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EU Officially Strikes at Google on Shopping Service, Android

It's official: The EU has filed a complaint against Google for its shopping product and launched a probe into anti-competitive behavior on Android.

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The European Union officially accused Google of violating antitrust laws, claiming it abused its dominance in search to favor its shopping results. Regulators also launched a fresh probe of Android, investigating whether Google intentionally stifled rival mobile operating systems.

The pair of actions strike at the core of two increasingly vital components of Google’s business: Its vertical integration of search — allowing consumers to gravitate easily from online queries to Google’s offerings, like travel booking and insurance — and its push to tighten the reins on Android.

On search, the EU filed a statement of objection, a preliminary legal argument, charging Google for prioritizing its own results in its online shopping service over competitors. It’s a case Google thought it put to rest last year. The Mountain View, Calif., company now has ten weeks to respond before formal charges are made.

“Dominance, as such, is not a problem — not in general, and not under EU law,” Margrethe Vestager, the EU’s competition commissioner, said onstage. “However, dominant companies have [a] responsibility to not abuse their position by restricting competition.”

The commission could fine Google up to 10 percent of its annual revenue, or more than $6 billion.

Vestager, a Danish politician, claimed she has given the long-simmering Google case a “very high priority” since taking the antitrust helm in November. She insisted the regulator is neither demanding that Google alter its algorithm nor punishing Google for its overwhelming search supremacy. Still, while the initial complaint is restricted to shopping, it may not end there. “We will continue to look at Google’s content in other areas,” Vestager said, mentioning Google’s services for flight and hotel searches, as well as Google Maps. ”If an infringement is proven, a case focusing on comparison shopping could potentially establish a broader precedent for establishing EU competition rules in other instances of Google favoring its own services.”

The antitrust investigation, now in its fifth year, is often considered the result of political pressure from Google’s far smaller European rivals. Vestager stressed that the case is not parochial, claiming that a quarter of the complainants in the case are U.S. companies.

On Android, the EU probe will dig into deals with smartphone and tablet manufacturers that require exclusive pre-installation or bundling of Google’s software services. Also, the EU will look into Google’s restrictions on modified, or forked, Android.

In recent years, Google has increased the demands it makes of hardware partners running Android, a bid to seize more control over the disparate operating system world. Google settled similar charges with the FTC (and in Korea) in 2013. In response to the EU probe, Google is likely to point to the app bundle deals companies like Facebook and Microsoft also strike.

Asked if the charges could expand to other Silicon Valley companies operating in Europe, Vestager struck a conciliatory note. “For me, the road is open,” she said. “I want to hear what Google has to say.” Google, as Re/code reported yesterday, is planning to say something defensive. On Wednesday morning, Google released statements on the Android probe and the search charges. Amit Singhal, VP of search, wrote that the company “respectfully but strongly disagree[s]” with the EU’s objections and plans to make its case.

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