BRUSSELS—The European Union’s competition regulator is intent on forcing changes to Google-parent Alphabet Inc.’s business practices and levying significant fines for breaching the bloc’s antitrust rules, according to documents reviewed by The Wall Street Journal.
For more than five years, the European Commission has been inspecting Google’s business operations on concerns the Silicon Valley company is abusing its dominance and shutting out rivals in various markets. The investigations have resulted in formal charges in several areas of Google’s practices, including over the company’s conduct with its comparison shopping service and its Android mobile operating system.
According to one of the EU documents, the commission intends to establish that Google and Alphabet have “infringed” on EU antitrust rules, and it will seek to end these actions and fine the companies for the alleged infringements.
The so-called “supplementary statement of objections” issued in July against Google sharpened the EU’s accusations last year that Google uses its dominance in search to favor its own service in the shopping market.
Such charge-sheets are commonly issued in more complex probes to ensure that any final decision can pass legal muster when the decision is inevitably challenged in court.
Google has denied the accusations in the shopping case.
The shopping document also partly sketches out the commission’s demands as to how Google should change its business practices to assuage its antitrust concerns. “Remedies may require Google to position and display competitors’ comparison shopping services in the same way as it positions its own comparison shopping service in general search results,” the shopping charge sheet said.
Google for years haggled with the previous antitrust commissioner Joaquín Almunia about how to present search results in Europe in various attempts at a settlement with the regulator. Those attempts ultimately were rejected by the EU because the bloc sought more concessions from the company.
The second document outlines the commission’s formal charges issued against Google in April, accusing the technology giant of using its Android mobile-operating system to strong-arm phone makers and telecom companies into favoring Google’s search engine and browser on their devices.
The charging sheets were edited to remove commercially sensitive information before they were sent to complainants for their input.
It could take months, or even a year, before the commission reaches a final decision in the open Google cases because the EU has to allow Google the opportunity to challenge the regulator’s accusations and possibly convince the authority otherwise.
“We believe that our innovations and product improvements have increased choice for European consumers and promote competition,” Google spokesman Al Verney said Monday. “We look forward to making our case to the European Commission.”
Google has yet to formally respond to the Android charges and the additional set of shopping charges.
In the Android charge sheet accusing Google of wrongdoing from as early as January 2011, the commission said it “intends to order Google and Alphabet to bring the infringement to an end” and to “set the fines at a level sufficient to ensure deterrence.”
Reuters, citing the documents, earlier reported the commission’s intention to set a deterrent fine in the Android case.
The EU accuses Google of denying access to its Play Store, which has more than one million apps, to smartphone makers that don’t meet its requirements, including making Google the default search engine on their devices.
Google’s share of general searches on mobiles has stood above 90% since 2009 in almost all countries in the European Economic Area, which includes the EU and closely related non-EU countries such as Norway, according to the EU document.
The regulator also charges Google with effectively paying smartphone makers to include only Google’s search engine out of the box. The EU alleges Google withholds lucrative revenue-sharing agreements from device makers that pre-install rival search engines alongside Google on their phones. Users can download other browsers, but the EU says pre-installing a service and setting it as a default creates a lasting advantage.
Google has said its agreements are voluntary and manufacturers can build Android phones without its requirements.
Google could face fines of as much as 10% of the company’s annual global revenue for each of the formal charges issued. The company also could seek to negotiate a settlement in both the Android and shopping cases. Last year, Alphabet reported $74.54 billion in world-wide revenue for its Google segment.
Write to Natalia Drozdiak at [email protected]