EU set to file antitrust lawsuit against Google for unfair practices
If the Commission finds Google guilty, it can order the company to change its business practices and impose fines of up to 10 percent of the company’s global proceeds – more than $6 billion based on its annual revenue.
The EU has been investigating Google since 2010 over complaints by some 20 European and US companies, including Microsoft and Yelp. They want the EU to compel Google to stop favoring its own services with search algorithms – an issue they also raised with US regulators.
A 2012 Federal Trade Commission investigation found that the California-based company had tampered with search algorithms to favor its own services, but the FTC declined to press charges after Google explained it was seeking to improve user experience by ensuring “overall result diversity.”
“Google should apply its own algorithm fairly to everything, including its own services,” said Thomas Vinje, a lawyer for one of Google’s rivals.
The EU’s former competition commissioner, Joaquin Almunia, tried to reach an agreement with Google on three occasions, but the plaintiffs protested the settlements did not go far enough. Almunia was replaced last year by Margrethe Vestager, leader of the Danish party “Radical Left,” who made the decision to go after Google after consulting with European Commission President Jean-Claude Juncker on Tuesday.
Although there have been several antitrust investigations into Google in recent years, this is the first time formal charges will be brought against the company. Under EU rules, Google will have 10 weeks to respond to the allegations and call a hearing to present a defense.
Google has rejected the calls to make public its search algorithms, saying those were the company’s intellectual property and that revealing them would “lead to the gaming of our results, which would be a bad experience for users.”
— Peter Spiegel (@SpiegelPeter) April 14, 2015
In an internal memo obtained by Re/Code, Google said it had a “very strong case,” arguing that the company practices were serving customers better by saving them time and effort, and showing charts demonstrating that competitors were not endangered by Google’s shopping and travel services.
Google also asked the employees not to comment on pending legal issues, but to focus on “what you all do best … building great products that serve our users and customers.”
Earlier this year, US President Barack Obama – who enjoys cordial relations with several Silicon Valley giants – argued that EU regulators went after US companies because their own companies could not compete. “Oftentimes what is portrayed as high-minded positions on issues sometimes is just designed to carve out some of their commercial interests,” Obama said.
The European Commission’s spokesperson called Obama’s comments “out of line.”