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Google Cites Free Nature Of Search In EU Antitrust Defense

Google parent company Alphabet said the EU’s requirements amount “to a demand that we sacrifice quality to subsidize competitors.”

Google Cites Free Nature Of Search In EU Antitrust Defense
[Photo: Flickr user YunHo LEE]

Google has been the subject of a formal antitrust investigation in the European Union since April, over charges that it unfairly displays its own shopping service more prominently than competitors in search results. Google’s parent company, Alphabet, has now submitted a lengthy defense to these charges, claiming that Google cannot be charged with abusing its market dominance because its search service is free. If found guilty, Google could face a substantial fine of up to $6.6 billion.

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In a 130-page response to the accusations, Alphabet said that the EU’s demands amount “to a demand that we sacrifice quality to subsidize competitors,” reports the Wall Street Journal. The response also claims that the EU did not take into account that Google provides consumers with a free service, saying “a finding of abuse of dominance requires a ‘trading relationship’ as confirmed by consistent case law. No trading relationship exists between Google and its users.”

In an interview with the Wall Street Journal in late October, EU antitrust chief Margrethe Vestager said that “the Google case is about misuse of a dominant position, to promote yourself in a neighboring market not on your merits but because you can.”

According to Reuters, the European Commission’s charge sheet stated it “would set the fine at a level sufficient to ensure deterrence.” If found guilty, Google could be facing a hefty fine amounting to 10% of the company’s revenue, which was $66 billion in 2014.

The charges brought against Google come amid increasing legal action in Europe against U.S. tech companies, including Amazon and Facebook. In May, the European Commission opened an antitrust inquiry into the e-commerce sector, specifically targeting Amazon. Regulators in Europe are also investigating Facebook over privacy issues.

It could be more than a year before any decisions regarding the Google case are reached. Either way, any decision made could be challenged in the EU’s appeals court, a process that could take more than five years.

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