EU Opening Antitrust Case Concerning Google Adwords: Reports

By Jaikumar Vijayan  |  Posted 2016-06-27 Print this article Print
Google Adwords, EU, antitrust

EU authorities are reportedly close to opening a third antitrust investigation against Google—this time concerning its core advertising services.

The hits appear to keep on coming for Google in the European Union.

Several media outlets on May 27 reported plans by the Competition Office at the European Commission to open another antitrust investigation against the company, this time pertaining to its Adwords online advertising service.

In a report from Brussels, The Wall Street Journal said the European Commission has asked companies that have confidentially aired grievances against Google over its alleged advertising abuses for permission to notify Google of the details of those complaints.

The move suggests that the commission is getting ready to issue a so-called Statement of Objections against Google to formally charge the company with violating EU fair competition laws with its advertising business. The charges are likely to be filed against Google owner Alphabet Inc. before August, The Journal reported, citing two unnamed sources close to the matter.

Google did not respond to a request for comment.

If the reports are true, this will become the third antitrust investigation that the European Commission has opened against Google in about 14 months.

Margrethe Vestager, the European commissioner for competition, last year formally charged Google with abusing its search dominance to favor of its own comparison-shopping Websites. The investigation was prompted by complaints against Google from numerous organizations, including several rivals and publishing houses. The commission is investigating whether Google is putting links pointing to its shopping Websites ahead of links to rival Websites in its search engine results.

Earlier this year, Vestager's office opened another investigation, this time of bundling practices related to Google's Android operating system. The commission is looking to see whether Google is abusing its market dominance to force Android handset makers to preinstall Google applications on their devices. Several developers have said that Google's requirement that handset makers who want to preinstall Google Play on their devices also install other Google apps, including Search, effectively prevents them from getting their own apps installed on the devices.

According to The Journal, the latest investigation will examine whether Google is preventing Website owners from placing ads that compete with Google's own advertising business. As part of the investigation, Vestager's office will also see if Google is preventing advertisers that use Adwords from using other search advertising services.

Google has continued to insist that its business practices are fair and consistent with fair competition laws in the EU and elsewhere. The company has claimed that, if anything, its search engine has only helped drive traffic to third-party comparison-shopping Websites, rather than divert it away from them.

Google faces potentially billions of dollars in fines if the European Commission finds that the company violated EU competition laws.

The EU is not the only place where Google is dealing with similar issues. Authorities in Russia, India, Canada and elsewhere are also looking into whether Google has abused its massive Internet presence to treat rivals unfairly.


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