Google Unfairly Curbs Web Ads and Skews Search, EU Alleges

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The Google logo sits at their offices in Dublin, Ireland.

Photographer: Paul McErlane/Bloomberg
  • EU: new evidence that Google promotes own products in search
  • EU says Google restrictive contracts thwart rival online ads

Google faces a new antitrust attack from European Union regulators who allege the search engine skews shopping results in its own favor and unfairly restricts rival online advertising platforms.

The European Commission sent the Alphabet Inc. unit two statements of objections Thursday, widening a five-year probe and increasing the risk of hefty fines for the U.S. Internet giant.

Adding to an antitrust complaint over Google’s Android smartphone software in April, the EU said it has “a broad range of additional evidence and data" that Google systematically favors its own comparison-shopping service in its search results and that smaller rivals lose traffic when they appear lower down in results. It rejected Google’s argument that its chief shopping search rivals are Amazon.com Inc. and EBay Inc.

“We see that happen very, very, very often,” EU Antitrust Commissioner Margrethe Vestager told journalists Thursday, about how often Google pushes its own services to the top of search results. “This is where we have the strongest evidence and it’s the same kind of investigation that we are pursuing when it comes to travel and local search to see if we find a pattern that suggests that Google is abusing a dominant position in general search.”

Click here for a timeline of Google’s antitrust clashes with the EU

Google also hindered competition for online ads with its AdSense for Search product which places advertising on websites, including retailers, telecommunications operators and newspapers, the commission said. While its European market share is more than 80 percent, AdSense contributed less than 20 percent of Google’s total ad revenue in 2015, a percentage which has declined steadily since 2010.

The company prevented customers from accepting rival search ads from 2006 and maintained restrictions on how competitors’ ads were displayed when it altered contracts in 2009, according to the EU’s antitrust arm.

“We believe that our innovations and product improvements have increased choice for European consumers and promote competition,” Google said in a statement Thursday. “We’ll examine the commission’s renewed cases and provide a detailed response in the coming weeks.”

The EU has expanded its investigations into Google’s business practices since Vestager took over as the bloc’s antitrust chief in late 2014.

“This demonstrates her determination to pursue the matter vigorously and to follow the investigation wherever it leads,” said Thomas Vinje, a lawyer with Clifford Chance who represents FairSearch Europe, whose members include Expedia Inc. and Nokia Oyj.

‘High Profile’

“Additional statements of objections have proved necessary in several other complex, high-profile cases against determined opponents, including both Microsoft and Intel in the early 2000s,’’ Vinje said.

The shopping search probe, opened in 2010, alleges that Google doesn’t subject its own service to its algorithm, which ranks search results on quality and relevance to the user. It may also set a precedent for other services, such as flight, travel and mapping.

EU investigators use a software tool to check how Google displays results when people search for products. This evidence could be crucial in proving that the company restricts what users see and in showing that rivals lose web traffic as a result.

‘Thriving Market’

“The commission refers to evidence that Google harms the market; it will be important to show what this evidence is as our research shows a thriving market with record levels of investment into e-commerce in Europe,” said James Waterworth, Europe vice-president of the Computer & Communications Industry Association, which speaks for technology companies including Google.

Aside from Google antitrust scrutiny on at least three fronts -- search, advertising and Android -- the EU is also probing complaints on its use of copyrighted content from publishers. EU technology regulators have hinted at possible rules on legal liability for online platforms like Google.

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