EU accuses Google of hurting consumers, competitors

Updated: 2015-04-16 10:36


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EU accuses Google of hurting consumers, competitors

European Competition Commissioner Margrethe Vestager addresses a news conference at the EU Commission headquarters in Brussels, April 15, 2015. Google Inc said on Wednesday it strongly disagreed with the European Commission which accused the US company of distorting Internet searches in its favor and launched an antitrust probe into its mobile operating system Android. [Photo/Agencies]

BRUSSELS - The European Union accused Google Inc on Wednesday of cheating consumers and competitors by distorting Web search results to favor its own shopping service, after a five-year investigation that could change the rules for business online.

It also started another antitrust investigation into the Android mobile operating system, a key element in Google's strategy to maintain revenues from online advertizing as people switch from Web browser searches to smartphone apps.

EU Competition Commissioner Margrethe Vestager said the US company, which dominates Internet search engine markets worldwide, had been sent a Statement of Objections - effectively a charge sheet - to which it has 10 weeks to respond.

Investigations into Google's business practices in other areas would continue. The shopping case, on which the EU has had the most complaints dating back the longest time, could potentially set a precedent for concerns over Google's search products for hotels, flights and other services.

Vestager, a Dane who took over the politically charged case in November, announced the moves on the eve of a high-profile visit to the United States. Her findings follow nearly five years of investigation and abortive efforts by her Spanish predecessor, Joaquin Almunia, to strike deals with Google.

"I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules," she said. Google could face fines, she warned, if the Commission proves its case that it has used its "near monopoly" in Europe to push Google Shopping ahead of rivals for the past seven years.

Google rejected the charges. Its shares closed up 0.40 percent on Wednesday after earlier losing 1 percent.

Meanwhile, Google's rivals are pushing US antitrust enforcers to investigate the use of Android, two people with knowledge of the matter said.

Analysts said the EU charges were unlikely to hurt Google's evaluation because it reflected the regulatory risk.

If recent history of EU probes into tech companies is an indicator, however, Google shares may have trouble moving forward until the issue is resolved.

In its first reaction, the Mountain View, California-based company said in a blog post that it strongly disagreed with the EU's statement of objections and would make the case that its products have fostered competition and benefited consumers.

"Android has been a key player in spurring this competition and choice, lowering prices and increasing choice for everyone (there are over 18,000 different devices available today)," it said of its free operating system for mobile devices.

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