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April 15, 2015

EU to announce action against Google over antitrust charges

New EU antitrust head poised to bring five-year battle to closure.

By CBR Staff Writer

Europe’s antitrust regulator is expected to file formal charges against Google for violating antitrust laws, stepping up the game in the intensifying five-year competition battle.

A source familiar with the matter said that EU antitrust chief Margrethe Vestager has made the decision yesterday in agreement with European Commission president Jean-Claude Juncker, and is expected to make an announcement shortly.

Google has been accused by various companies, including Microsoft, Tripadvisor, Streetmap and others since 2010 of exercising "favouritism".

The companies allege that the search giant deliberately lists its own offerings over rivals in search results in areas like travel, shopping and maps.

European and US tech companies are stepping up pressure on Vestager to take decisive action against Google, which they say, has cornered 90% market share by placing its products higher in search, irrespective of "what is best for consumers."

Over 90% of Europe’s general search market is being dominated by Google, making the search bias stand out.

As cited in the Wall Street Journal, the European Commission has 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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Google is also under the scanner for promoting its own services through its Android mobile-operating system, the publication added.

Ioannis Lianos, a professor of global competition law at University College London told WSJ that Google might be looking at fines of over $6bn besides injunctions that require reshaping its business.

Post issue of complaint by EU, Google will have time three months to respond and request a hearing to make its case. However, if the EU decides to go ahead with the charges, Google would have to appeal to the EU’s appeals courts in Luxembourg – a process that could take years.

Google, meanwhile, is putting up a brave front, assuring employees that it has a "very strong case" against the expected charges. The company had been denying all the charges related to competition from the beginning.

EC had imposed antitrust penalties on other tech giants in recent past, ordering Intel to pay $1.2bn in 2009 and Microsoft €516m in 2013.

In fact, Google is not facing fire only from EU. BBC reports that India’s Competition Commission recently delivered a report in its three-year probe into claims of unfair business practices by search giant in the country.

Russia, Brazil, Argentina, Taiwan and Canada have also opened investigations against Google.

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