Google Has Been Warned By EU For Its Anti-Competitive Practices and The Tech Giant May Be Penalized


EU document has come up with some interesting advances towards Alphabet’s (GOOGL.O) Google. According to this document, EU antitrust regulators plan to order the company to stop providing smart phone makers financial incentives for pre-installing Google search. The company has been warned of a large fine if this continues. This particular document went on for more than 150 pages and was sent to the complainants for feedback. Google had received a copy of this document back in April and were accused by the European Commission of using their Android mobile operating system to shut out any competitors.

Well one can feel bad for the competitors in situations like these when Google seems to be progressing daily and this progress seems to be halting healthy competition. In its charge sheet, referred to as the statement of objections, the EU competition enforcer said that it had planned to tell the famous technology giant, Google to stop discounts, payments or any such incentives for installing Google’s services in mobile phones. The regulators also wish to stop Google form enforcing the use of other Google apps that may hinder competition in the future. According to the document, Google “cannot punish or threaten” companies for not agreeing to the giant’s conditions. Looks like things are looking very good for Google now with the regulators involved.


What is it with all the strictness?

So the natural question here is why are the regulators trying to help Google’s rivals? Well, apparently the investigation followed a complaint set in motion by FairSearch which is a lobby group supported by many companies that do not wish to be disadvantaged in any way by the search engine’s dominance in the market. This complaint took place in the March of 2013. The technology giant is at the risk of facing a large fine because of the anti-competitive practices that started in January 2011. These practices are getting stricter day by day as the world becomes one large global market place. The document said, “The Commission intends to set the fine at a level which will be sufficient to ensure deterrence.”

The penalty charged could be based on anything AdWords clicks by European users, Play Store apps purchases, AdMob’s in app-advertisements and Google Search Product queries. Ricardo Cardoso the commission spokesman declined to comment on the situation. However, Google said, "We look forward to showing the European Commission that we've designed the Android model in a way that's good for both competition and consumers, and supports innovation across the region."

More problems?

Well things just keep getting interesting. Another charge sheet suggests that Google could be fined for favoring its own shipping service over those of competitors. According to what the sheet sent in July said, Google may have to rank competitors shopping services the same way it ranks its own if it wishes to avoid penalties. Another important thing to add is that the document was heavily edited and large sections were obscured by the tech giant. According to the Commission, it has yet to decide whether to allow Google to charge its rivals for displaying their services in a more notable manner. The amount may correspond to Google’s operating cost or may be a small amount based on the lowest reserve price for AdWords which is currently set at 0.01 euro per click.

Well Google needs to play smart right now because the regulators seem to be on to it as competition and rivalry keeps on increasing in the market.