EU charges Google over shopping searches, to probe Android

European Union accuses Google Inc of cheating competitors by distorting Internet search results in favour of its Google Shopping service, launches antitrust probe into Android.

BRUSSELS, BELGIUM (APRIL 15, 2015) (REUTERS) – The European Union accused Google Inc on Wednesday (April 15) of cheating competitors by distorting Internet search results in favour of its Google Shopping service and also launched an antitrust probe into its Android mobile operating system.

Competition Commissioner Margrethe Vestager outlined the Commission’s preliminary view and said the U.S. tech giant had been sent a Statement of Objections — effectively a charge sheet — to which it can respond.

“Google’s favourable treatment of its comparison shopping service, you probably know it as Google Shopping, is an abuse of Google’s dominant position in general search. Google now has ten weeks to respond, and of course I will carefully consider the response before deciding how to proceed,” she told reporters in Brussels.

The Commission, whose control of antitrust matters across the wealthy 28-nation bloc gives it a major say in the fate of global corporations, can fine firms up to 10 percent of their annual sales — or a penalty of over $6 billion for Google.

If it finds that companies are abusing a dominant market position, the EU regulator can also demand sweeping changes to their business practices, as it did with U.S. software giant Microsoft in 2004 and chip-maker Intel in 2009.

“On the basis of our initial investigation, the Commission also today have launched a formal in depth investigation of Google’s conduct as regards the mobile operating system Android, apps and services,” Vestager said.

Google said in a written statement it strongly disagreed with the European Commission, saying the search results displayed for shopping queries had not harmed the competition and partner agreements with mobile phone operators were voluntary.

Vestager announced the moves after a meeting of Commissioners and on the eve of a high-profile visit to the United States, following five years of investigation and abortive efforts to strike a deal with Google by her Spanish predecessor, Joaquin Almunia, who handed over the politically charged dossier to the Danish liberal in November.

However, the focus on the ranking of searches for shopping sites — Google has its own service called Google Shopping — did not address all the complaints lodged with the Commission by competitors, large and small, in Europe and the United States, who say Google has hurt their business.

Google initially has 10 weeks to respond to the charges and can demand a hearing. A final resolution — quite possibly involving court action if Google does not choose to settle — is likely to take many months and probably years.