Google rejects EU’s search abuse complaint

Google has rejected the EU’s objections to how it displays shopping links in its search results as “wrong as a matter of fact, law and economics”.

Europe’s competition commissioner accused the firm of abusing its dominance in search in April.

Her intervention followed complaints from price comparison services that they were being unfairly disadvantaged by the prominence of Google’s own ads.

The US firm has now filed its formal response.

Google says its shopping service – which appears as a box of images and links displayed at the top or right-hand side of other results – benefits customers and businesses without unlawfully distorting the market.

And it rejects the EU commissioner Margrethe Vestager’s suggestion that it should show ads sourced and ranked by other companies within the facility.

Its defence rests on three arguments:

  • Fact: Google says that the amount of traffic it has directed to the relevant “aggregator websites” has risen by 227% over the past decade, rather than fallen. Moreover, a study it carried out covering four EU nations indicated that dozens of new price comparison services had begun operation, which it believes indicates that it has not choked off competition
  • Law: The search giant denies it has a duty to direct traffic to its rivals. It says its search engine should not be likened to the supply of electricity or gas, since there are many other ways to access the internet
  • Economics: Google believes the EU has failed to appreciate the dynamism of a market where consumers frequently search for goods via the likes of Amazon, eBay and social networks including Pinterest

‘Artificially boosted ads’

Google accounts for more than 90% of EU-based web searches.

Four months ago, the 28-nation bloc’s competition commissioner issued a “statement of objections” against the company, beginning a process that could ultimately lead to a large fine and compulsory measures to make it change its behaviour.

“I’m concerned that Google has artificially boosted its presence in the comparison shopping market with the result that consumers may not necessarily see what’s most relevant for them, or that competitors may not get the commercial opportunity that their innovative services deserve,” declared Ms Vestager.

A spokesman for Ms Vestager confirmed she had received Google’s reply.

“We will carefully consider Google’s response before taking any decision on how to proceed and do not want to prejudge the final outcome of the investigation,” Ricardo Cardoso told the BBC.

Margrethe Vestager
Image captionMargrethe Vestager had originally given Google 10 weeks to respond, but it took longer

FairSearch Europe, a lobby group that represents Microsoft and Expedia, among others, was one of the complainants against Google. It said it saw nothing in the search firm’s defence that would change its mind.

“The Commission has properly defined the market into which Google has leveraged its overwhelming dominance in search, namely the shopping (price) comparison market,” said its spokesman Thomas Vinje.

“Google has decimated competition in that market by preferencing its own product comparison service in its search results, and consumers have been harmed – and paid higher prices – because Google has cornered the shopping comparison market.”

But, in a blog post, Google’s lawyer Kent Walker denies his firm is behaving in an anti-competitive manner.

Price comparison search
Image captionIf users search for “price comparison” they will get Google’s own ads before links to rival services

“Showing ads based on structured data provided by merchants demonstrably improves ad quality and makes it easier for consumers to find what they’re looking for,” he said.

“We show these ad groups where we’ve always shown ads – to the right and at the top of organic results – and we use specialised algorithms to maximize their relevance for users.

“Data from users and advertisers confirms they like these formats. That’s not ‘favouring’ – that’s giving our customers and advertisers what they find most useful.”

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