Tue, Apr 14, 2015 - Page 15 News List

EU mulling formal charges against Google, experts say

NY Times News Service, Brussels

As Europe’s antitrust investigation of Google Inc has dragged on without a settlement for nearly five years, the US technology giant has had some breathing room to continue its domination of the continent’s Internet search market.

That period of relative freedom for Google might soon come to an end.

EU Commissioner for Competition Margrethe Vestager is scheduled to make her first trip to Washington tomorrow to participate in two antitrust conferences. The visit has raised expectations that she could announce the next move in what might be the biggest and most vexing case on her docket.

Vestager could take the one step former EU commissioner for competition Joaquin Almunia tried to avoid by filing a set of formal charges, called a statement of objections, which would raise pressure on Google to settle in order to avoid a finding of wrongdoing and a potentially huge fine. She could also recommend further investigation or even offer the company a last shot at a negotiated settlement.

Some experts say that Almunia’s unsuccessful strategy makes further attempts to settle the case without formal charges unlikely.

“Given the history of failed attempts to reach a commitment decision, I just don’t see what she would gain from going down this route again, unless Google has promised more concessions that we don’t know about,” British Institute of International and Comparative Law competition law forum director Liza Lovdahl-Gormsen said.

Without formal charges, “Google might try to buy themselves time by offering commitments that are unlikely to be accepted by the commission, and that it knows won’t be accepted by the market, simply because it does not want to be faced with the instrument of torture — the statement of objections,” Lovdahl-Gormsen said,

The primary issue in the European case is whether Google has abused its search engine’s large market share by favoring its own products. The company’s search engine, with about 90 percent of the market in some EU nations, is even more dominant in Europe than in the US.

Vestager is under pressure from Google’s major competitors, including Microsoft, and from powerful publishers in Germany and France to use her wide-ranging authority to inject more competition into areas like online mapping, search and shopping — where European companies remain minnows.

However, there are also trans-Atlantic sensitivities to consider: US President Barack Obama warned Europe in February against making “commercially driven” decisions to penalize companies like Google and Facebook Inc.

A statement of objections would lay out all the ways in which the European Commission believes Google has broken the law. The sending of those objections would also make it more likely that a case would end with a large fine and a demand to change business practices.

However, unlike a settlement, such a decision could result in appeals by Google to the EU’s Court of Justice that might take years to run their course.

In theory, the fine could be more than 6 billion euros (US$6.37 billion), which amounts to about 10 percent of Google’s most recent annual revenue. However, the largest single fine yet levied in such a case falls well short of that mark: The record penalty is 1.1 billion euros in 2009 against Intel Corp for abusing its dominance of the computer-chip market.

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