After trying to settle an antitrust case earlier in Europe, Google is said to be on the verge of being handed charges that it has violated European Union antitrust rules.
Google has been told it will face charges by the European Union that it violated antitrust rules, people with knowledge of the matter said.
A decision will probably be announced this week, said the people, who asked not to be identified because the matter isn’t public.
Google and rivals are preparing for a decision after more than four years of regulatory scrutiny, raising the prospects of fines and constraints on how it delivers Internet search.
Under the new leadership of Competition Commissioner Margrethe Vestager, the EU stepped up its Google investigation in December, when regulators sought additional information from rivals involved in Internet maps, travel and other services.
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With Google commanding almost all the search market in some European countries, critics including Microsoft and Expedia are fed up with the company, which they say highlights its own Web services in query results at the expense of rivals.
While a decision hasn’t been announced and many legal hurdles would remain, Vestager has several levers she could use to penalize Google, including hefty fines and potential changes to how it presents its own services in search results.
“It’s a serious investigation, with serious consequences if the EU chooses to bring a case and has evidence,” said Spencer Waller, an antitrust professor at Loyola University School of Law in Chicago. “What happens in almost every case involving the abuse of a dominant position is some combination of a fine and an order to change the behavior in different ways.”
Gina Scigliano, a spokeswoman for Google, didn’t immediately comment on whether Google was told it will face charges.
The Mountain View, Calif., company had sought to avoid fines and sidestep any finding that it violated antitrust laws by trying for two years to reach a settlement with the EU. Negative feedback from rivals forced the EU to abandon such a pact.
Competitors objected to Google’s proposal that they pay for their services to be displayed next to Google’s above search results.
Vestager took a fresh look at the case and pledged to meet with Google and its opponents before deciding the way forward.
For Google, the European market contributes about 35 percent of its revenue, said Carlos Kirjner, a New York-based analyst at Sanford C. Bernstein & Co. Its market share in search exceeds 90 percent in most European markets, compared with about 65 percent in the U.S.
One instrument the EU wields is the right to fine the company as much as 10 percent of its annual revenue. It previously fined Intel 1.06 billion euros ($1.1 billion) and ordered that it abandon price rebates to computer manufacturers that used only its chips.
Microsoft was fined more than 2.24 billion euros ($2.3 billion) in its decadelong antitrust battle with the EU.
Fining Google 10 percent of its annual sales would cost the company $6.6 billion, based on last year’s revenue. That would be among the largest fines levied against a company in this type of case. The EU has never demanded the maximum, however, and such a fine would be easily absorbed by the company’s $64.4 billion in cash, equivalents and short-term investments.
Fines may not be Google’s most difficult challenge.
The EU also can demand that the company change how search results are generated or displayed. That would not only impinge on Google’s autonomy in how it runs its core business but could also slash revenue.
A search for coffee bars in London on Google’s U.K. service, for example, will highlight results for the Google+ feature, which includes data on regional shops. Yelp and TripAdvisor say the Google+ results are unfairly promoted above better information from their own services.
Google needs to change search results that lift the ranking of its own services, said Christoph Klenner, secretary-general of the European Technology and Travel Services Association in Brussels. The EU may insist Google reduce the screen real estate reserved for paid ads to give more website providers a chance to appear among the top results without paying.
Regulators should consider forcing Google to better index other websites to display higher-quality results for rival mapping or news services, said Michael Weber, chief executive of hot-map.com, which was among the original complainants in 2010. Competing visual services like video and maps could be afforded fairer treatment by rotating providers or offering users thumbnails to select their preferred service, he said.
If Google receives a statement of objections, it can defend itself in writing or at a hearing. That process may take months, and a final decision isn’t likely to arrive before next year.
A 20-month U.S. antitrust probe that wrapped up in 2013 concluded that the company was motivated more by wanting to improve its search results and user experience than by a desire to stifle competition. More-aggressive action by the EU may spur similar activity elsewhere, said James Cakmak, an analyst at Monness Crespi Hardt.
“The bigger risk is the potential impetus to other jurisdictions in going after Google,” he said. “If Europe sees any level of success, you could see other jurisdictions try to piggyback off Europe’s efforts.”