Google Calls EU's Demands 'Peculiar and Problematic'

Europe's Antitrust Regulators Have Lost Patience With Internet Giant

Published on .

Most Popular

Google ridiculed as "peculiar and problematic" demands by European Union antitrust regulators to change the way it displays search results.

Credit: Krisztian Bocsi/Bloomberg

The U.S. Internet giant on Thursday filed its reply to an EU complaint that accused the company as part of a five-year-long probe of wielding its market power to quell competition in the comparison-shopping market.

The European Commission's patience with the company snapped in April after three settlement bids failed to satisfy critics. EU Competition Commissioner Margrethe Vestager fired off a so-called statement of objections threatening fines and enforced changes to the way search results are displayed.

The EU "seeks a peculiar and problematic remedy, requiring that Google show ads sourced and ranked by other companies within our advertising space," Kent Walker, the company's general counsel, said in a blog posting summarizing Google's written response, which was due by Aug. 31. "We show in our response that this would harm the quality and relevance of our results."

Google's arguments were countered by Thomas Vinje, a lawyer with Clifford Chance who represents FairSearch Europe, whose members include Microsoft Corp., Expedia and Nokia Oyj.

"Google is perfectly capable of implementing a remedy that provides equal treatment both to its own product-comparison service and to those of others," Mr. Vinje said in a statement.

That would be a "future-proof" solution after Google "decimated competition" by giving preference to its own product-comparison service in its search results, he said.

The EU has been probing allegations since 2010 that Google's search page isn't fair when people seek services online. Sending an antitrust complaint spelling out where the EU thinks Google is breaking the law pushed the investigation into new territory.

Google presented traffic analysis to rebut allegations in the statement of objections that it prevented shopping aggregators from reaching consumers, Mr. Walker said. Additionally, the company cited economic data and rival statements showing that product search is "robustly competitive."

"We show why the [statement of objections] is incorrect in failing to consider the impact of major shopping services like Amazon and eBay, who are the largest players in this space," Mr. Walker said.

The commission "will carefully consider Google's response before taking any decision on how to proceed," Ricardo Cardoso, a spokesman for the EU regulator, said in a statement.

If the regulator's concerns are confirmed, the EU said Google could face a fine large enough to act as a deterrent.

Any penalty would be based on factors including revenue from Google's AdWords services relating to clicks from European users; revenue from its price-comparison website; and revenue from product queries on its search engine, according to a version of the statement of objections released to complainants and seen in June by Bloomberg.

The commission is continuing its probe into other concerns about Google's search advertising, such as exclusivity requirements and "undue restrictions" on advertisers. The EU is also looking at the legality of Google copying rivals' Web content. In April, the regulator started a new investigation into Google's Android mobile-phone software.

--Bloomberg News

In this article: