Google Under Serious Scrutiny from European Authorities

Google seems to be getting a lot of static by the European Commission over distorting results for the sake of its comparison shopping service. A formal anti trust complaint spells even more trouble for Google which could potentially result in hefty fines and major changes to Google’s business patterns in Europe.

What is this complaint about?

The regulators at the European Union believe that Google attempted to curb competition by taking advantage of its exalted position in online search. The main gripe is with the method Google adopts to show Google Shopping, Google’s dedicate shopping comparison product. Even if a user searches for the most basic products like cat food or clothes, items from Google Shopping are displayed at the top.

What do rivals have to say?

Corporations such as Microsoft and Yelp are of the view that Google’s bias in this matter comes courtesy of its ginormous control over the search engine market share. Google has secured over 90 percent of the share in many European nations and nearly 65 percent in the United States. Rivals believe that this puts Google in a position where it can artificially direct traffic away from its competitors.

What does Google have to say?

Senior Vice President for Search at Google, Amit Singhal, was quick to direct users’ attention towards Amazon and eBay that dominate Google in the European nations. Moreover, he mentioned the burgeoning success of Zalando, a German shopping site, to counter the comment about competition being curbed by Google. He clarified that the industry is still open to new entrants, innovation and investment which isn’t a possibility when competition is stifled.

How much trouble is Google in, exactly?

The EU could charge Google as much as 10 percent of its yearly sales in lieu of the breach of antitrust law. That amounts to over $6 billion for the search engine giant. Google will have to respond to all charges against it within ten weeks if it wishes to steer clear of heftier fines.

Interestingly, this doesn’t just end at Google Shopping; the European Commission is ready to investigate Android to check if Android users are also pressured along these lines. In addition, it will be interested to see if Google discouraged any manufacturers from building versions which were consistent with the guidelines of antitrust law.