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Google Rejects EU Anti-Trust Charges

Aug. 27, 2015
If found at fault, Google could face a fine of up to 10% of its annual sales. Its sales were $66 billion in 2014.

BRUSSELS—Google on Thursday rejected accusations by EU anti-trust regulators that it illegally abuses its market dominance, in its first formal reaction to allegations earlier this year.

"We believe that the statement of objections' preliminary conclusions are wrong as a matter of fact, law and economics," Google general counsel Kent Walker said in a blog post, referring to the European Union's official complaint filed in April.

By standing its ground in the formal response, Google leaves the daunting decision to further pursue one of the world's most far-reaching companies to EU Competition Commissioner Margrethe Vestager, a steely Dane and Europe's top anti-trust regulator.

The stakes are huge for Google--which if found at fault under EU anti-trust rules, could face a fine of up to 10 percent of its annual sales--in Google's case, $66 billion in 2014.

"We've taken seriously the concerns in the European Commission's statement of objections that our innovations are anti-competitive," Walker said.

"The response we filed today 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.

In April, Vestager formally accused Google of abusing its dominance in Europe, where the brand holds an imposing 90% of the search engine market--greater even than the U.S., where Google stands at 76%.

"The Commission can confirm that it has today received Google’s reply to the statement of objections," Commission spokesman Ricardo Cardoso said in a statement.

"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," he said.

Vestager, a former Danish finance minister, has launched another high-profile probe against Russian gas giant Gazprom and is also delving into the tax affairs of major multinationals, including Apple, Amazon and Starbucks.

EU 'ignores' Amazon

After three extensions, Google was given until August 31 to provide its response, which it did in a 150-page legal document that carefully details the reasons for standing its ground.

In the argument, Google rejects EU accusations that it offers priority to its own shopping services or paid ads, thus diverting search traffic from competitors such as Amazon and other national players.

But Google said the EU "doesn't back up that claim, 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."

Google insisted that the EU especially ignores the impact of shopping giants "like Amazon and eBay, who are the largest players in the space" and against which the search engine must compete fiercely.

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% over the past decade.

The European Commission, which polices EU competition policy, launched the initial investigation into Google in 2010 following complaints from rivals such as Microsoft and Trip Advisor that Google favored its own companies when customers ran searches.

These critics roundly rejected Google's arguments, defending Vestager.

"The truth is that the Commission understands the markets and the technology very well, and Google is perfectly capable of implementing a remedy that provides equal treatment both to its own product comparison service and to those of others," said Thomas Vinje, legal counsel at FairSearch Europe, an anti-Google lobby.

Vestager's predecessor, Joaquin Almunia, made three attempts to resolve the dispute but in each case intense pressure by national governments, rivals and privacy advocates thwarted the effort.

But since 2010, attitudes in Europe toward Google have deteriorated after revelations by former NSA contractor Edward Snowden that Silicon Valley giants had provided troves of personal data to U.S. intelligence.

Copyright Agence France-Presse, 2015

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