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Antitrust: European Commission targets Google's price comparison service and advertising-related practices

03/11/2016

The investigation opened in November 2010 into Google's various practices was stepped up on 14 July 2016, when the Commission announced that it had sent the company two statements of objections.

The first of these statement of objections is in line with an earlier statement sent to Google by the Commission in April 2015, where it alleged that the company had abused its dominant position in the markets by systematically favouring its own price comparator (called 'Google Shopping') in its general search results pages (press release IP/15/4780 of 15 April 2015).

This new statement of objections is a response to the observations that Google sent to the Commission and provides additional information that tends to support the Commission's initial conclusion (press release IP/16/2532 of 14 July 2016).

For example, with regards to the relevant markets, the Commission confirmed its analysis which stated that the comparison shopping services and e-commerce platforms, such as Amazon and eBay, belong to separate markets. Nevertheless, its new statement asserts that even if these platforms are included in the same market as that affected by Google's practices, comparison shopping services are a significant part of that market. The Commission considers that Google's conduct has weakened competition from its closest rivals.

Furthermore, the new statement of objections seeks to strengthen the evidence that shows, according to the Commission, that Google gives systematic favourable treatment to its price comparator over its rivals.

Meanwhile, the second statement of objections targets the Google's "Adsense" service (press release of 14 July 2016, see below). According to the Commission, Google protected its dominant position in online search advertising by preventing competitors from growing in this area.

More specifically, the Commission has concerns regarding Google's agreements with large third parties such as newspapers, telecoms operators and online retailers. These agreements enable Google to place search-related advertisements on third party websites whenever a user enters a search query.

The Commission believes that several provisions of these agreements place restrictions upon third party websites in terms of displaying search ads from Google's competitors.

Google has 8 and 10 weeks respectively to respond to the Commission's arguments that are outlined in the two statements of objections and defend the legality of the alleged practices.

Google will have to work hard to defend its practices since it already has to answer a statement of objections sent to it in April 2016 regarding Android, its operating system, and certain mobile applications (press release IP/16/1492 of 20 April 2016).

Whether or not these procedures result in a conviction against Google regarding antitrust practices, they demonstrate the determination of the Commission to ensure that digital giants do not break competition rules.

Authors

Vincent Lorieul
Vincent Lorieul
Counsel
Paris