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  September 2nd, 2015 | Written by

Google Responds to EU Market Dominance Charges

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  • Google lawyer: We believe EC’s allegations are wrong “as a matter of fact, law, and economics."
  • Google currently holds approximately 90 percent of the internet search engine market in the EU.
  • Google says its search engine brings "diverse new players, new investment and expanding consumer choice."

U.S. internet search giant Google has issued a 150-page rebuttal to accusations by European Union antitrust regulators that it “illegally abuses its market dominance” in the 28-nation member bloc.

The retort is the company’s first formal reaction to the allegations, which were filed earlier this year by the European Commission, the EU’s Brussels-headquartered regulatory agency.

“We believe that the statement of objections’ preliminary conclusions are wrong as a matter of fact, law, and economics,” said Kent Walker, Google’s general counsel. “We’ve taken seriously the concerns in the European Commission’s statement of objections that our innovations are anti-competitive.”

The response from the Mountain View, California-based multinational “shows why we believe those allegations are incorrect, and why we believe Google increases choice for European consumers and offers valuable opportunities for businesses of all sizes,” he said.

If found at fault under EC antitrust rules, Google could face a fine of up to 10 percent of its annual sales, or about a staggering $66 billion in 2014.

The company currently holds approximately 90 percent of the Internet search engine market in the European Union, compared to its 75 percent share of the market in the U.S.

In its rebuttal to the EC allegations, Google said the EC “doesn’t back up its claim” that Google offers priority to its own shopping services or paid ads “thus diverting search traffic from competitors such as Amazon and other national players.”

The EC, Google said, “doesn’t counter the significant benefits to customers and advertisers, and doesn’t provide a clear legal theory to connect claims with its proposed remedy” and “especially ignores the impact of shopping giants like Amazon and eBay.”

Moreover, Google said its search engine had helped bring “diverse new players, new investment and expanding consumer choice” with retail-driven traffic increasing by 227 percent over the past decade.

The initial investigation of Google’s operations in the European Union was launched in 2010. The formal charges against Google were filed in April by former Danish Finance Minister and current EU Competition Commissioner, Margrethe Vestager.

The EC responded to Google’s rebuttal saying it would “carefully consider Google’s response before taking any decision on how to proceed” and that it does “not want to prejudge the final outcome of the investigation.”

Google isn’t the only U.S.-based company in the EC’s regulatory sights as investigations are currently underway into the tax status of several major multinationals including Apple, McDonalds, Amazon and Starbucks, as well as FedEx’s proposed acquisition of TNT Express.