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17th Feb 2019

EU changes tack on Google, threatens record fine

  • Google must make a new offer to avoid an EU fine, Joaquin Almunia told MEPs on Tuesday. (Photo: Carlos Luna)

Google could face a record fine for breaching EU competition rules, the European Commission's competition chief has said, warning that its four year investigation into the US search engine could eventually rival the sixteen years spent investigating software rival Microsoft.

Presenting the Commission's annual competition report in the European Parliament on Tuesday (23 September), Joaquin Almunia said that he had asked Google "to improve its proposals" or face a formal 'Statement of Objections', including a possible fine, if its latest offer did not go "in the right direction".

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  • (Photo: European Commission)

Google faces a total of twenty complaints from its rivals, including Microsoft.

"Some of the twenty formal complainants have given us fresh evidence and solid arguments against several aspects of the latest proposals put forward by Google," Almunia told MEPs.

"We now need to see if Google can address these issues and allay our concerns," said Almunia, although he noted that "Microsoft was investigated for 16 years, which is four times as much as the Google investigation has taken, and there are more problems with Google than there were with Microsoft.”

The EU executive launched an investigation into Google in November 2010 over claims that the search engine was using its 95 percent market share in Europe to distort internet search results by ensuring that links to its own products and services were always at the top.

The investigation also focused on how Google displays content from other websites without permission.

Almunia had previously appeared to be set to accept Google's third offer of remedies aimed at ending the dispute, but backtracked during the summer following a concerted lobbying effort by the French and German governments.

The competition commissioner had also been reluctant to talk up the prospect of fining Google, stating in February that the alternative to reaching an agreement with the search-engine "could take many years and many uncertainties and would not necessarily be good for consumers".

German publishing house Axel Springer, Rupert Murdoch's News Corporation and Microsoft have also complained about Google's market dominance in recent weeks.

In a veiled reference to this, and in response to criticism from MEPs, Almunia remarked that he would "strongly reject attempts to transform competition enforcement into an ordinary political debate".

The conclusion of the Google investigation is now almost certain to be left to Almunia's successor, likely to be Denmark's Margrethe Vestager, with the Spaniard leaving the EU executive in October.

Under EU competition rules, sanctions could include a potential fine of up to 10 percent of Google’s annual turnover of around €40 billion. To date, Microsoft has faced the highest amount of competition fines, totalling €2.2 billion.

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