EU formally charges Google for competition violations in web search

In the first ever formal antitrust charge brought against Google, the European Commission on Wednesday accused the California company of breaking European Union competition rules by favouring its own products and services on its online search results.

This, the EC said, was an abuse of its dominant position in the markets for general internet search services in Europe.

If the charges are proven, Google could in theory face fines of up to $6.6bn.

The Commission, which opened its investigation in November 2010, said Google was "systematically favouring its own comparison shopping product in its general search results pages", which infringes EU antitrust rules because it "stifles competition and harms consumers".

"Google should treat its own comparison shopping service and those of rivals in the same way," the Commission said.

After sending a letter addressing its objections to Google, EU competition chief Margrethe Vestager said Google now had the opportunity to convince the Commission of its side of the argument.

"However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe," she said.

In response to European regulators, Google said in a blog "...we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead."

A separate antitrust investigation now also opened into Google's mobile operating systems, apps and services, concerning conduct around its Android mobile operating system.

"Smartphones, tablets and similar devices play an increasing role in many people's daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company"

The investigation will examine whether the company entered into anti-competitive agreements or abused a possible dominant position in the field of operating systems, applications and services for smart mobile devices.

Vestager said: "Smartphones, tablets and similar devices play an increasing role in many people's daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company."

European Union antitrust chief Margrethe Vestager is to visit the United States to discuss the matter, following a consultation with European Commission President Jean-Claude Juncker.

The full list of the EC's preliminary conclusions included that Google has systematically and prominently displayed its comparison shopping service since 2008, that Google does not apply to its own comparison shopping service the system of penalties applied to other comparison shopping services.

The investigation noted that Google's Froogle comparison shopping service did not benefit from any favourable treatment and performed poorly, while replacement comparison shopping services Google Product Search and Google Shopping have both experienced higher rates of growth, to the detriment of rival comparison shopping services, as a result of Google's alleged systematic favouring policies.

"Google's conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google's product."