Europe Can No Longer Put up with Google’s Unfair Business Practices

According to an e-mail sent by Google to its key-employees Tuesday, the company risks a major lawsuit in the E.U. that could result in $6 billion fines and other sanctions.

]The Internet giant angered E.U. regulators because of a series of unfair practices which the company had employed to attract more traffic to its sponsored websites which led to increased revenues from ads.

Google also wrote in its e-mail that a “statement of objections” to the company’s business practices was set to be made public Wednesday by Margrethe Vestager (photo), Europe’s leading antitrust regulator.

European antitrust regulators claim that Google abused its dominant power in the web search business to discourage competition and promote its own services.

Additionally, they suspect that the corporation also designed its popular Android platform for mobile devices to gain an unfair advantage over other similar services. So, Android may also be the subject of an incoming inquiry.

Google recently admitted that its general counsel Kent Walker wrote the letter but declined to provide more details on the matter.

This announcement could herald an incoming legal battle which may end with Google being deprived of 10 percent of its annual revenue, or nearly $6 billion, and forced to tweak its search engine to recommend competition’s websites in Europe.

However, it is too early too speculate. The current state of the affairs is the result of a 5-year long investigation into Google’s practices that may take several more years to be solved if the company chooses to appeal the decisions made by E.U. regulators.

Nevertheless, the allegations are a hard blow for Google’s image which had been promoting a good-guy attitude since its creation in 1998. Mr. Walker warned the company’s employees Tuesday that criticism should be tough.

Thomas Vinje, a spokesperson for FairSearch Europe, one of the groups that had been pressuring the European Commission into investigating Google’s unfair business practices for years, said that a legal complaint against Google would mark a significant step towards ending the company’s dominance on the web-search engine market.

But a definite move towards ending Google’s unfair practices in Europe could also resume a similar move made by the U.S. Federal Trade Commission two years ago. In 2013, the FTC launched a scrutiny on Google’s business model but couldn’t find any critical misbehavior.

Sources familiar with the matter disclosed last month that the agency was planning to sue Google for breaking antitrust laws but the whole deal was dropped as governing commissioners stepped in.

In Europe, Google tried to appease the European investigators and promised to make several concessions on three separate occasions in order to settle the 5-year long antitrust investigation.

But the efforts to reach a truce were made under Joaquin Almunia, Vestager’s predecessor who left office late last year.

Currently, European lawmakers claim that they no longer tolerate Google’s practices as too many people and companies complained that the company deliberately underscores its own services in web search results to the detriment of its competition.

Such unfair practices allowed Google to earn extra revenue from selling ads that produce most revenue by siphoning traffic from other websites that are struggling to promote their own products.

Among the groups that pursued European regulators into making Google accountable for its deeds was Microsoft, which had been also involved in a similar antitrust scandal on the European territory.

Image Source: The Wall Street Journal