Credit: Carlos Luna/Flickr

Google could face massive fines from the EU

The search giant is under fire over claims it's abusing its dominant market position.

by Jack Torrance
Last Updated: 22 Apr 2015

The culture clash between Silicon Valley and Europe continues. Last week it was Facebook under fire over privacy issues, today Google will be accused of breaching competition rules by favouring its own products when delivering search results.

The European Commission has release a 'statement of objections', alleging that the search giant diverted traffic from rivals to its own shopping services, provoking talk of a tussle on the same scale as the one between the EU and Microsoft in the nineties.

'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,' said Margethe Vestager, the commissioner in charge of competition policy. '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.'

In a memo to employees, Google said it had a strong case against the accusations. 'The competition is just one click away — and it’s growing,' the memo said. 'People can use Bing, Yahoo, Quora, DuckDuckGo, and a new wave of search assistants like Apple’s Siri and Microsoft’s Cortana, as well as more specialized services like Amazon, Idealo, Le Guide, Expedia, or eBay. In addition, users increasingly turn to social networks like Facebook and Twitter to find news and suggestions — where to eat or which movies to watch.

'The memo was accompanied by four graphs illustrating how its shopping and travel services are actually performing pretty woefully when compared with the likes of Amazon, Ebay, and Expedia.

Google's mobile operating system, Android, is also expected to come under fire over claims it forces handset makers to favour its own apps like Youtube and Chrome, which often come preloaded on smartphones. Those of you with long memories will remember a similar fall out over Microsoft's bundling of Internet Explorer with Windows.

The move follows a five-year EU competition investigation into Google which the company almost settled last year. It now has 10 weeks to respond and could call a hearing to present it defence. The commission has the power to fine Google as much as 10% of its global turnover and impose limits on the way it does business, so if the regulator does come down hard then expect the Silicon Valley giant to fight tooth and nail to prove its case.

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