The European Commission’s charges against Google’s shopping service mark a dramatic escalation of an inquiry into the company’s search business that started in 2010. Brussels will have to decide whether the company abused its market dominance to favour its own retail services over those of its competitors unfairly.
Google, which now faces a large fine, denies any wrongdoing.
How dominant is Google in the EU? With a share of more than 90 per cent in web searches, the US search engine commands even more of the market in the EU than in the US. Still, Google argues the 90 per cent figure is misleading, saying the market should be measured differently to reflect that competition in sectors such as online shopping is far more open. And is being dominant illegal? No, but dominance requires you to take special responsibility not to distort competition in the market by, for example, preventing small businesses from building a presence.
What are the exact concerns in Google's case? For now, the focus is fairly narrow. The concern raised is that Google's shopping searches are biased and prioritise its own services.
So what does the EU want? Brussels says it does not want a solution based on temporary fixes to the page layout or the algorithm. Instead, it is looking to agree a "future-proof" solution based on broad principles of fair search.
How big can a fine be? Theoretically, this could be as much as 10 per cent of the previous financial year's turnover, which was $66 billion in 2014. But lawyers reckon it is very unlikely that Brussels would demand anywhere near that figure.
What happens next? Google has 10 weeks to respond. One of the potential big set pieces of an antitrust inquiry is a hearing in which arguments can be aired from all sides. With up to 20 complainants in this case, a hearing could take days. Who are the complainants? They range from the likes of Expedia, an online travel service, and Streetmap, a mapping company, through to Microsoft and French and German publishers. Is this only about shopping? Not necessarily. If the commission establishes wrongdoing, the shopping case could be a precedent for the way Google handles other businesses such as travel and mapping. How political is this going to be? The European Commission says that it is acting entirely based on EU rules intended to protect European consumers and businesses. However, we can expect transatlantic tensions over this case, with the US growing increasingly tense about a perceived German-led attempt to protect Europe's technology industry. – Copyright The Financial Times Limited 2015
