Google Responds To European Union Investigation Over Antitrust Laws

The European Union on Wednesday formally accused Google Inc GOOG GOOGL of abusing its market dominance in web search.

The E.U.'s competition commission said that Google would have to face legal consequences and change the way it does business in Europe if an investigation confirms allegations that Google diverts traffic away from its rivals in favor of its own products and services in areas including shopping, travel and mapping.

Following the formal accusation, Google's Senior Vice President of Search Amit Singhal responded in a blog post.

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Travel Allegations

Google noted that allegations were brought to the spotlight following its acquisition of the flight search provider, ITA in 2010. The company added that several online travel companies unsuccessfully lobbied U.S. and E.U. regulators to block the deal, citing Google's ability to directly show flight options in its search engine would drive traffic away from their businesses.

Singhal stated that despite its acquisition of ITA, Expedia, Orbitz, Priceline and Travelocity account for 95 percent of the U.S. travel market, thereby refuting any claims of abusing its search engine.

Shopping Allegations

Singhal stated that there "a ton" of specialized shopping services including Amazon.com, Inc., eBay Inc and Axel Springer's Idealo who rank as the top three most popular shopping services in Germany. In fact, Zalando, a German based shopping site, went public in 2014 in one of Europe's largest tech IPOs.

Outside of Germany, the blog argued that Google's shopping results have not the harmed the competition as total unique visitors to many online shopping sites outrank Google Shopping in countries like France and the United Kingdom.

Bottom Line

"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 wrote. "Yet that is exactly what's happening in our world."

"It's why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead."