Earlier this week European regulators brought antitrust charges against Google for allegedly promoting its own comparison shopping service, Google Shopping, at the expense of competitors. If found guilty, Google could potentially face fines of $6 billion.
The crux of the issue, according to the European Commission’s “Statement of Objections,” is that Google “prominently displays its comparison shopping service in its general search results pages, irrespective of its merits,” the Commission alleges.
The scope of the investigation is very narrowly focused on shopping and doesn’t involve travel or local search – both are issues that have raised eyebrows here in the US with critics as well as Yelp and TripAdvisor. In 2013, The US Federal Trade Commission decided not to prosecute Google for alleged antitrust violations stemming from its practice of posting snippets of reviews from Yelp and other sites. The FTC dropped its investigation after Google revised its practices by allowing rival companies to appear in the search results and also opt out of having their content scraped for snippets.
In focusing on shopping, European regulators allege that “Google’s conduct may therefore artificially divert traffic from rival comparison shopping services and hinder their ability to compete, to the detriment of consumers, as well as stifling innovation.”
Regulators add that since 2008, Google’s “systematic” favoring of its own shopping service led Google Shopping (as well as the predecessor product, Google Product Search) to grow faster than rival shopping search engines. Officials also intend to investigate whether Google has violated antitrust laws with the Android operating system.
Amit Singhal, senior vice president for Google Search, responded to the allegations with a post on the Google blog saying, “If you look at shopping – an area where we have seen a lot of complaints and where the European Commission has focused in its Statement of Objections – it’s clear that (a) there’s a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google’s shopping results have not harmed the competition.”
In that post, Singhal adds that, “In fact, people have more choice than ever before. Numerous other search engines such as Bing, Yahoo, Quora [and] DuckDuckGo,” and that there are “a ton of specialized services like Amazon, Idealo, Le Guide, Expedia or eBay.”
Google has yet to file a detailed rebuttal of the charges.
Depending on how this shakes out, we may see more US competitors go after Google in the same area. This will be interesting to watch.