As expected, the EU has formally accused Google of abusing its dominant position in search to favor links to its own products over those offered by competitors. The complaint takes the form of a Statement of Objections: a formal method of announcing that it believes Google has acted illegally and that a full investigation is underway.
The Commission’s preliminary view is that such conduct infringes EU antitrust rules because it stifles competition and harms consumers. EU Commissioner Margrethe Vestager said that “Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”
Google has not wasted any time in attempting to convince the Commission otherwise, arguing in a blog post that the evidence shows that Google has not harmed traffic to competitor websites …
The blog post says that while “vociferous complainants” like Expedia, TripAdvisor, and Yelp have all claimed that Google’s own services have harmed their businesses, with Google Shopping and Google Flight Search specifically named, these claims are not born out by the evidence.
[All have] alleged that Google’s practice of including our specialized results (Flight Search, Maps, Local results, etc.) in search has significantly harmed their businesses. But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.
Yelp calls itself the “de facto local search engine” and has seen revenue growth of over 350% in the last four years. TripAdvisor claims to be the Web’s largest travel brand and has nearly doubled its revenues in the last four years. Expedia has grown its revenues by more than 67% over the same period — and recently told investors […] “we have proven an ability to get our fair share in the Google marketplaces.”
As you’d expect from Google, its arguments are backed by a raft of graphs showing the relevant supporting data. Google will doubtless also be pointing to the fact that the Federal Trade Commission cleared it of the same charges in the U.S., though a leaked report suggested this decision had been “a close call.”
Even if Google does manage to win the argument, however, that won’t be the end of its troubles with the EU Commission. A separate investigation has been opened into whether Google has abused its dominant position in the mobile field to force smartphone manufacturers to favor its own apps over rival ones in return for getting the right to use Android.
Image: NY Times