Google has denied abusing its dominant market position in its formal response to European Commission charges that its online search advertising is anti-competitive.
The EC started an investigation into Google’s business practices in November 2010, notifying the company in March 2013 of concerns that the US firm had abused its dominance of the search market.
In April 2015, EU competition commissioner Margrethe Vestager gave Google 10 weeks to respond to allegations that the search firm systematically favoured its own comparison shopping product in general search results pages.
Vestager said she was concerned Google had given an unfair advantage to its own service and that competitors such as comparison sites TripAdvisor and Yelp could be squeezed out by Google’s dominance.
“Google has the opportunity to convince the commission to the contrary,” she said. “However, if the investigation confirms our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”
The EC is also concerned that Google may have hindered the development and market access of rival mobile operating systems, applications and products.
Vestager’s deadline of 24 June was first extended to 17 August and then to end of August at Google’s request.
In Google’s 150-page response submitted just days before the latest deadline, the company denied breaking EU competition laws and said the EC’s allegations were “incorrect” and “unfounded”.
According to the response, internet traffic from Google to price comparison websites has increased by 227% in the past 10 years.
Google also claimed that consumers are increasingly going directly to sites such as Amazon and eBay to buy goods, saying it has increased rather than limited choice for European consumers.
“Our response provides evidence and data to show why the EC’s concerns are unfounded,” Kent Walker, senior vice-president and general counsel at Google said in a blog post. “We use traffic analysis to rebut claims that our ad displays and specialised organic results harmed competition by preventing shopping aggregators from reaching consumers.
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“Economic data spanning more than a decade, an array of documents, and statements from complainants all confirm that product search is robustly competitive.”
The EC is seeking a “peculiar and problematic remedy”, he said, requiring that Google show ads sourced and ranked by other companies within its advertising space. “We show in our response that this would harm the quality and relevance of our results,” said Walker.
He concluded by saying the EC’s preliminary conclusions were “wrong as a matter of fact, law and economics”, adding: “We look forward to discussing our response and supporting evidence with the Commission, in the interest of promoting user choice and open competition.”
Commentators said Google's denial potentially sets the company up for further battles with the EC, which is also investigating whether Google uses its Android mobile operating system to promote its services.
EC officials will now examine Google's response and decide whether it has broken the law. If it fails to convince the EC, Google could face huge fines of up to 10% of its worldwide turnover, which was $6.6bn in 2014.
EC spokesman Ricardo Cardoso told the BBC: "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.”
FairSearch Europe, a coalition of businesses that have demanded that the EC take action on Google, said there was no weight in the company's response, reports the Telegraph.
"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," FairSearch Europe spokesman Thomas Vinje said.