Technology

Google hits back at ‘peculiar and problematic’ EU commission demands

Internet giant has filed response to EU competition complaint

Google, which is changing its structure by establishing a new company called Alphabet, could face a fine as a result of the investigation. Photograph: Reuters

Thu Aug 27 2015 - 17:17

Google has hit back at what it called "peculiar and problematic" demands by European Union competition regulators to change the way it displays search results.

The US internet giant on Thursday filed its reply to an EU complaint that accused the company as part of a five-year- long investigation of wielding its market power to crush competition in the comparison-shopping market.

The European Commission’s patience with the company snapped in April after three settlement bids failed to satisfy critics.

EU competition commissioner Margrethe Vestager fired off a so-called statement of objections threatening fines and enforced changes to the way search results are displayed.

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The EU "seeks a peculiar and problematic remedy, requiring that Google show ads sourced and ranked by other companies within our advertising space," Kent Walker, the company's general counsel, said in a blog posting summarising Google's written response, which was due by August 31st.

“We show in our response that this would harm the quality and relevance of our results.”

Sending a competition complaint spelling out where the EU thinks Google is breaking the law pushed the investigation into new territory. If the regulator’s concerns are confirmed, the EU said Google could face a fine large enough to act as a deterrent.

Possible Penalties

Any penalty would be based on factors including revenue from Google’s AdWords services relating to clicks from European users; revenue from its price-comparison website; and revenue from product queries on its search engine, according to a version of the statement of objections earlier released to complainant.

The commission is continuing its inquiry into other concerns about Google’s search advertising, such as exclusivity requirements and “undue restrictions” on advertisers. The EU is also looking at the legality of Google copying rivals’ web content. In April, the regulator started a new investigation into Google’s Android mobile-phone software.

Bloomberg

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