European Union Accuses Google of Favoring Own Products in Search

Personal Finance
European Union Accuses Google of Antitrust

Google has unfairly used its dominant positions in online search to favor its own shopping products in search results, the European Union claims.

The commission sent a statement of objections to Google on Wednesday, saying that the practice appears to violate EU antitrust laws.

“Google now has the opportunity to convince the Commission to the contrary,” Margrethe Vestager, the Union’s commissioner in charge of competition policies, said in a written statement. “However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”

The European Commission, the executive body of the EU, announced it has launched a similar antitrust investigation into Google’s Android mobile operating system. It will focus on whether Google, again, uses its dominant position to force the makers of devices that run the system into anti-competitive agreements.

In its own statement, Google denied that its position as the hands-down leader in online search has squashed competition, in Europe or elsewhere.

“While Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark,” Amit Singhal, Google’s vice president in charge of search, wrote in a blog post.

Singhal noted that in recent years, companies like Facebook, Pinterest and Amazon have been investing in their own search services, and new search engines like Quixey and DuckDuckGo have come online. He also noted the 2014 public offering of Zalando, a German shopping site that became one of Europe’s biggest-ever tech IPOs.

“Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player,” he wrote. “Yet that is exactly what’s happening in our world.”

The EU complaint focuses primarily on comparison shopping.

It says an investigation opened in 2010 suggests that Google gives “systematic favourable treatment” to its own product, Google Shopping, in its search results by showing it more prominently than other services discovered by Google’s search algorithm.

“The Commission is concerned that users do not necessarily see the most relevant results in response to queries,” the complaint states. “This is to the detriment of consumers, and stifles innovation.”

It says the commission’s “preliminary view” is that Google should treat its own shopping tool the same as all others in its search algorithm.

Google now has 10 weeks to respond to the allegations and seek a formal hearing on them.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.


Image via iStock.