Google accused of abusing dominance in search by EU - with Android facing anti-trust investigation as well

Opening salvos against Google Shopping and Android just the start of a comprehensive EU assault on Google

The European Union's anti-trust authorities have accused Google of abusing its market dominance in online search following a five-year investigation, and is opening a market-abuse investigation into the Android mobile operating system as well.

And European competition commissioner Margrethe Vestager added that although the initial case will focus on Google Shopping, it would almost certainly be widened in scope to cover other online services offered by the online giant.

The EU claims that Google abused its dominance in search to provide undue prominence in search results to its own Google Shopping service. "It may therefore artificially divert traffic from rival comparison shopping services and hinder their ability to compete on the market. The Commission is concerned that users do not necessarily see the most relevant results in response to queries - this is to the detriment of consumers, and stifles innovation," claimed the Commission in its news release.

The Statement of Objections, published today, focuses on the display and ranking of search results, with Vestager spelling out that the EU would investigate companies under EU laws regardless of where they are based.

"The Commission's objective is to apply EU antitrust rules to ensure that companies operating in Europe, wherever they may be based, do not artificially deny European consumers as wide a choice as possible or stifle innovation," said Vestager.

She added: "In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules. Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.

"I have also launched a formal antitrust investigation of Google's conduct concerning mobile operating systems, apps and services. Smartphones, tablets and similar devices play an increasing role in many people's daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company."

In an internal memo circulated to staff on Tuesday, as news circulated that the European Commission would charge Google today, the company rejected the allegations.

"We have a very strong case, with especially good arguments when it comes to better services for users and increased competition," claimed Google. It argues that it has provided internet users with better services and increased competition, and that mobile computing is already shaking up competition further.

"The competition is just one click away - and it's growing. People can use Bing, Yahoo, Quora, DuckDuckGo, and a new wave of search assistants like Apple's Siri and Microsoft's Cortana, as well as more specialized services like Amazon, Idealo, Le Guide, Expedia, or eBay. In addition, users increasingly turn to social networks like Facebook and Twitter to find news and suggestions - where to eat or which movies to watch," claimed the memo.

It continued: "Mobile is changing everything - with the explosion of apps taking people directly to the information they want. Today 7 out of every 8 minutes on mobile devices is spent within apps. Yelp, for example, has said that over 40% of its traffic comes direct from its mobile app."

However, the European Commission's own news release suggests that the EU is planning a broad-based assault on Google.

"The Commission continues its ongoing formal investigation under EU antitrust rules of other aspects of Google's behaviour in the EEA, including the favourable treatment by Google in its general search results of other specialised search services, and concerns with regard to copying of rivals' web content (known as 'scraping'), advertising exclusivity and undue restrictions on advertisers."

The investigations are expected to last for years and could potentially cost Google fines of €5bn or more.