The European Commission has formally announced that it is opening an anti-trust probe into Google’s business practices. This probe concerns the way Google ranks search results for goods and services, as well as a secondary look into whether Android is creating stifling innovation and creativity.
A Statement of Objection has been sent to Google’s European headquarters, and the internet search giant now has the opportunity to answer the allegations. The EC is mainly concerned that Google unfairly places its own shopping services at the top of search results; an action that it says is an abuse of a dominant position in the search engine market. Preliminary findings discovered that results for Google related services were not subject to rankings, as most other results would.
The EC also claims that Google has a systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services. All of this results in a detrimental impact on consumers and innovation.
It is also looking into the Android operating system that has become the most popular mobile OS in the world. There are shades of the anti-trust suite brought against Microsoft decades earlier for pre-installing Internet Explorer on Windows. The EC believes that pre-loading Google’s own applications illegally hinders the development and market access of rivals.
Google is preparing a response to the Statement of Objection, and has sent an internal memo to staff to keep them informed about what is going on. The memo says that Google does not believe that its ranking affect consumer behaviour, and has pointed out that Google Shopping only accounts for a small amount of online retail activity; especially when compared to sites like Amazon and eBay.
The company also believes that Android has not hindered anything by offering a free open-source operating system for any manufacturer to adopt. Google says that the OS has brought the price of smartphones down and increased the number of available choices for consumers.
Google is not facing any fine at the moment, as the investigation is only in the early stages. This move from the EC does not come as a surprise as the Commission has been gathering evidence and information for some time now. It may take Google a while to respond to the Statement of Objection – it says between one to two years in its own memo – and the case will go on for a lot longer.
[Source: European Commission 1, 2; Recode]
