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Biz Break: Google To Face Antitrust Charges In Europe, Reports Say

SAN JOSE MERCURY NEWS
http://www.mercurynews.com/60-second-business-break/ci_27912808/biz-break-google-face-antitrust-charges-europe-reports
European Union officials will officially charge Google with illegally abusing its dominant market position in search Wednesday, several news organizations reported Tuesday afternoon.
 
 
 

The Wall Street Journal, Financial Times and New York Times separately reported -- all based on anonymous sources -- that EU Competition Commissioner Margrethe Vestager had decided to file antitrust charges against the Mountain View Web giant. She is expected to share the decision with fellow commissioners in a Wednesday meeting and then publicly announce the decision, the reports said.

 
 

Google has been the subject of an antitrust investigation since 2010 that focuses on how the company promotes its myriad other services in search results. Rivals -- including Microsoft, which suffered its own decade-long antitrust battle in Europe -- complain that Google has an unfair advantage, and Google made concessions in a U.S. investigation that ended in 2013.

 
 

Google reached a similar deal with the previous EU competition commissioner, but the negotiated compromise fell apart last fall. The EU parliament has since weighed in against Google, voting in a largely symbolic fashion to seek the unbundling of search engines from other commercial enterprises.

 
 

California-based nonprofit Consumer Watchdog called earlier Tuesday for the EU to file the charges, called a "Statement of Objections," with director John Simpson saying that the delay in filing formal charges had allowed Google to maintain "its abusive anticompetitive behavior."

 
 

"If nothing else, a Statement of Objections will concentrate Google executives' minds and prompt serious negotiations," Simpson wrote in a letter to the EU's Vestager. "If the Internet giant fails to give an adequate response, the path is open to force changes and levy substantial fines."

Google could face a fine of up to 10 percent of its annual revenues -- which totaled $66 billion in the 2014 calendar year -- as well as demands to change its practices if it fails to defend against the charges.

"It's a serious investigation with serious consequences if the EU chooses to bring a case and has evidence," Loyola University School of Law antitrust professor Spencer Waller told Bloomberg News earlier this week about the case. "What happens in almost every case involving the abuse of a dominant position is some combination of a fine and an order to change the behavior in different ways."

Dozens of companies, including Yelp, have complained that Google favors its own services in search results, which becomes a larger problem as Google expands its offerings. The problem is more acute in Europe than the United States because Google is more dominant in search across the pond: While Google commanded nearly 65 percent of searches in the United States in February according to comScore, studies have found that number closer to 90 percent in Europe.

Antitrust charges would be the latest in a series of complications Google has faced in Europe. Last year, Europe's highest court ruled that people should be able to control the information about them that can be accessed through Google's search engine, a ruling dubbed "the right to be forgotten." Since the ruling, Google has received more than 200,000 requests for information to be removed from its search results.

Google's tax payments in Europe have also caused consternation on the continent, with Google claiming it conducts all sales from Ireland and thus avoiding potentially larger tax bills in other European countries. The company has also shuttered its Google News service in Spain after the country passed a law requiring Google to pay news organizations for linking to their sites or presenting snippets of their coverage.

Google shares fell 1.6 percent to $539.78 Tuesday.