Brussels, 15/04/2015 (Agence Europe) - On Wednesday 15 April, the European Commission made an announcement that had been awaited for a few days that it will be sending a statement of objections to US online search giant Google, which it accuses of abusing its dominant position. It has opened an in-depth investigation into the operating system for Android mobile devices.
The Commission's letter focuses on Google's price comparison website Google Shopping. The Commission says that Google automatically favours its own price comparison in its results for general searches. In a statement published shortly after the Commission's announcement, Google said it deeply disagreed with the Commission's decision.
The US giant now has ten weeks to defend itself, but if it does not manage to do so, then Competition Policy Commissioner Margrethe Vestager said it would have to accept the legal consequences and change the way it operates in Europe. Vestager said she was well aware that she was dealing with a moving target, and said she wanted to find a future-proof remedy based on principles. Explaining that Google's services do not seem to operate according to the same algorithm of its competitors, the Commissioner said she didn't want to meddle in how it operates or arranges its screens.
Wednesday's statement of objections only applies to Google Shopping, but Vestager said the Commission would continue to examine three other areas of concern relating to Google, namely its scraping (copying) of content from competitors' websites, exclusivity in its publicity deals and unfair restrictions on advertisers using competing platforms.
The US giant now has ten weeks to defend itself over Google Shopping, failing which it might be fined up to 10% of its annual global turnover. Vestager said the doors were open and she wanted to hear what Google had to say, as a statement of objections is not the end of the process.
Quizzed about the fact that the investigation has taken five years and it would take even more time if the case is sent to the European Court of Justice, the Commissioner said it was important that the EU was built on law.
She pointed out that one out of every four plaintiffs in this case was a US company. Recently, US President Barack Obama said that the EU response was commercially driven (see EUROPE 11255). Political pressure from the European Parliament is very strong in this domain, leading a number of members of the US Congress to complain to the EP president, Martin Schulz, about a tendency in the EU to discriminate against foreign companies in the digital economy (see EUROPE 11205). MEPs have voted through a resolution calling on the European Commission to consider unbundling search engines from other commercial services. The Commissioner said that her decision was not political and was based on the facts.
Politicians queue up to react.
MEPs didn't take long to respond. Ramon Tremosa i Balcells (ALDE, Spain), who has been very active on this issue for years, said that several medium-sized European companies had gone bust in recent years and enough damage has been done to European consumers. “In the context of the digital single market, European competition law needs to be used to establish an open market with equal opportunities for all,” said Andreas Schwab (EPP, Germany). Morten Messerschmidt (ECR, Denmark), who drafted an annual report on competition policy, welcomed the fact that the Commission had finally shown its teeth after dragging its feet in recent years.
In February 2010, the Commission received three complaints about Google (from British price comparison website Foundem, French legal search engine ejustice.fr and Microsoft's Ciao - (see EUROPE 10085). In November 2010, it opened a formal investigation (see EUROPE 10267). Complaints have mushroomed in the meantime and there are currently some twenty plaintiffs. Three series of commitments have been offered by Google, at the end of April 2013 (see EUROPE 10835), in September 2013 (see EUROPE 10917) and January 2014 (see EUROPE 11008). The Commission almost settled the case using the third set of commitments, but the plaintiffs convinced it not to do so.
The plaintiffs are delighted with the news. Thomas Vinje, a spokesperson for Fairsearch, one of the plaintiffs in the Google case, welcomed the move, saying that the Commission's decision was significant for ending Google's anti-competitive practices.
Monique Goyens, director general of European consumer watchdog BEUC, said that Google should treat all services, including its own, by the same standards and this should apply to all its services, not just Google Shopping. Icomp points out: “A statement of objections always lead to significant changes in the defendant's business practices.”
Formal investigation into Android. The European Commission also announced that it has opened formal investigation proceedings into Google's conduct as regards the mobile operating system Android, apps and services. The Commission will investigate whether Google has signed anti-competitive agreements or abused its dominant position vis-à-vis Androids. Manufacturers of smartphones and tablets have to sign deals with Google to get the right to install Google's applications on their Android mobile devices. Google said in a press release that these agreements are voluntary and it was possible to use Android without using Google applications. (Elodie Lamer)