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April 16, 2015

EU officially declares war against Google

Complaint has been formally filed against the search giant's abuse of powers.

By CBR Staff Writer

The EU has formally filed a complaint against Google over allegations of anti-competition malpractices.

Releasing the Statement of Objections to Google, EU antitrust chief Margrethe Vestager said the search giant has 10 weeks to respond.

In its complaint, the European Commission has accused Google of infringing EU antitrust rules and stifling competition by misusing its dominant position in search services in the European Economic Area (EEA) through "preferential treatment" to its own shopping links.

Google had been accused by various companies, including Microsoft, Tripadvisor, Streetmap and others since 2010 of exercising "favouritism" in search results in areas like travel, shopping and maps.

The commission,in its preliminary enquiries, found that Google Shopping, the search giant’s comparison shopping product, gets a prominent place on users’ screens. This has the potential to divert traffic away from rivals’ websites, hindering their ability to compete on the market.

The commission also deemed such practices being detrimental for consumers as they do not necessarily see the most relevant results in response to queries.

The commission spelled out four main areas in its investigation: potential bias in Google’s search results, scraping content from rival websites, agreements with advertisers that may exclude rival search-advertising services and contracts that limit marketers from using other platforms.

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Vestager also said that a separate antitrust investigation has been launched against Google over possible malpractices related to its popular mobile operating system Android.

Active since 2005, Android is an open-source system, in use by majority of smartphone and tablet manufacturers in combination with a range of Google’s proprietary applications and services. These manufacturers enter into agreements with Google to obtain the right to install Google’s applications on their Android devices.

The investigation will focus on whether Google has entered into anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices.

The EU’s formal announcement has been welcomed by Google’s rivals.

As cited in BBC lobbying group Icomp said: "Google’s abuse of dominance distorts European markets, harms consumers, and makes it impossible for Google’s rivals to compete on a level playing field.

Google says it strongly disagrees with these allegations and will make its case.

Google search chief Amit Singhal worte on Google blog: "We see this statement of objection as a crucial first step towards ensuring that European consumers have access to vibrant and competitive online markets.

"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 of the mark.

"It’s clear that: (a) there’s a ton of competition – including from Amazon and eBay, two of the biggest shopping sites in the world and (b) Google’s shopping results have not the harmed the competition.

"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."

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