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Google Rejects European Commission’s Formal Charges

Friday, November 4, 2016 7:10
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(Before It's News)

Google has formally rejected the European Commission’s assertions that it is violating European anti-trust laws, potentially leaving itself wide open to some sizeable fines.

The Commission had accused Google of suppressing competition and hurting consumers due to the “unfair advantage” it gives its own comparison shopping service.

so-shopping_10_28_v2_1The original accusation came last year in a formal statement of objections (SO) that Google was then to respond to. Google general counsel Kent Walker said the SO was “wrong as a matter of fact, law, and economics.”

The statement of objections “claimed that when we offered improved shopping ads to our users and advertisers, we were “favouring” our own services — and that this was bad for a handful of price comparison aggregators who claimed to have lost clicks from Google. But it failed to take into account the competitive significance of companies like Amazon and the broader dynamics of online shopping,” Walker said in a blog post.

“Our response demonstrated that online shopping is robustly competitive, with lots of evidence supporting the common-sense conclusion that Google and many other websites are chasing Amazon, by far the largest player on the field. We then showed that our improved ads were helpful to users and merchants. We never compromised the quality or relevance of the information we displayed. On the contrary, we improved it. That isn’t “favouring” — that’s listening to our customers.”

The Commission then sent Google a revised version of its original document called a supplementary statement of objections to counter Google’s claims, saying Amazon can’t be considered a rival to price comparison aggregator sites because it sometimes paid those sites for traffic.

Google’s response, which was filed Thursday, attempted to debunk the Commission’s assertions.

so_blog_illustrations-italics_3_1-width-1000“While there’s no indication that the Commission ever surveyed consumers, the evidence is clear:  consumers can and do click anywhere and navigate to any site they choose,” Walker said. “In the year-and-a-half since the Commission’s original filing, we’ve seen even more data confirming this. For example, a recent study shows that for many German online shoppers, Amazon is the first port of call on the Web. A third of online consumers first go to Amazon, irrespective of where they ultimately make their purchases. Only 14.3 percent go first to Google, and only 6.7 percent to price comparison sites.”

Walker, whose entire blog post can be read here, went on to say that he is certain the analysis Google has provided to the European Commission will prove its product innovations “have benefited consumers and merchants, and expanded competition.”

European Competition Commissioner Margrethe Vestager has said she would consider the company’s arguments “carefully” before deciding if she will move ahead with the case. If the investigation concludes Google did indeed break EU anti-trust rules, then the Commission “has a duty to act to protect European consumers and fair competition on European markets,” she said.

“Google has come up with many innovative products that have made a difference to our lives,” Vestager added. “But that doesn’t give Google the right to deny other companies the chance to compete and innovate. Today, we have further strengthened our case that Google has unduly favoured its own comparison shopping service in its general search result pages. It means consumers may not see the most relevant results to their search queries. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third party websites, which stifles consumer choice and innovation.”

If Google is found guilty, it will be looking at fines of as much as $7.4 billion in each case, or as much as 10 percent of its annual sales.


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Jennifer Cowan is the Managing Editor for SiteProNews.

The post Google Rejects European Commission’s Formal Charges appeared first on SiteProNews.

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