Google is facing a charge from the European Commission saying that the search giant is abusing monopoly power. This is the third charge that has been placed in just a little more than a year.
EU Antitrust Commissioner Margrethe Vestager addressed the media at EU Commission headquarters in Brussels, Belgium on July 14, 2016, stated that it have brought a third antitrust charge against Alphabet Inc’s Google. The accusation by EU is that the search engine blocks its rival in online search advertising.
“Google is a company that has come up with some incredibly innovative products that have made a difference to our lives. But that doesn’t give Google the right to deny other companies the chance to compete and innovate,” said Vestager.
According to the competition watchdogs, the Silicon Valley company provides more than 90 per cent of general web searches in Europe. It is abusing that dominance and harming competition in related market and in the latest statement, EU claims that it has more evidence of how Google abuses its dominant position by favouring its own comparison shopping service.
“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. My goal is to ensure that consumers and innovative companies can benefit from a competitive environment in Europe,” Vestager added.
Google has 10 weeks to respond to the complaint. Vestager stated, “I will consider their arguments carefully before deciding how to take both cases forward. But if our investigations conclude that Google has broken EU antitrust rules, the Commission has a duty to act to protect European consumers and fair competition on European markets.”
The first charge which was issued in April 2015 stated that Google is exploiting its advantage in search engines to promote its own shopping services.
Vestager said, “We have raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation.”
The commission relies on confidential complaints from the giant company on building the case. One of which is Foundem. The co-founder of Foundem, Shivaun Raff, warned that any further delay could crush competition in that market. He said, “While we understand and respect the commission’s thorough, step-by-step approach, Google’s unprecedented power and proven track record of exploiting every delay to further extend and entrench its immensely harmful anti-competitive practices creates a particularly strong imperative to act swiftly in this case.”
The second one was that claimed that Android’s overwhelming market share in mobile software has been abused to push its search engine and Chrome web browser.
Amit Shanghai, the Google executive in charge of its search engine, denied the accusation. On April 15, 2015, he posted, “If you look at shopping… 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.”
He said: “If you look at shopping… 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.”
In response to Amit’s statement above, EU stated that the facts unveiled by its investigation do not support the claim. It said, “Merchant platforms are in a different market – in fact, they are customers rather than competitors of comparison shopping services. But today’s Supplementary Statement of Objections also explains that even if there was one big market where comparison shopping sites and merchant platforms all competed with each other, Google’s actions would still have harmed competition.”
Vestager had said in 2015, “Google is not just a monopoly; it is probably the most powerful monopoly in history. As the gatekeeper to the Internet, Google plays a decisive role in determining what the vast majority of us read, use, and purchase online,”
EU has the authority to fine the company up to 10 per cent of the global revenue if it is found guilty. As the company had gained a global revenue of US$75 billion (S$101,085 billion) in 2015, this means that Google could be fined US$7.5 billion (S$10 billion).