Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Google search probe could lead to others: Vestager, (Apr 17, 2015)

By John Curran,TRDaily

In elaborating on two major actions by the EC concerning Google, Inc.’s business practices, European Commissioner for Competition Margrethe Vestager offered praise for the popularity of the company’s services, but warned that the provider of a “dominant” service will draw increased scrutiny from European regulators if that position is perceived as being abused.

Vestager also indicated in remarks delivered at the EU Delegation office in Washington that the outcome of the EC’s probe into Google’s search services “could potentially” lead the EU to look into whether Google similarly favors its own services in other areas like hotels, travel, and airline flights.

Beyond those issues, she said that the EU continues to investigate other Google practices, including web scraping, but offered no insight into how far those probes might proceed.

Earlier this week, the European Commission sent a “statement of objections” to Google, Inc., alleging that the company abused its dominant position in the search market by favoring its own comparison shopping product.

The EC also separately launched formal proceedings to investigate the company's conduct regarding its Android mobile operating systems, specifically to "assess if, by entering into anticompetitive agreements and/or by abusing a possible dominant position, Google has illegally hindered the development and market access of rival mobile operating systems, mobile communication applications, and services in the European Economic Area."

The Commission said it will examine whether Google has "illegally hindered the development and market access of rival mobile applications or services by requiring or incentivising smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services," and whether Google has “has prevented smartphone and tablet manufacturers who wish to install Google's applications and services on some of their Android devices from developing and marketing modified and potentially competing versions of Android.”

Speaking yesterday in Washington, D.C., Vestager acknowledged Google’s businesses successes, even as she recapped the EU’s case against the company. “It’s a good company . . . It’s a successful company because they have good products,” she said. However, Google holds a 90 percent market position in the European search market, and “dominant companies have a responsibility not to abuse their positions.”

Elaborating on the search complaint, Vestager said that Google has “systematically” arranged for its own businesses to turn up more prominently in searches than those of other companies. “Whether it is the relevant answer to the query or not . . . it is always the dominant position when you do a search from your computer.” This practice, she said, has “artificially boosted” Google’s market share and deprived consumers of search results. She said it was for “consumers to decide” what services they want, but that consumer intent is frustrated “if they don’t see the other search results.”

Asked whether the ordering of search results was so important because “competition is one click away,” Commissioner Vestager replied, “that’s a theory, but look at your own behavior, when you are there you are there.”

“You are not allowed to mis-use dominant positions – that is the heart of the case,” she said.

Regarding the EC’s probe into Google’s Android business, she said it was “still way too early to give a timeline” as to how that investigation will proceed. She said the EU will work with Google and European market participants as part of the investigation.

Asked about her decision to pursue action against Google instead of engaging in additional settlement talks that her EU predecessor had been undertaking with the company, the Commissioner said that the settlement talks “did not move very fast,” and that she hoped to arrive at quicker conclusion, especially for a matter that was several years old. “This may be a more promising way going forward,” she said, rather than let the matter “drag on and on.”

News: Antitrust