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With EU challenging Google, this time 'stakes are high'

Sharon Gaudin | April 17, 2015
EU's antitrust charges against Google search could be costly and distracting.

With the European Commission leveling antitrust charges against Google, the company should be bracing itself for a big and potentially costly fight over its dominant search business.

"This could be a dilly of a pickle for Google," said Dan Olds, an analyst with The Gabriel Consulting Group. "The stakes here are pretty high. I think this is the biggest outside threat that Google has ever faced. It's going to be all-hands-on-deck to battle the EU however they can. This means not just legal action, but also working hard on the politics of the situation in order to gain some allies. It's going to be an uphill fight, since Google is viewed as the dominant Internet player."

On Wednesday, the European Commission charged Google with using its dominant position in the search market to squeeze out online shopping comparison competitors by giving preference to its own Google Shopping service.

The commission, the executive body of the European Union, claims that Google's search infringes on the commission's antitrust rules, stifling competition and harming users.

The commission separately launched an antitrust investigation into Google's Android mobile operating system. The investigation would look into whether Google, as the maker of the OS, was, among other things, requiring device manufacturers to bundle Google's own apps with the open-source operating system.

"Google now has the opportunity to convince the commission to the contrary," Margrethe Vestager, an EU commissioner in charge of competition policy, said in a statement on the search charge. "However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe."

The antitrust charge is going to be a big challenge to Google, said Jeff Kagan, an independent industry analyst.

"Google must follow the rules and do business the way business is done in each area of the globe, and each area is very different from the next," Kagan said. "That is very confusing for a single company to have so many different masters to satisfy, especially for Google, which wants to be as powerful in Europe as it is in the United States."

This fight with the EU could also be a distraction for Google.

"The EU was unhappy that Google didn't seem to be taking them seriously, so they are escalating this," said Rob Enderle, an analyst with the Enderle Group. "This is at the heart of where Google gets its income, and Google is likely to be unwilling to compromise... For Google, this will be about control, revenue and profit, which will be a hard pill to swallow."

Antitrust issues aren't new to Google.

Early last year, the company settled a separate antitrust challenge from the EU with an agreement requiring Google to give comparable display to rival search services. That three-year dispute with the EU focused on competitors' claims that Google sank rivals in its search result rankings.

 

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