Google Faces EU Antitrust Fine -- WSJ
June 17 2017 - 3:02AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS -- European Union regulators in the coming weeks are
set to hit Alphabet Inc.'s Google with a record fine for
manipulating its search results to favor its own
comparison-shopping service, according to people familiar with the
matter.
The antitrust penalty against Google is expected to top the EU's
previous record fine levied on a company for allegedly abusing its
market position: EUR1.06 billion (about $1.2 billion) against Intel
Corp. in 2009.
Under EU rules, the fine could reach as high as 10% of the
company's annual revenue, which was $90.27 billion last year.
Google faces additional, and perhaps more painful, consequences
from the European Commission's action, including possible changes
not only to its handling of its shopping service but other services
as well. The antitrust watchdog's decision could also embolden
private litigants to seek compensation for damages at national
courts.
The EU is likely to instruct Google to put its comparison
shopping service on equal footing with those of its competitors,
such as Foundem.co.uk and Kelkoo.com Ltd. Such companies rely on
traffic coming to their site from search engines like Google's, and
the equal-treatment requirement could lead to greater visibility
for rival services on the tech giant's platform.
The EU has been in talks with some of the complainants about how
Google should change its search results, though the precise remedy
would likely be hammered out only after a decision is
announced.
Google general counsel Kent Walker has previously argued that
forcing the company to place competitors' product ads in its search
results "would just subsidize sites that have become less useful
for consumers."
The regulator's move would come as welcome relief to a range of
web companies -- large and small, European and American -- that
have been urging the EU for years to take antitrust action against
Google. News Corp, owner of The Wall Street Journal, has formally
complained to the EU about Google's handling of news articles on
its search service.
The EU watchdog opened its investigation into Google's practices
in 2010. The former competition commissioner, Joaquín Almunia,
subsequently drafted various settlements with Google over more than
two years of talks, but the steps offered by Google were rejected
in 2014 following criticism from competitors, as well as from
politicians in Germany and France.
That led the way for Mr. Almunia's successor, current EU
antitrust chief Margrethe Vestager, to file formal accusations
against Google -- the first regulator in the world to do so -- by
issuing a so-called statement of objections in the comparison
shopping case in April 2015.
An EU decision against Google would set the regulator apart from
authorities in the U.S.; they closed their own investigation into
Google's search practices in 2013 after the company agreed to
voluntary changes. The divergence could reflect in part Google's
greater presence in search on the continent, where it holds about
90% of the market.
Google can appeal any decision by the European Commission in the
shopping case to the bloc's top courts in Luxembourg, dragging out
the legal battle as a final ruling could take years.
A decision in the case could set precedents for how the U.S.
technology company operates in other domains, including with its
local and travel services -- areas the EU has also been
investigating. Meanwhile, EU antitrust cases against Google over
its Android mobile-operating service and its advertising service
Adsense remain open.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
June 17, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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