Europe to accuse Google of antitrust violations

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Europe’s top antitrust czar on Wednesday is expected to formally accuse Google of violating antitrust rules by directing users of its Web search to the company’s own products.

Margrethe Vestager, the European commissioner overseeing antitrust issues, will make the announcement shortly before she boards a plane to speak to antitrust lawyers gathered in Washington, according to a person familiar with the matter.

The move, first reported by Financial Times, significantly ramps up an investigation that has spanned five years, to the frustration of parties on both sides.

Now, with a formal statement of objections to Google’s practices, the details of the complaint will come into sharper focus. Google could be forced to pay hefty fines that could theoretically total $6 billion and be forced to change how it conducts business overseas.

That is still a long way off, too. A formal finding against Google in this complex case could take at least another year, analysts said. To start, Google will be given 10 weeks to respond to the allegations.

 

But this new move by European regulators is likely to increase pressure on both sides to negotiate a settlement.

Google, in some ways, has become a victim of its own astounding success. While it is used by 67 percent of online Americans, the company holds even greater dominance in online search in Europe, reaching 90 percent in many markets. That has caused smaller rivals, including Microsoft andYelp, to accuse Google of using its market power to support its own products.

When you type a search term into Google, “you’re steered toward services provided by Google,” said Damien Geradin, an antitrust professor at George Mason University who also runs a law firm in Brussels. “That makes it very difficult for competitors.”

Beyond search, Europe’s antitrust probe has also investigated whether Google has aggregated content from rival companies in search results and made it hard for marketers to easily move their ads to rival services.

Google did not respond to requests for comment Tuesday night.

The move by Europe comes amid broader scrutiny of U.S. tech companies.

European officials have bristled at the extent of data collection by those firms. Europe’s highest court last year forced Google and other tech companies to delete links to embarrassing personal information from search engines.

The documents leaked by former National Security Agency contractor Edward Snowden and reports that U.S. spies may have been monitoring allies in Europe — including German Chancellor Angela Merkel via her cellphone — further stoked tensions between Europe and Silicon Valley.

But Europe’s aggressive stance has provoked its own backlash in the United States. In February, President Obama said that European regulators are trying to set up “some roadblocks for our companies to operate effectively there.”

“We have owned the Internet,” Obama said in an interview with Recode. “Our companies have created it, expanded it, perfected it, in ways they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is designed to carve out their commercial interests.”

In 2013, the U.S. Federal Trade Commission said it had found no evidence that Google used unfair tactics to thwart rivals, much to the frustration of the company’s competitors.

Vestager took over as the European Union’s antitrust head in September, assuming the role from Joaquín Almunia, who had pushed to settle with Google ahead of filing charges, to no avail.

To some, Vestager was left with few options, and filing the statement of objections was seen as the best way to head the case toward some kind of resolution.

“I think it’s way overdue,” said Erik Clemons, a professor at the University of Pennsylvania’s Wharton School of Business and a longtime Google critic.

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