, is then used in support of the company's real customers: companies looking to make use of its highly-targeted advertising platforms.

The EU has been investigating Google since 2010 on a variety of claims regarding allegedly anticompetitive behaviour. The European Commission has now published its findings, detailing in a Statement of Objections the allegations it believes can be substantiated in a more focused investigation. This statement includes a section alleging that Google 'gives systematic favourable treatment' to its own Google Shopping price comparison service, pushing rival services which actually offer prices from a wider selection of retailers down the list to the consumers' cost, while a second section claims that Google's tight control over the supposedly open-source Android platform which has resulted in a 'hindering [of] the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products.'

'The Commission's objective is to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation,' claimed Margrethe Vestager, the EU Commissioner in charge of competition policy, of the statement. 'In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules. Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.

'I have also launched a formal antitrust investigation of Google’s conduct concerning mobile operating systems, apps and 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.

At the time of writing, Google had made no official statement on the EC's announcement but a leaked internal memo obtained by Re/code earlier this week described the move as 'very disappointing' but advised staff that 'an SO [Statement of Objections] is not a final finding; it's a document in which the Commission staff sets out its preliminary arguments so that the company in question can respond' before describing it as 'an opportunity for Google to tell our side of the story.'

The EU investigation is expected to continue, but if Google is found guilty of breaching antitrust legislation in the region the company could face fines of several billion Euros in total.
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