The European Union
accused Google Inc on Wednesday of cheating competitors by distorting
Internet search results to favour its shopping service, and launched
another antitrust investigation into its Android mobile operating
system.
Competition Commissioner Margrethe Vestager said the US tech giant,
which dominates Internet search engines worldwide, had been sent a
Statement of Objections - effectively a charge sheet - to which it can
respond. She also said other probes into Google's business practices
would continue.
"I am concerned that the company has given an
unfair advantage to its own comparison shopping service, in breach of EU
antitrust rules," she said. "If the investigation confirmed our
concerns, Google would have to face the legal consequences and change
the way it does business in Europe."
The Commission, whose control
of antitrust matters across the wealthy 28-nation bloc gives it a major
say in the fate of global corporations, can fine firms up to 10 percent
of their annual sales, in Google's case up to $6.6 billion.
If it
finds that companies are abusing a dominant market position, the EU
regulator can also demand sweeping changes to their business practices,
as it did with US software giant Microsoft in 2004 and chip-maker Intel
in 2009. Its record antitrust fine was 1.09 billion euros on Intel.
Asked
whether she was ready to go as far as fining Google, Vestager told a
news conference: "It is very important that every road is open - first
when it comes to commitments but also when it comes to the other road,
at the end of which is a fine."
Google now had an opportunity to
explain itself, she said, and the case might be settled by the company
making further commitments to change its products.
Of the formal
investigation into Android, used on smart phones and tablets, Vestager
said: "I want to make sure the markets in this area can flourish without
anticompetitive constraints imposed by any company."
In its
first reaction, the Mountain View, California-based company said in a
blog post that it strongly disagreed with the EU's statement of
objections and would make the case that its products have fostered
competition and benefited consumers.
"Android has been a key
player in spurring this competition and choice, lowering prices and
increasing choice for everyone (there are over 18,000 different devices
available today)," it said of its free operating system for mobile
devices.
Vestager, a Danish liberal who took over the politically
charged EU competition policy dossier in November, announced the moves
on the eve of a high-profile visit to the United States. Her findings
following nearly five years of investigation and abortive efforts by her
Spanish predecessor, Joaquin Almunia, to strike a deal with Google.
The
focus on the ranking of searches for shopping sites - Google has its
own service called Google Shopping - did not address all complaints
lodged with the Commission by competitors, large and small, in Europe
and the United States, which say Google has hurt their business.
Vestager
stressed her antitrust staff would continue to investigate other areas
of concern, including alleged "web scraping" to copy rivals' content,
and restrictive practices on advertising.
She stressed the EU regulator did not seek to change Google's screen design nor the mathematical algorithms it uses.
Google
initially has 10 weeks to respond to the charges and can demand a
hearing. A final resolution - quite possibly involving court action if
Google does not choose to settle - is likely to take many months and
probably years.