Google facing £1.5bn fines if EC rules it has abused power

Published on Tuesday 30 November 2010 13:22

INTERNET search engine giant Google is to be investigated by the European Commission over claims of abusing its dominant market position.

The European Union's competition watchdog said the probe followed complaints from other online search providers that Google had put them at a disadvantage in both its paid and unpaid search results.

Smaller competitors also allege Google lists its own services above those of rivals.

If it is found to have been penalising smaller services, Google could face fines in the region of 1.5 billion, 10 per cent of its revenue based on 2009 earnings.

The Commission has shown its resolve in confronting US corporations and only last year concluded a long-running anti-trust case involving Microsoft that led to more than 640 million in fines.

Three companies - UK-based price-comparison website Foundem, French legal search engine ejustice.fr and Microsoft-owned shopping site Ciao - lodged complaints against Google with the commission in February.

Google controls about 90 per cent of the online search market in Europe. The anti-trust watchdog is taking the complaints seriously enough to launch an in-depth examination of its practices. The Commission has notified the US Department of Justice of its investigation, which is likely to take "at least a few months," said Amelia Torres, spokeswoman for Competition Commissioner Joaquin Almunia. Google insists it has done nothing wrong.

• The search history of global giant

"Since we started Google we have worked hard to do the right thing by our users and our industry - ensuring that ads are always clearly marked, making it easy for users and advertisers to take their data with them when they switch services, and investing heavily in open source projects," a statement said.

"But there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns."

Icomp, a business group whose members include Foundem and which is sponsored by Microsoft, said it welcomed the Commission's investigation.

The decision "acknowledges some of the issues stemming from online marketplace dominance," Icomp's legal counsel David Wood said in a blogpost. "A thorough investigation is necessary to determine the workings of Google's black box."

Europe's anti-trust regulators have previously confronted US corporate giants. They slapped $2bn in fines on Microsoft and $1.4bn on Intel. And earlier this year it launched an anti-trust probe into IBM's mainframe computer business.

With Google presumed innocent unless proven guilty, the EC said the probe doesn't imply it has proof of anti-trust violations. "It only signifies the commission will conduct an in-depth investigation as a matter of priority," the Commission said.