Google hits back at ‘unfounded’ monopoly abuse charges


The company has submitted a formal response to a Statement of Objections from the European Commission, saying that allegations of Google unfairly promoting its own internet shopping services are “incorrect” and “unfounded”.

According to The Telegraph. 150-page response is the latest salvo in the five-year investigation of the search giant that in theory could lead to a fine worth billions of dollars. It comes five months after Margrethe Vestager, Europe’s competition commissioner, charged Google with exploiting its monopoly in online searches to boost its price comparison service at the expense of rivals.

Google’s rejection of the charges potentially sets the company up for further battles with European authorities, which are also investigating whether Google uses its dominant Android smartphone software to promote its services.

Searching Google for consumer products such as televisions and clothes often yields a results page giving heavy prominence to an eye-catching box of pictures and links, which retailers pay Google to feature in. The Commission claims that this feature, introduced in 2012, means Google is using its 90 per cent share of Europe’s search market to crush rival comparison websites.

In its response, sent on Thursday afternoon, Google denied that competition had been harmed by introducing the feature. It said the last decade had seen traffic to price comparison websites from Google rise by 227 per cent, and denied that shoppers are worse off, claiming that consumers were increasingly going directly to Amazon and eBay to buy goods.

The company also insisted that, rather than using its dominance to control shoppers’ options, “Google increases choice for European consumers”.

“We believe that the SO’s preliminary conclusions are wrong as a matter of fact, law, and economics,” Google said on Thursday.

“The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers.

“Our response provides evidence and data to show why the SO’s concerns are unfounded… [it shows] why the Statement of Objections is incorrect in failing to consider the impact of major shopping services like Amazon and eBay, who are the largest players in this space.”

Ms Vestager’s officials will now examine Google’s response and decide how to proceed. They may amend the Statement of Objections or, if it is seen as invalid, proceed with action against the company. In theory, the company could be fined up to 10 per cent of its global revenues, which would amount to almost $7bn (£4.5bn).

Google will be keen to avoid the same fate as Microsoft, which was dragged through a lengthy battle with the previous competition commissioner Joaquin Almunia before being fined $731m in 2013.

Mr Almunia, who was replaced by Ms Vestager last year when the new European Commission was formed, agreed a deal with Google in his final months in charge, but was unable to get it through Brussels amid heavy lobbying from Google’s rivals.

FairSearch Europe, a coalition of businesses that have demanded the Commission take action on Google, said there was no weight in the company’s response.

“Google has decimated competition in that market by preferencing its own product comparison service in its search results, and consumers have been harmed — and paid higher prices – because Google has cornered the shopping comparison market,” FairSearch Europe spokesman Thomas Vinje said.