Why is Google facing European antitrust investigation?

The tech giant prevailed in a Supreme Court challenge to its Google Books project, but European Union regulators are preparing to charge Google with antitrust violations, which could lead to a fine of up to $6 billion. 

Virginia Mayo/AP/File
European Union competition chief Margrethe Vestager speaks during a media conference regarding Google at EU headquarters in Brussels in 2015.

Even as Google attained a victory in the United States Supreme Court on Monday, European regulators prepared to charge the tech giant with market abuse complaints, setting up a case that could cost the company as much as $6 billion in fines. 

"Dominance as such is not a problem," the European Union Commissioner for Competition, Margrethe Vestager, said last week, but "dominant companies have a responsibility not to abuse their powerful market position."

On Monday, Google Books withstood a US challenge from The Authors Guild when the Supreme Court refused to hear the writers group's protest of a 2015 appeals court decision favoring Google. The Authors Guild was one of many groups to speak out against the Books database after it launched in 2004, with many claiming that the digital library of scanned published works violated copyrights.

While Google maintains that the Books directory, which now contains more than 25 million of the world's estimated 146 million "printed and bound" volumes, constitutes fair use under intellectual property law, The Authors Guild contended that the free online library infringes on copyrights.

The 2015 decision, which established Google Books as a "highly transformative" service utilizing "non-infringing fair uses" of copyrighted works, was confirmed by the Supreme Court's refusal to hear The Authors Guild dispute. 

Across the Atlantic, however, Google is facing potentially more serious accusations that it violated European Union (EU) antitrust controls by shutting out competitors through its practices and services.

Ms. Vestager said Monday that Europe's competition commission would be looking into Google's contracts with Android cellphone makers. Google licenses certain applications, such as its Maps and Gmail services, to smartphone makers to include on new devices. That system could cut out rival software on the market even before a mobile phone is purchased, Vestager says. 

"Our concern is that by requiring phone makers and operators to pre-load a set of Google apps, rather than letting them decide for themselves which apps to load, Google might have cut off one of the main ways that new apps can reach customers," she said at an Amsterdam regulatory conference, Reuters reported.

A Google spokesman responded by saying that, "Anyone can use Android with or without Google applications."

"Hardware manufacturers and carriers can decide how to use Android and consumers have the last word about which apps they want to use on their devices," the representative told The Wall Street Journal.

Vestager's move against Google is not her first against the multinational company. Last year, Google faced criticism regarding the market power of its search feature, which the EU commission said favored its own shopping service and granted it "monopoly power." A ruling on that charge could come later this year.

Google is also facing a complaint from News Corporation, filed Monday, which concerns Google’s "scraping" of news content. The media group contends that Google keeps people on its own services and away from original publishers' by showing enough content to discourage Internet users from clicking onto other sites, limiting their revenue and exposure.

News Corp. previously accused Google of piracy in 2014, saying that the company directs "traffic and online advertising dollars" away from publications and to its own services.

In the US, about 70 percent of online searches utilize Google. In Europe, however, that number is even higher: more than 90 percent rely on the search engine, according to the Associated Press. 

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