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Spokane, Washington  Est. May 19, 1883

EU alleges Google’s abuses hurt consumers, innovation

European Union’s competition chief Margrethe Vestager listens to questions during a media conference at EU headquarters Wednesday in Brussels. (Associated Press)
Raf Casert And Michael Liedtke Associated Press

BRUSSELS – The European Union’s escalating legal attack on Google is likely to ignite a debate about whether the Internet search leader makes life more convenient for consumers or abuses its power to squeeze out rivals who might have something better to offer.

The contrasting views of Google’s business practices came into sharper focus Wednesday after Europe’s antitrust regulators challenged the Mountain View, California, company on two different fronts.

Drawing upon a nearly five-year probe, the regulators filed a complaint alleging that Google has been improperly favoring its own shopping comparison service in its search results. The charges could still be expanded to include other services highlighted in Google’s search results, such as travel recommendations and merchant reviews, mounting a challenge to the digital advertising system that generates most of the company’s revenue.

As if that blow wasn’t enough, Europe’s regulators also announced they are opening a separate inquiry into whether Google has been illegally using its popular Android software to bully smartphone and tablet makers to feature Google’s products on their mobile devices.

Google staunchly denied any wrongdoing, setting up a showdown that could still take years to resolve. The company has 10 weeks to respond to Wednesday’s complaint.

Here are a few things to know for now.

Good or bad for consumers?

For now at least, Europe’s case is focused on Google’s shopping comparison service, known as Google Shopping, which shows various products and prices when consumers make a search request indicating they are looking to buy something.

Google Shopping consistently ranks at the top of Google’s search results page to the detriment of competitors, including U.K.-based Foundem and Ciao, owned by Microsoft. Those rivals are among the companies that spurred the EU’s investigation into Google.

Regulators allege Google elevates its shopping service even when other options might have better deals. They maintain that Google Shopping is getting favorable treatment because the company wants it to succeed, unlike “Froogle,” which wasn’t pushed to the top of the search rankings.

Google maintains it is just trying to package its search results in a way that makes it easier for consumers to find what they want.

But Google’s shopping comparison service doesn’t include all products in any category. Google began locking out some merchants in late 2012 when it began requiring an upfront payment – the equivalent of an ad – to be included in the index of the shopping comparison service.

“People don’t realize there’s a pay-to-play element of Google Shopping,” said William Poundstone, author of “Are you Smart Enough to Work at Google?” “People tend to assume it’s more of a level playing field than what it really is.”

Power play

The popularity of Google’s search engine is the main reason why European regulators are trying to force the company to change its ways. Google processes about 90 percent of the searches in the EU, compared to 66 percent in the U.S.

“Dominant companies have a responsibility not to abuse their powerful market position,” said Margrethe Vestager, the EU’s competition commissioner. She contends Google is limiting the choices of European consumers and stifling innovation among smaller companies.

Google said people use its search engine because of its reputation for delivering the best results.

The company also points out that it is facing more competition than ever, including: other search engines such as Microsoft’s Bing and DuckDuckGo; e-commerce sites such as Amazon.com and eBay; mobile apps; and relatively new networking tools such as Pinterest.

European regulators are taking a different tack than their U.S. counterparts. In 2013, the Federal Trade Commission settled an antitrust investigation into the market power that Google wields through its search engine without requiring the company to make any major changes.

That means whatever happens in Europe might not necessarily change the way that Google does things in the U.S., tough company critics such as the group Consumer Watchdog are urging the FTC or Justice Department to take another look.