The EU Commission has not only sent a Statement of Objections to Google relating to comparison shopping services it has also opened a separate formal investigation on Android. And there are further ongoing investigations re other aspects of search services provided by Google. The material below is largely taken from the official press release; Google has since responded in its blog and relevant links have been added.
The Commission’s Statement of Objections alleges that the company has abused its dominant position in the markets for general internet search services in the European Economic Area (EEA) by systematically favouring its own comparison shopping product in its general search results pages. The Commission’s preliminary view is that such conduct infringes EU antitrust rules because it stifles competition and harms consumers. (The Commission’s press release states that sending a Statement of Objections does not prejudge the outcome of the investigation; others may offer a different view.)
The Commission has also formally opened a separate antitrust investigation into Google’s conduct as regards the mobile operating system Android. The investigation will focus on whether Google has entered into anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices.
EU Commissioner in charge of competition policy Margrethe Vestager said:
The Commission’s objective is to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation. In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules. Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.
I have also launched a formal antitrust investigation of Google’s conduct concerning mobile operating systems, apps and services. Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.
Comparison shopping
Comparison shopping products allow consumers to search for products on online shopping websites and compare prices between different vendors. The preliminary conclusion of the Commission’s investigation opened in November 2010 is that Google gives systematic favourable treatment to its comparison shopping product (currently called ‘Google Shopping’) in its general search results pages, eg by showing Google Shopping more prominently on the screen. It may therefore artificially divert traffic from rival comparison shopping services and hinder their ability to compete on the market. 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. The Commission’s preliminary view is that to remedy such conduct, Google should treat its own comparison shopping service and those of rivals in the same way. Google now has the opportunity to respond to the Commission’s allegations within ten weeks and to then seek a formal hearing. The Commission considers that overall, previous commitment proposals from Google were insufficient to address its competition concerns.
Further details of the Commission’s Statement of Objections on comparison shopping can be found here.
Android
Since 2005, Google has led development of the Android mobile operating system. Android is an open source system, meaning that it can be freely used and developed by anyone. The majority of smartphone and tablet manufacturers use the Android operating system in combination with a range of Google’s proprietary applications and services. These manufacturers enter into agreements with Google to obtain the right to install Google’s applications on their Android devices. The Commission’s in-depth investigation will focus on whether Google has breached EU antitrust rules by hindering the development and market access of rival mobile operating systems, applications and services to the detriment of consumers and developers of innovative services and products. IP/15/4780
Further details of the Commission’s formal investigation of Google in relation to the Android mobile operating system can be found here.
It is hard to see how Google has a problem on the Android issue. After all Apple has got away with all sorts of similar things when it was dominating the market.
Ongoing Investigation
The Commission continues its ongoing formal investigation under EU antitrust rules of other aspects of Google’s behaviour in the EEA, including the favourable treatment by Google in its general search results of other specialised search services, and concerns with regard to copying of rivals’ web content (known as ‘scraping’), advertising exclusivity and undue restrictions on advertisers.
Google Response
Google has responded to the Commission’s action in blog posts which can be read here and here.
