Google Disputes EC Antitrust Concerns About Its Comparison Shopping Services
Google rejected European Commission antitrust concerns about its comparison shopping search processes, calling the EC's preliminary conclusions "wrong as a matter of fact, law and economics." In a Thursday posting on its Europe blog, Google said its advertising format for price comparisons "demonstrably improves ad quality and makes it easier for consumers to find what they're looking for." FairSearch Europe Legal Counsel Thomas Vinje, however, said the EC's assessment of Google's dominance in the price comparison shopping market is correct and based on well-established legal principles. The Initiative for a Competitive Online Marketplace (ICOMP) accused Google of being "in denial" about the "devastating impact" its self-preferencing has on the online market.
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The EC announced in April that it would investigate Google's comparison shopping service and Android mobile operating system (see 1504150002). Its concern about the shopping service is that users don't necessarily see the most relevant results because Google puts its own comparison shopping product first. The result of such systematic favoritism has been higher growth rates for Google's products, to the detriment of rivals, the EC said.
But Google General Counsel Kent Walker argued in his blog posting that, contrary to EC concerns that its innovations are anti-competitive, economic data, "an array of documents, and statements from complainants all confirm that product search is robustly competitive." Google also faulted the EC for failing to consider the impact of major shopping services such as Amazon and eBay, saying they're the biggest players in the space.
Google developed new ways to organize and rank product information and present it to users in useful formats in searches and ads, the company said. In 2012, it introduced the Google Shopping Unit as a new ad format, which it doesn't believe is anti-competitive, Walker wrote. Google shows those ad groups to the right and at the top of organic results, and uses a specialized algorithm to maximize their relevance for users. "That's not 'favoring' -- that's giving our customers and advertisers what they find most useful," Walker wrote. He slammed the EC's "peculiar and problematic remedy" that would require the search engine to show ads sourced and ranked by other companies within its own advertising space. That would hurt the quality and relevance of its results, it said, and there's no legal justification for forcing Google to do so.
Vinje rejected Google's argument that the EC should include Amazon and eBay in its market definition, saying they're large shopping services, not product comparison services. Google suggests its service increases choice for European consumers, but the EC statement shows the company has dramatically boosted its own position in the comparison shopping market, he said. Vinje supported the EC's proposed equal-treatment remedy, calling it straightforward and future-proof. Based on past EU competition cases, he said, it would be surprising not to see the search engine fined, but stressed that FairSearch particularly wants Google to change its anti-competitive behavior.
Competition Commissioner Margrethe Vestager "has been clear" that in her view, Google's systematic self-preferencing of its own comparison shopping service, and its demotion of rivals, breaches antitrust rules, ICOMP said. Despite the EC's detailed analysis over the years, the company still refuses to acknowledge the impact of its conduct, it said. Google apparently hasn't requested an oral hearing before the EC, but ICOMP urged it to do so in the interests of transparency and meaningful debate. The EC will now study Google's response, but it's unclear whether interested parties will have access to it, Vinje said.