Europe accuses Google of playing favorites

Europe’s top antitrust official has accused Google of breaking the continent’s rules by using its massive size to dominate the market, in an opening blow to what is likely to be a high-profile antitrust case.

The European Commission said on Wednesday it has sent the company a “Statement of Objections” about how it unfairly promotes its own shopping services over its competitors.

{mosads}The Silicon Valley titan “has given an unfair advantage to its own comparison shopping service, in breach of E.U. antitrust rules,” Margrethe Vestager, the European Union commissioner in charge of competition policy, said in a statement from Brussels on Wednesday.

The notification is not in and of itself a determination that Google has broken the law. However, the company will now be forced to defend itself against the charges, which could lead to significant monetary fines and a restructuring of its business.  

“[I]f the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe,” Vestager said.

In addition to the charges over its search services, the European Commission has also launched a formal antitrust investigation into whether Google broke the law with its Android mobile services, which it fears might have hindered the development of rival operating systems.

Wednesday’s announcement is the culmination of a years-long European probe into Google, which is the European Union’s dominant search engine even more so than in the U.S. In most European countries, Google is used by more than 90 percent of the public, compared to about two-thirds of Americans.

That market power has given it the incentive and ability to unfairly promote its own Google Shopping product whenever people search for things to buy, the European Commission said. Whenever people search for items, it alleged, Google shows a link to its own product as a more prominent result.

“The commission is concerned that users do not necessarily see the most relevant results in response to queries — this is to the detriment of consumers, and stifles innovation,” it said.

Google quickly pushed back against the allegations.

When it comes to shopping, Senior Vice President Amit Singhal wrote in a blog post, “it’s clear that (a) there’s a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google’s shopping results have not the harmed the competition.”

As evidence, Singhal showed graphs charting the amount of visitors to shopping sites in various European countries. In France, for instance, Amazon was far in the lead, with Google below numerous other competitors.

The European charges follow a similar antitrust probe of Google by American regulators, which the government decided to drop in 2013. Recent disclosures have raised the heat on that decision, though, by showing that staffers at the Federal Trade Commission might have been more willing to pursue charges than their bosses.

Google has 10 weeks to respond to the European action and then seek a formal hearing.