Google Antitrust Scrutiny Mounts in Europe
The European Union’s antitrust chief used to say he’d decide on the future of his probe into Google Inc. (GOOG) by April. Joaquin Almunia, who can fine companies as much as 10 percent of annual sales, now says he’s not in so much of a hurry.
There aren’t any “fixed deadlines” to assess allegations that the world’s largest search-engine operator discriminated against rivals in its search results, he said on May 4.
Almunia may consider a flurry of last-minute complaints and must appoint a new head of the EU team investigating Google as he prepares to reach initial conclusions on whether it broke antitrust rules. The U.S. Federal Trade Commission and antitrust agencies in Argentina and South Korea are also scrutinizing the Mountain View, California-based company.
“With complainants continuing to appear, Google defending itself madly and no one competitor or third party about to disappear, it’s not at all surprising that the European Commission is keeping its powder dry for now,” said Matthew Hall, a lawyer at McGuireWoods LLP in Brussels. “A few months here or there makes no difference.”
Google’s “size and success rightly generate scrutiny, which is why we’ve worked hard to explain how our business works, cooperating with the European Commission since this investigation began,” said Al Verney, a Brussels-based spokesman for the company. “Because there’s always room for improvement, we’re happy to discuss any concerns the commission might have.”
Four additional sets of allegations were filed with the EU in March and April, Google said in a regulatory filing last month. These came from Odigeo, a Barcelona, Spain-based travel company owned by AXA Private Equity and Permira Advisers LLP, online travel websites Expedia Inc. (EXPE) and TripAdvisor Inc. (TRIP), as well as Streetmap, a British mapping service.
The new objections are unlikely to “bring anything new to the table,” said Gabriele Accardo, a lawyer at Dandria Studio Legale in Rome. A bigger issue for the investigation, according to Accardo, is its complexity and the emergence of new channels such as Facebook Inc. and other social media services.
The latest complaints to the EU come on top of ones from companies including Microsoft Corp., the world’s biggest software maker, that Google’s search hampers rivals by promoting its own services in search results above rival offerings.
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EU regulators in 2010 started investigating claims that Google discriminated against other services and stopped some websites from accepting rival ads.
The commission’s investigation will also lose Per Hellstroem, the head of the EU antitrust unit on Internet issues and a veteran of the regulator’s legal clashes with two other U.S. technology giants, Microsoft (MSFT) and Intel Corp.
Intel was ordered to pay 1.06 billion euros ($1.4 billion) by the EU in 2009, the regulator’s biggest ever antitrust fine and more than double the 497 million-euro penalty against Microsoft in 2004.
The Swede will leave the investigators’ team in June to join a unit handling energy mergers, according to Antoine Colombani, a spokesman for the regulator.
Hellstroem’s replacement hasn’t yet been appointed and Colombani didn’t specify the reasons for the move. Senior staff at the commission are required to regularly move between posts.
The Google dossier may also be delayed slightly if “the new ‘tech guy’ needs to be brought up to speed,” said Accardo.
Almunia has said regulators need to assess whether Google can hold an entrenched position “in a market that is changing at lightning speed” and whether it is a “gate keeper” that can influence Internet users’ behavior. The EU also needs to consider Google’s “two-sided platform where advertisers’ fees finance a service that users do not have to pay for.”
While Microsoft and partner Yahoo! Inc. (YHOO) have about a quarter of the U.S. Web-search market, Google has almost 95 percent of the traffic in Europe, Microsoft said in a blog post last year, citing data from regulators.
“It’s hard to assess dominance in such fast-moving markets,” Accardo said. “Any decision in this case will shape the future approach in Europe and the European Commission cannot afford to make a mistake.”
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