Google’s early response to EU antitrust charges: Competition abounds

It’s official: Google is facing formal antitrust charges in Europe. The European Commission has given Google 10 weeks to respond to charges that the Silicon Valley giant is abusing its position in search.

The charges involve two main issues. The EU says Google is favoring its own shopping services in search results. The commission also is looking into the bundling of Google services on Android mobile devices.

Here’s a breakdown of Google’s public response so far, taken from today’s blog posts by Amit Singhal, senior vice president for Google Search, and by Hiroshi Lockheimer, VP of Engineering for Android:

Google says there’s plenty of competition, from rival search engines to shopping sites to other apps that compete with Google’s on the Android mobile operating system.

“Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating — or dominated by one player,” Singhal writes. “Yet that is exactly what’s happening in our world.”

Addressing the shopping-comparison charges, Singhal presents charts that show website traffic to the Germany, France and U.K. sites of companies such as Amazon, eBay, Etsy and more. In each of the three countries, there was considerably more traffic to the Amazon and eBay sites than there was to Google’s.

He also singles out other competitors and challenges their claims that they have been hurt by Google.

Companies like Axel Springer, Expedia, TripAdvisor, and Yelp (all vociferous complainants in this process) have alleged that Google’s practice of including our specialized results (Flight Search, Maps, Local results, etc.) in search has significantly harmed their businesses. But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.

• Yelp calls itself the “de facto local search engine” and has seen revenue growth of over 350% in the last four years.
• TripAdvisor claims to be the Web’s largest travel brand and has nearly doubled its revenues in the last four years.
• Expedia has grown its revenues by more than 67% over the same period — and recently told investors: “We’re seeing increased traffic coming through Google Hotel Finder. It is ­clearly getting more exposure. And in general … the product continues to improve. And Google has invested in it, we’ll continue to invest in it … From our standpoint, we’re happy to play in any market that Google puts out there and over a long period of time, we have proven an ability to get our fair share in the Google marketplaces.” (Remarkable given their complaints).
• Axel Springer continues to invest in search, including the French search engine Qwant, because as the company told investors, “there is a lot of innovation on the search market”.

Singhal also points to other Internet companies as search competitors: Facebook, Pinterest, Amazon.

As for Android, Lockheimer touts it as a purveyor of choice, saying the open-source mobile OS has helped spur the mobile revolution.

The EU is questioning whether Android’s agreements with mobile device makers give Google services an unfair advantage on the devices.

“Apps that compete directly with Google such as Facebook, Amazon, Microsoft Office, and Expedia are easily available to Android users,” Lockheimer writes. “Indeed many of these apps come pre-loaded onto Android devices in addition to Google apps. The recent Samsung S6 is a great example of this, including pre-installed apps from Facebook, Microsoft, and Google.”

And in case you thought Apple wouldn’t get a mention: “And in comparison to Apple — the world’s most profitable (mobile) phone company — there are far fewer Google apps pre-installed on Android phones than Apple apps on iOS devices.”

 

Photo from Getty Images

 

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