Google Could Be a Day Away From At Least $1 Billion EU Antitrust Fine -- 2nd Update

By Natalia Drozdiak 

BRUSSELS--The European Union's antitrust watchdog will as soon as Tuesday hit Alphabet Inc.'s Google with a fine of more than EUR1 billion ($1.12 billion) and demand changes to the company's business practices, according to people familiar with the matter.

The European Commission, which has for roughly seven years been investigating Google for breaching the bloc's antitrust rules in various areas, is poised to announce as soon as Tuesday that Google has manipulated search results to favor its own comparison-shopping service. Other formal EU probes into Google's behaviors with its Android mobile-operating service and AdSense advertising service are continuing.

The antitrust penalty against Google is expected to surpass the EU's previous record fine imposed on a company for allegedly abusing its market position: EUR1.06 billion against Intel Corp. in 2009.

"We continue to engage constructively with the European Commission and we believe strongly that our innovations in online shopping have been good for shoppers, retailers and competition," said Google spokesman Al Verney.

The EU will also likely demand Google give rival comparison shopping services such as Foundem.co.uk and Kelkoo.com Ltd. equal treatment in its search results. Complainants in the case allege that Google both demotes competitors' offerings in search rankings and artificially inserts its own service in a box above all other search results, regardless of their relevance.

A decision in the comparison-shopping case could create precedents for Google's behavior with its other search services, such as travel and maps, which the EU is also scrutinizing.

The move against another powerful American company is likely to stoke accusations across the Atlantic that the EU disproportionately targets American companies, especially tech firms, to protect its own European-grown industries. The European Commission has already hit Apple Inc., Facebook Inc. and Starbucks Corp. with various decisions for breaching the bloc's competition rules, hitting their financial accounts. The regulator also continues to probe McDonald's Corp. and Amazon.com Inc. for allegedly not paying enough taxes in Europe.

In the Google case, some large U.S. companies, including Yelp Inc., complained alongside European firms to the EU about the company's behavior in the hopes that Brussels would take action.

Microsoft Corp. initially also took part but hasn't been lobbying against Google in Brussels after the two companies ended a long-running feud last year.

News Corp, owner of The Wall Street Journal, has also formally complained to the EU about Google but over the company's handling of news articles on its search service.

U.S. antitrust authorities in early 2013 decided to end their own investigation into the company after Google agreed to some voluntary changes to its practices.

Write to Natalia Drozdiak at [e-mail]

(END) Dow Jones Newswires

June 26, 2017 05:15 ET (09:15 GMT)

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