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Europe Mounts Historic Challenge to Google’s Monopoly on Tech Services

Monday, October 31, 2016 7:58
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The European Commission has slapped Google with three sets of monopoly charges, starting a fight that could cost the company up to 10 percent of its annual revenue and show American firms that “there’s a bazooka in Europe that can be shot at companies” that seek to obtain dominant market positions.

The New York Times’ DealBook reports:

The cases relate to Android, Google’s mobile operating system, some of its dominant online search services and some of its advertising products.

While each response will be couched in legalese, Google’s main argument is that its business practices do not fall afoul of the region’s tough antitrust rules and that competitors can freely offer their own rival digital services to Europe’s more than 500 million consumers.

“Our search engine is designed to provide the most relevant results and most useful ads for any query,” Kent Walker, Google’s general counsel, wrote in a blog post when previously rebutting some of Europe’s antitrust charges. “Users and advertisers benefit when we do this well. So does Google.”

The company’s detractors—including small European start-ups, some local politicians and significant American firms like Oracle—disagree with Google’s optimistic outlook.

“Google has taken its best shot, but the European Commission has decided that it’s still on the right track,” said Thomas Vinje, a lawyer for FairSearch Europe, which represents those of Google’s rivals that filed complaints against the company’s perceived dominance.

“I don’t doubt Google feels like it has a strong defense. But that’s what other previously dominant companies thought, too,” he added.

DealBook continues:

Whatever happens, Google’s battle in Europe will not end overnight.

European officials must first review the company’s rebuttals, and a final decision in any of the cases is not expected until midway through 2017, at the earliest.

If found to have breached the region’s rules, Google faces fines totaling up to $7.5 billion, or 10 percent of its annual revenue, and may be forced to change how it operates in the 28-member bloc. While any antitrust fine is not expected to reach the maximum possible, the company is likely to appeal any European ruling, further lengthening the process.

Yet it is this death-by-a-thousand-cuts regulatory limbo that arguably represents the biggest headache for Google.

—Posted by Alexander Reed Kelly

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