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The European Union's antitrust chief on Wednesday formally accused Google of abusing its dominance in web searches to the detriment of competitors and began official proceedings into whether its Android smartphone software forces phone makers to favour the company's own services and applications.
"If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe," said Margrethe Vestager, the European Union competition commissioner.
The abuse charge focused on accusations that Google diverts traffic from its rivals to favour its own products and services, particularly websites for shopping. That led the European Commission to issue a set of formal charges, known as a statement of objections.
A large number of online operators have complained about Google in areas like mapping and travel.
The commission also said it was stepping up a separate investigation into whether phone makers that agree to use Android - and that also want Google applications like YouTube - face contractual requirements to place those applications and other Google-branded applications in prominent positions on a mobile device.
"Smartphones, tablets and similar devices play an increasing role in many people's daily lives," Vestager said, "and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company."
Google's Android software, which is used by large cellphone makers like Samsung, is the world's largest operating system with roughly an 81 per cent market share, according to the technology research company Gartner. Apple holds a 15 per cent stake, while Microsoft has a less than 3 per cent share.
"While Google may be the most-used search engine, people can now find and access information in numerous different ways - and allegations of harm, for consumers and competitors, have proved to be wide off the mark," Google said in a blog post on Wednesday.
In a separate blog post, the search giant also said that its partnerships with cellphone makers that rely on Google's Android operating system were voluntary, and that they offered benefits to both consumers and manufacturers.
"The decision by the commission to position itself as the lead competition authority for the digital age may trigger anger among some US politicians, and there is no denying that the US industry has been at the forefront of technology," said Emanuela Lecchi, a partner in London at the law firm Watson, Farley & Williams.
"But this is only half the story," she said, "because there are American major players including Microsoft and TripAdvisor that have been very vociferous against Google, too."
Ramon Tremosa i Balcells, a member of the European Parliament from Catalonia who has long called for formal charges, said, "I always declared that, without any pressure, Google had no intention to change or propose a serious remedy to the harm done."
"Now the commission finally seems to have realised this," he said.
The latest move by the authorities in Brussels touches on activities that most citizens in Europe carry out every day, from looking online for the best deals on clothes and home wares, to using a smartphone to watch streaming movies and music videos. The move had been widely anticipated in recent days and was confirmed on Tuesday in a memo that Google sent to its employees.
The case is being brought as the biggest American tech companies face intensifying scrutiny by European regulators and the potential that tax, antitrust and privacy rulings could cut into their sizable profits in the region and affect how they operate around the world.
Europe's antitrust officials are reviewing low-tax arrangements granted to Apple in Ireland and Amazon in Luxembourg, and privacy watchdogs are looking into how securely companies like Facebook are protecting people's online data. Policy makers are also investigating whether American Internet platforms like Amazon have too much control over how Europeans gain access to online services.
The Google case is the most weighty decision by Ms. Vestager since she took office late last year, and the biggest antitrust case since European officials went after Microsoft in the 2000s. Microsoft accrued a total of almost 2 billion euros, or about $2.12 billion, in European fines over a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.
If Google fails to rebut any formal charges, Ms. Vestager could levy a fine that could exceed €6 billion - about 10 percent of Google's most recent annual revenue. But the largest single fine yet levied in such a case falls well short of that mark: The record is €1.1 billion in 2009 against Intel for abusing its dominance of the computer chip market.
Google could still settle the matter. But whatever the search giant might negotiate with the commission, analysts say, the deal will have a greater impact on its business than three previous attempts to settle with Ms. Vestager's predecessor, Joaquín Almunia.
Ms. Vestager, a leading Danish politician who took over as the Union's top antitrust official in November, is scheduled to travel on Wednesday to Washington, where she is expected to meet senior justice officials and participate in antitrust conferences on Thursday and Friday.
©2015 The New York Times News Service
