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E.U. Files New Round of Antitrust Charges Against Google Google Faces New Round of Antitrust Charges in Europe
(about 2 hours later)
Margrethe Vestager, Europe’s antitrust chief, announced on Thursday a new round of charges against Google, claiming that some of the company’s advertising products restricted consumer choice. When it comes to Europe’s lengthy investigations into Google, Margrethe Vestager, Europe’s antitrust chief, is hoping that the third time’s a charm.
The antitrust charges are the latest effort by Ms. Vestager to rein in Google’s activities in the European Union, where the company already holds a roughly 90 percent share in the region’s search market. Ms. Vestager announced on Thursday a new round of competition charges against the search giant — the third set since early 2015 — claiming that some of the company’s advertising products had restricted consumer choice.
The European Commission, the bloc’s executive arm, has “raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation,” Ms. Vestager said in a statement on Thursday. The latest antitrust efforts are part of her continuing push to rein in Google’s activities in the European Union, where the Silicon Valley company has captured roughly 90 percent of the region’s online search market.
“If our investigations conclude that Google has broken E.U. antitrust rules, the Commission has a duty to act to protect European consumers and fair competition on European markets,” she added. “Google’s conduct, based on our evidence, is harmful to consumers,” she told reporters in Brussels on Thursday. “Google’s magnificent innovations don’t give it the right to deny competitors the chance to innovate.”
The new charges relate to some of the technology giant’s online advertising tools — the main engine for Google’s $75 billion in annual revenues — and parts of the company’s search business linked to online shopping. The announcement represents a setback for Google, which vigorously denied any wrongdoing in two previous European antitrust charges linked to Android, its popular mobile operating system, and some of its dominant online search services.
Google said in a statement that it would provide a detailed response to the charges “in the coming weeks,” but added, “We believe our innovations and product improvements have increased choice for E.U. consumers and promote competition.” It also comes at a difficult time for Europe’s competition authorities, which have been unable to land a knockout punch against Google’s perceived abusive activities in the region, despite investigations that date back to 2010.
Other Silicon Valley tech companies like Amazon, Apple and Facebook also have faced regulatory investigations in Europe, raising questions over whether the region’s lawmakers are specifically focusing on these American giants that have come to dominate much of the digital world. European officials deny any such bias. The stakes are high. Google could face fines of up to 10 percent, or about $7 billion, of its global annual revenue if it is found to have broken Europe’s tough competition rules.
Since early 2015, the region’s competition authorities have filed antitrust charges against some of Google’s search services and Android, its mobile operating system that is used in 76 percent of the smartphones across the European Union. For months, both sides have been jockeying for position, with Google already filing lengthy legal arguments about why it believes its European activities are lawful.
Officials have accused Google of abusing its dominant market position to favor some of its own digital products, like online search and Google Maps, over those of rivals like Yelp and Microsoft. Google denies any wrongdoing in those cases, saying that it faces robust competition from European and American rivals. Ms. Vestager’s antitrust charges are just one of a number of regulatory challenges to Google’s activities in Europe, ranging from tax investigations in France and Spain to concerns that Google does not fully protect people’s online privacy rights. The company denies any wrongdoing.
Google could face fines of up to 10 percent of its global annual revenues if it is found to have broken Europe’s tough competition rules. Other Silicon Valley technology companies like Amazon, Apple and Facebook have also faced regulatory investigations in Europe, raising questions over whether the region’s lawmakers are specifically focusing on these American giants, which have come to dominate much of the digital world. European officials deny any such bias.
The latest antitrust charges focus on complex advertising contracts between Google and companies that want to use its advertising services and search product on their websites. Google said in a statement on Thursday that it would provide a detailed response to Europe’s latest charges, but it added, “We believe our innovations and product improvements have increased choice for E.U. consumers and promote competition.” The company has until the fall to respond.
Europe’s competition officials say that Google forced some companies, including publishers and telecommunications carriers, among others, to sign up to onerous terms that limited competitors from offering rival advertising options on these websites, potentially limiting consumer choice. American competition officials have also reviewed claims that Google abused its market position to favor its services over those of rivals, though the Federal Trade Commission has yet to find any violations.
These specific advertising activities are related to AdSense for Search and AdWords, two of Google’s advertising services, which also have been reviewed by American and Canadian antitrust officials in the past. Google denies any wrongdoing. Europe’s new antitrust charges represent a further ratcheting up of the region’s often frosty relationship with Google.
In particular, European antitrust officials are now targeting some of the company’s online advertising tools — the main engine for Google’s $75 billion in annual revenue.
They say that the company may have abused its dominant market position when offering some of its search products on third-party companies’ websites.
These businesses — including publishers and online retailers — can use Google’s search engine on their sites so that people can find information like newspaper articles or promotions. Such search deals with third-party companies, which date to 2006, also include showing paid-for advertising next to search results, often provided by Google.
Ms. Vestager said on Thursday that the search giant may have abused its dominance — it holds roughly an 80 percent market share in this type of niche on-site search — by forcing companies to sign onerous contracts that limited competition and reduced consumer choice.
Since 2009, Google has made it easier for advertising rivals to show their offerings alongside Google’s services. But Europe’s competition chief said that Google still required third-party companies to show a minimum number of Google-provided ads on their site. The Silicon Valley company also requires businesses using the service to ask for approval on where some rivals’ ads may be shown on their websites.
“All these restrictions allowed Google to protect its market share and stifle competition,” Ms. Vestager said.
Europe’s antitrust authorities have also doubled down on a previous competition charge, announced last year, which claimed that Google had diverted traffic from competitors in favor of its own comparison-shopping site.
On Thursday, Ms. Vestager said her team had found new evidence to buttress their claims, adding that because of Google’s actions, European consumers may not have access to the most relevant search results when looking online for goods and services.
Yet when asked about the failure of European antitrust authorities to order fines or changes to the way Google does business, despite several years of investigations, Ms. Vestager emphasized the importance of avoiding embarrassment in European courts if Google eventually appeals the charges successfully.
“Speed is of the essence,” but “the other side of that coin is quality,” Ms. Vestager said on Thursday. “Sometimes that kind of quality comes at the cost of speed.”