EU extends Google competition probe to include search ad service

Google seems to have violated EU competition rules with restrictive terms for websites using its search advertisement service, the European Commission said Thursday, ratcheting up proceedings against the US internet giant.

The findings put Google at risk of hefty fines if it refuses to cooperate with the European Union and change its procedures. It is the third time the commission has gone after the US internet giant for suspected competition violations.

The EU's executive has informed Google of concerns that it has "hindered competition by limiting the ability of its competitors to place search adverts on third-party websites," EU Competition Commissioner Margrethe Vestager said in a statement.

This "stifles consumer choice and innovation," she added. The company said the opposite was true.

"We believe that our innovations and product improvements have increased choice for European consumers and promote competition," a Google spokesperson said, adding that the firm would respond fully in the coming weeks.

The commission is taking issue with an exclusivity clause Google had imposed on websites using its AdSense for Search advertising service, as well as requirements that such websites take a minimum number of adverts from Google and position these in its most prominent spaces, without being flanked by rival searches.

Google now has 10 weeks to respond to the commission's so-called statement of objections. The commission acknowledged that Google had recently granted third-party websites more freedom to display competing search ads.

The EU's competition watchdog also ratcheted up concerns formalized in April 2015 regarding Google's comparison shopping service, Google Shopping, which it believes hinders competition by appearing at the top of Google search results.

The internet giant defended itself against the complaint in August, notably arguing that online retailers such as Amazon and eBay must also be taken into account as rivals in the shopping comparison business.

But the commission disagreed and found that, even if this were the case, Google is still unfairly abusing its dominant position. It also said that further investigations had produced more evidence against Google.

The commission issued a new statement of objections, reinforcing the accusations and giving Google eight weeks to respond.

Google has a 90-per-cent share of the European market for internet search services and 80 per cent of the market for placing search advertising on third-party websites, according to the commission.

"Dominance is not a problem under EU law. You can be big, ... however it is illegal to abuse a powerful market position by restricting competition," Vestager said.

Google's business has been under EU scrutiny for years, after competitors complained about its supremacy in the internet search-engine market.

In April, the commission formalized objections relating to Google's operating system for smartphones and tablets, known as Android. The deadline for it to respond to the findings was extended this week until September 7.

Investigations are also underway into concerns that Google uses content from other websites, such as newspaper articles, in its specialized services without consent.

Last update: Thu, 14/07/2016 - 17:07

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