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April 16, 2015

Google rebuffs EU, says Android and Search aphrodisiacs for competition

The search engine says its dominance has not harmed innovation.

By Jimmy Nicholls

Google has rebuffed the European Union’s allegations that it is abusing its market dominance in the search and smartphone markets.

In a series of blog posts the search engine claimed that despite its 90% share of the European search market and it subsidiary Android’s 70% share of the European smartphone market, competition was still thriving in the sector.

Amit Singhal, SVP at Google Search, said: "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.

"Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding. We’re seeing innovation in voice search and the rise of search assistants — with even more to come."

The comments came after Margrethe Vestager, competition commissioner at the EU, announced on Wednesday that Google would be sent a corporate charge sheet alleging it was unfairly prioritising its Shopping service in its search results.

Responding to these claims Google produced a graph charting unique visitors to shopping sites in the UK, which showed that Google Shopping languished far behind the auctioneer eBay and online retailer Amazon.

Singhal also addressed complainant firms Axel Springer, Expedia, TripAdvisor, and Yelp, arguing that the firms had seen revenue growth and also invested in the search market.

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"Companies like Axel Springer, Expedia, TripAdvisor, and Yelp have alleged that Google’s practice of including our specialised results in search has significantly harmed their businesses," he said.

"But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story."

Writing separately, Android’s VP of engineering Hiroshi Lockheimer argued that the widespread adoption of Google’s mobile operating system had also been a boon for technology due to its open nature.

"Today people are building almost anything with Android — including tablets, watches, TVs, cars, and more," he said. "Some Android devices use Google services, and others do not."

The EU’s complaints are only the latest development in a case that dates back to 2010, when the commission decided to investigate Google.

Speaking to the Financial Times, European officials predicted that these charges were the start of a more vigorous period of EU activism in markets, coming shortly after Vestager took up the role of commissioner.

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