Google facing force of aggressive E.U. regulators

View Photo Gallery — Google’s moves toward dominance: A look at some of the major deals the Web giant has made or attempted in an effort to expand its reach.
By Craig Timberg
Published: July 22

BRUSSELS — Europe may be a financial disaster and a faded military force, but in at least one arena it has emerged as champ: Regulators here are challenging the power of America’s technology titans. And they are winning.

Google is most squarely in the crosshairs as its officials negotiate furiously in hopes of avoiding a $4 billion fine and a formal ruling that it has abused its dominance in the search market to hurt rivals across a range of industries. A deal could be days away.

Facebook, Apple and Microsoft also have faced serious scrutiny from European regulators in the past year. And even if Google succeeds in settling the sprawling antitrust case here, it is facing investigations into its new privacy policy and its Android operating system for phones and tablets.

Many of these issues, including the antitrust case against Google, also have been investigated by American regulators. But the laws here are stricter, the fines bigger and the courts more supportive of aggressive government action — to the point that many experts say the legal landscape of the technology industry is being shaped more profoundly here than in the United States.

“The pipeline is packed with these cases,” said Nicolas Petit, a professor at Belgium’s University of Liege Law School who watches the technology industry closely.

Whether Google gets labeled a monopolist is largely in the hands of Joaquin Almunia, a former Spanish labor leader and onetime Socialist candidate for prime minister who is the European Union’s top antitrust enforcer.

Almunia has pushed hard for a negotiated settlement in hopes of avoiding a years-long battle of the type that European regulators once waged with Microsoft over its Windows operating system. People closely watching the Google case predict that this week — the last before a long summer break hobbles operations here — will produce a deal or a formal “statement of objections,” essentially an indictment on allegations of monopolistic behavior.

Almunia said that a negotiated deal would be a better outcome and that the company’s proposals — there have been at least two rounds of them this month — are seeking to address the issues he has raised rather than disputing them.

“What was Google’s motto at the beginning? ‘Don’t be evil?’ ” Almunia said in an interview at his office here, the headquarters of the E.U. “I hope it continues to be important.”

The case is being tracked by regulators worldwide, including at the U.S. Federal Trade Commission, which has hired a prominent lawyer to lead its antitrust investigation of Google.

"We continue to work cooperatively with the European Commission," said William Echikson, a Google spokesman in Brussels.

Risk to Google

Almunia already has determined that the Google antitrust claims merit serious treatment, given that the company has more than 90 percent of the search market in some European countries. But having a monopoly is not a violation of law here; a company must abuse its dominance of a market to run afoul of regulators.

Almunia’s office has outlined four potential abuses of dominance in preliminary filings. In the interview, he expressed particular concern that Google may be altering its results in a way that keeps users from having access to the best possible services, especially ones that compete with Google’s offerings.

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