Google launches response to EC’s anti-competition claims

Google has launched a 100-page submission in response to the European Commission’s allegations of anti-competitive shopping search results.

As is often the case with continental bureaucracy, the European Commission’s apparent crusade against Google has been an overly protracted affair thus far. April was the last time any significant action took place, when the EC’s commissioner for competition policy, Margrethe Vestager, looked to open up proceedings against the digital giant because of concerns over anti-competition when it comes to prioritisation of search results and shopping comparisons. At the time, the EC officially announced a Statement of Objections against Google, which said it’s been abusing its dominant market position, which has a knock-on effect to both competitors and the consumer. This, after the Commission took four and a half years to conclude an investigation from November 2010 which effectively said that Google prioritises its own shopping products.

Google didn’t bite back at the time; however it has now released a retort in the form of a 100-page document, which has not been made public, and summarised in a blog post written by SVP and general counsel Kent Walker. Titled “Improving quality isn’t anti-competitive”, Walker wasted little time in confronting the Commission’s concerns.

“We’ve taken seriously the concerns in the European Commission’s Statement of Objections (SO) that our innovations are anti-competitive,” he said. “The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers and offers valuable opportunities for businesses of all sizes.

The SO says that Google’s displays of paid ads from merchants (and, previously, of specialized groups of organic search results) “diverted” traffic away from shopping services. But the SO doesn’t back up that claim, doesn’t counter the significant benefits to consumers and advertisers, and doesn’t provide a clear legal theory to connect its claims with its proposed remedy.”

Walker then went on to claim Google’s new dedicated shopping search function is anything but anti-competitive, claiming it helps consumers find the best value for money.

“We developed new ways to organize and rank product information and to present it to users in useful formats in search and ads,” he said. “In 2012, as part of that effort, in addition to our traditional ads, we introduced the Google Shopping Unit as a new ad format. We don’t think this format is anti-competitive. On the contrary, showing ads based on structured data provided by merchants demonstrably improves ad quality and makes it easier for consumers to find what they’re looking for.”

The Commission’s SO allegedly requires Google to show advertisements sourced and ranked by other companies. “We show in our response that this would harm the quality and relevance of our results,” Walker said. “And, in a report submitted with our response, former President of the General Court Bo Vesterdorf outlines why such an obligation could be legally justified only where a company has a duty to supply its own rivals – as where it controls an input that is both essential and not available anywhere else (like gas or electricity).  Given the many ways to reach consumers on the Internet, the SO doesn’t argue that standard applies here.”

The Commission’s original Statement of Objection claims it does not prejudge the outcome of the investigation, and that Google has the chance to respond to the allegations, which it has done this week. The Commission also states there is no time limit on an investigation, so expect this one to roll on for some time yet.