Europe to Pull Trigger on Google Antitrust Charges - facing fines of over $6 billion

Europe to Pull Trigger on Google Antitrust Charges

Case would be EU’s biggest competition battle since pursuit of Microsoft a decade ago

By Valentina Pop And Tom Fairless

Updated April 14, 2015 7:34 p.m. ET
 
BRUSSELS—Europe’s antitrust regulator plans to file formal charges against Google Inc.  for violating antitrust laws, a person familiar with the matter said Tuesday, stepping up a five-year investigation likely to become the biggest competition battle here since the European Union’s pursuit of Microsoft Corp. a decade ago.

EU antitrust chief Margrethe Vestager made the decision Tuesday in agreement with European Commission President Jean-Claude Juncker, this person said. She is expected to inform her fellow EU commissioners at a meeting Wednesday, said three EU officials.

The European charges will focus on complaints that Google uses its dominant Internet search engine to favor its own services over those of rivals, people familiar with the situation said. Rivals say Google search results in areas like travel, shopping and maps increasingly favor Google’s own offerings, rather than links to similar online services run by rivals.

A Google spokesman didn’t respond to requests for comment Tuesday. In the past, Google has denied breaking antitrust laws and argues that consumers benefit from more direct answers to online queries, including from its own services.

The charges would be “very bad news” for Google, said Ioannis Lianos, a professor of global competition law at University College London.

The move opens the possibility of Google facing fines of over $6 billion. Google also could face injunctions that require modifying contracts, Mr. Lianos said. Checks on its behavior could extend beyond search into related markets, which would “really put a squeeze on how they can run their business,” he said.

The European Commission has highlighted four main areas of concern in its investigation: potential bias in Google’s search results, scraping content from rival websites, agreements with advertisers that may exclude rival search-advertising services and contracts that limit marketers from using other platforms.

The EU has also been running a second line of inquiry into Google’s business practices relating to its Android mobile-operating system. According to another person familiar with the investigation, the commission is also planning to turn this into a formal investigation.

Search bias has been central to the probe because Google controls over 90% of Europe’s general search market.

“If you are dominant in Europe, you are not allowed to tie and bundle your other services to that dominant business to the detriment of your competitors,” said Michael Weber, a director at online mapping company Hot-Map.com, which has complained to the EU about Google’s practices. “But that’s exactly what Google’s doing.”

News Corp, publisher of The Wall Street Journal, on Tuesday filed a formal complaint with the commission regarding Google’s competition practices, a spokesman said. He declined to disclose further details.

After the EU complaint is issued, Google would have about three months to respond, and could request a hearing to better explain its case to the commission. If the EU then decided to press ahead, a final decision could be expected by the end of the year, Mr. Lianos said.

Google could then appeal to the EU’s appeals courts in Luxembourg, a process that could take years. The courts in Luxembourg have traditionally been sympathetic to the commission.

The EU also could impose injunctions requiring Google to stop any behavior deemed anticompetitive.

—Alistair Barr contributed to this article.

Write to Valentina Pop at valentina.pop@wsj.com and Tom Fairless at tom.fairless@wsj.com



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