The European Union has a fresh target in its antitrust battle with Google: the company's lucrative ad business. This morning, EU competition commissioner Margrethe Vestager filed a statement of objections accusing the US company of abusing its control ...
Google has been hit with a brace of fresh charges in the European Commission's long-running antitrust case against the search and ad giant.
Brussels' competition chief Margrethe Vestager confirmed that her office would "reinforce the first Google case on search" relating to price comparison, by issuingâ€”as rumoured earlier this weekâ€”a supplementary statement of objections against the company.
Google also faces another round of charges against its dominant business practices in Europe relating to its ad placements on its own sites, and that of third party websites. The commission said, in a preliminary decision, that Google's AdSense had breached EU antitrust rules in relation to its exclusivity contract with a limited number of the largest third party websitesâ€”so-called direct partners.
"Dominance is not a problem under EU law, you can be big. However it is illegal to abuse a powerful market position," Vestager said.
The EC said in a statement:
The commission takes the preliminary view that the practices, which have been in place for ten years, hinder competition on this commercially important market. The statement of objections takes issue with the exclusivity practice as from 2006. This was gradually replaced from 2009 in most contracts by the requirement of premium placement/minimum ads and the right for Google to authorise competing ads.
The commission is concerned that the practices have artificially reduced choice and stifled innovation in the market throughout the period. They have artificially reduced the opportunities for Google's competitors on this commercially important market, and therefore the ability of third party websites to invest in providing consumers with choice and innovative services.
The commission takes note that, in the context of its antitrust proceedings, Google has recently decided to change the conditions in its AdSense contracts with Direct Partners to give them more freedom to display competing search ads. The Commission will closely monitor these changes in Google's practices to assess how they will impact the market.
Google has been given 10 weeks to respond to the latest statement of objections from the commission against its ad business.
Vestager added that her team had carried out a fresh investigation into Google's business tactics on price comparison and found that its preliminary conclusion in that case had been reinforced. Google has been given eight weeks to respond to the supplementary statement of objections.
The EC also dismissed Google's claim that comparison shopping services should be considered alongside the likes of Amazon and eBay.
The commission continues to consider that comparison shopping services and merchant platforms belong to separate markets. In any event, today's supplementary statement of objections finds that even if merchant platforms are included in the market affected by Google's practices, comparison shopping services are a significant part of that market and Google's conduct has weakened or even marginalised competition from its closest rivals.
However, UK vertical search price comparison site Foundemâ€”the original complainant in the caseâ€”warned that any further delay in issuing a prohibition decision against Google could crush competition in that market.
"While we understand and respect the commissionâ€™s thorough, step-by-step approach, Googleâ€™s unprecedented power and proven track record of exploiting every delay to further extend and entrench its immensely harmful anti-competitive practices creates a particularly strong imperative to act swiftly in this case, said Foundem co-founder Shivaun Raff.
Google said: â€œWe believe that our innovations and product improvements have increased choice for European consumers and promote competition. Weâ€™ll examine the commissionâ€™s renewed cases and provide a detailed response in the coming weeks.â€
Meanwhile, Google has been given more time to respond to a separate charge sheet issued against the company's Android operating system. Vestager now expects an answer from Google in the autumn.
This post originated on Ars Technica UK
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