Antitrust investigation for Google (in Europe and not only)

On July 14, 2016, the EU Commission sent two Statements of Objections to Google and Alphabet (Google’s parent company).unknown

With the first Statement, the EU Commission reaffirmed its preliminary conclusion that “Google has abused its dominant position by systematically favouring its comparison shopping service in its search result pages”.

With the second Statement, the Commission informed Google of its preliminary view that “the company has abused its dominant position by artificially restricting the possibility of third party websites to display search advertisements from Google’s competitors”.

Basically, Google would abuse its dominant position by:

(i) favoring its own comparison shopping service. The Commission sent after a first Statement of Objections on April 15, 2015, to which the company responded in August 2015. With this July supplementary Statement of Objections, the Commission gives additional evidence. According to the Commission, “users do not necessarily see the most relevant results in response to queries” because Google favors the display of its own comparison shopping service over those of competitors;

(ii) limiting the competitors’ ability to place search adverts on third party websites. The websites offer a search box that allows users to search for information. Whenever a user enters a search query, in addition to the search results, also search ads are displayed. If the user clicks on the search ad, both Google and the third party receive a commission. According to the Commission, Google prevented competitors from entering and growing in this area by requesting (a) an exclusivity requirement according to which third parties could not source search ads from Google’s competitors; (b) a minimum number of Google search ads; (c) competing ads to obtain Google’s authorization before making any change to the display of competing search ads.

Google has 10 weeks to respond to the objections moved by the EU Commission. Should the investigation conclude that Google broke the EU antitrust rules, the Commission will have a duty to act against Google.

The European action is one of the several antitrust investigations commenced against Google.

On August 11, 2016, Russian antitrust officials, the Federal Antimonopoly Service (FAS) found that Google abused its market position with Android, its mobile operating system, by favoring some of its digital services over those of rivals. FAS fined the company around $6.8 million. See here.

According to the New York Times, also the antitrust authorities in the U.S. and in India are considering proceeding against Google for anticompetitive behaviors.

 

The European Commission press release, Antitrust: Commission takes further steps in investigations alleging Google’s comparison shopping and advertising-related practices breach EU rules is available at http://europa.eu…    Open PDF

 

For more information, Francesca Giannoni-Crystal

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