Yahoo Finance Google accused of search abuse by EU
Google is Microsoft's heir apparent to European antitrust ire. After a four-year investigation, the European Union formally filed charges against Google (GOOGL) for violating antitrust laws.
If the EU successfully proves Google has engaged in anticompetitive behavior, such as biased searches, the tech giant could face fines of $6 billion, or approximately 10% of annual revenue.
Margrethe Vestager, the EU's competition commissioner, notes that Google’s dominance in Europe exacerbates the problem. Currently, Google accounts for more than 90% of EU Internet searches, compared with almost 70% in the U.S.
The EU claims that Google gives favorable treatment to its ‘Google Shopping’ application, and diverts traffic away from rival comparison shopping services.
"In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” Vestager said, adding that Google may need to “change the way it does business in Europe."
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This case is poised to be the largest competition battle for EU regulators since they pursued Microsoft (MSFT) a decade ago. Microsoft paid more than $2 billion in fines over the course of 10 years.
Yahoo Finance’s Aaron Task thinks that Google is following in Microsoft's footsteps.
“[This is] not unlike what Microsoft was accused to have done a decade plus ago with bundling Internet Explorer with the operating system," he says. "It's just so ironic that Google's slogan is 'Don't be Evil,' which was clearly a knock on Microsoft, and yet here they are being accused of very similar behavior.”
In a Google internal memo, obtained by Re/code, the company notes that they have a "very strong case" and describes the charges as "disappointing news, especially for the search team that has worked so hard to create a great experience for our users over the last 16 years."
Task adds that the case probably won't affect Google's business.
"Six billion dollars is a lot of money for you and me, but for Google they could pay that with loose change they find in the couches at their headquarters," he says. "So it's a symbolic and a serious issue for them as well, but I don't know that it's really going to have a long-lasting impact on their business."
