EU set to follow Google case with broader competition crackdown

The EU signalled a more activist period in European competition enforcement on Wednesday, as Brussels warned that charges against Google could be extended and other landmark cases were imminent.

Margrethe Vestager, the EU's competition commissioner, issued charges against Google's retail business on Wednesday over concerns that the search engine was biased in favour of the company's own shopping services. Google denies that it is breaching antitrust rules.

EU officials said the Google case was likely to be Ms Vestager's opening shot in competition cases for the EU, including another potential major antitrust showdown with Gazprom. The charge sheet against Russia's gas export monopoly is ready, they said.

While the focus on shopping was narrower than some complainants against Google had hoped, Ms Vestager said the case could lay the groundwork for tackling other areas where the search company derives its money from advertising, such as travel agencies and mapping.

"If an infringement is proven, a case focusing on comparison shopping could potentially establish a broader precedent for enforcing EU competition rules in other instances of Google favouring its own services over competing services," she said.

Ms Vestager stressed that Google could remedy the EU's concerns with what she called "future-proof" principles that set out fairness in the way searches worked. "To be clear, we would not want to interfere with Google's design choices or how its algorithms work."

In this respect, Ms Vestager appears to be aiming at a broader solution to the complaints against Google than her predecessor, Joaquin Almunia. In his third attempted settlement with the company Mr Almunia focused on page layout and the display of products and services from Google's rivals.

Given the stakes for Google's business model, Gary Reback, a Silicon Valley lawyer who has represented several of its rivals said: "You should expect Google to fight this tooth and nail. It's going to affect nearly everything they do on the monetisable side of search."

Shopping was the first area where the commission received a complaint over Google's conduct, from the British price comparison site, Foundem. The complaints have since snowballed to include online travel services such as Expedia, as well as large players including Microsoft, and French and German publishers.

Google has 10 weeks to respond and allay the commission's concerns. It also has a right to a hearing in the coming months, normally attended by national representatives, where all the main arguments can be aired.

If Google's defence is unsuccessful, it faces a fine. Theoretically this could be as much as 10 per cent of the previous year's turnover, some $66bn in 2014 but lawyers do not expect any potential penalty from the commission to be anywhere near as high as the potential maximum.

Ms Vestager said she was travelling to Washington on Wednesday evening to meet her antitrust counterparts in the US and went out of her way to note that several of the complainants in the case were also US companies, a clear attempt to head off accusations that the action was inspired by German-led anti-Americanism.

"There will be plenty of opportunities to discuss this with American counterparts," she said.

Google said, in an internal email sent to staff on Tuesday before Ms Vestager's announcement: "We have a very strong case, with especially good arguments when it comes to better services for consumers and increased competition."

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