It’s safe to say that Google is one of the most influential tech companies in the world. Although highly popular in America, Google is even bigger in Europe, handling around 90% of the search engine traffic. Because of its immense popularity overseas, the European Union became concerned when they began to suspect five years ago that Google was violating antitrust laws. At the time, they couldn’t find enough evidence to bring forth a formal case; however, last Wednesday, Margrethe Vestager (the European Union’s competition commissioner and antitrust regulator) officially had enough information to file antitrust charges against the company.
These charges are due to accusations that Google promotes its own products over its competitors’ (i.e. its shopping services, e-mail, etc.). Vestager even goes as far as to say that Google uses its Android smartphone operating system to block rival companies. For example, Android users cannot choose between Google Play (a place to buy music, videos, and games) and the much more popular App Store and iTunes, both run by Google’s competitor, Apple.
In a speech on April 16th, Vestager said, “One should congratulate a company in being that successful. Dominance in general is not a problem. But if you create a situation where you abuse a very powerful market position… then we have a problem.”
Vestager’s claims are backed up by overwhelming statistics that are pretty hard to ignore. In Europe, as of March 2015, Google dominated the search engine market by 92%. This left other high profile companies like Bing with 3% and Yahoo with 2%. In the smartphone market, Android dominated by 71%, leaving iOS (Apple’s operating system) with only 21% of the market.
If Google can’t come back with a strong defense, they’re looking at a fine of more than 6 billion euros (nearly $6.5 billion U.S.)- a record breaking fine regarding technology companies and antitrust laws.
Google has ten weeks to respond to the formal charges. As the company prepares to present its case, they released a statement on their blog saying, “While Google may be the most used search engine, people can now find and access information in numerous different ways—and allegations of harm, for consumers and competitors, have proved to be wide of the mark.”
Google is no stranger to antitrust lawsuits, having beat one back in the fall of 2014 by a San Francisco tourism company who were angry that their website wasn’t as promoted on Google as it was on other search engines. It’s clear that the European Union is going to be a much more threatening opponent. While Google was able to defeat their first antitrust lawsuit by claiming “freedom of speech,” it’s going to take a much stronger defense to win against Vestager.
If Vestager wins the lawsuit, many of Google’s business practices will be forced to change, possibly affecting all users of Google services, not just those in Europe.