By Natalia Drozdiak in Brussels and Sam Schechner in Paris
Alphabet Inc.'s Google on Thursday hit back at European Union accusations that it abuses its dominant position with its internet shopping and advertising services, ramping up its fight back against the bloc's regulators.
With its formal response to the EU's antitrust charges, Google is digging in its heels against the bloc's accusations it abuses its dominance and has shut out rivals in various markets with a number of its products.
The EU's antitrust charges potentially expose Google to billions of eurosin fines and demands that it overhaul its operations at a time when the Silicon Valley giant is also grappling with a barrage of other legal fights in Europe.
On Thursday, Google again defended the way it places retailers' ads for products on some of its search results by saying there is no evidence that those ads hurt price-comparison websites. The company contends that the commission looked at too small a set of rival sites, and argues that on mobile devices most people shop with dedicated apps anyway.
"The Commission's revised case still rests on a theory that doesn't fit the reality of how most people shop online," said Kent Walker, Google's general counsel, in a blog post dedicated primarily to the company's response to the EU's shopping charges.
A European Commission spokeswoman said it had received the company's replies, adding that it would consider the responses carefully before taking any decision.
Google lastyear rebuffed the EU's first set of shopping charges, saying the commission failed to take into account the fast growth of companies like Amazon.com Inc. and eBay Inc.
The commission circled back this July with an extra layer of charges in the shopping case, sharpening its argument that Google's comparison shopping service operates in a market separate from those e-commerce platforms -- an argument Google again rejected.
The company also contends that the commission looked at too small a set of rival sites, and argues that on mobile devices most people shop with dedicated apps anyway.
In separate charges, the EU in July also accused Google of breaching EU antitrust rules by restricting how a website that offers a Google search function can show advertisements sold by other companies.
Google is gearing up for a potentially long legal fight with the EU and other regulators in the region.
In the coming days, Alphabet is also expected to fire off its response to another set of EU charges issued in April over the tech giant's conduct with its Android mobile operating service -- allegations that threaten to undermine how Google makes money from mobile devices, which have rapidly become users' primary portal to the internet.
The antitrust battle comes as authorities in France, Spain and Italy are pursuing Google for allegedly unpaid taxes, and the company is also currently in court against France over an order from the country's privacy regulator to apply the "right to be forgotten" globally. The company may also take another hit with a recent EU copyright proposal designed to help news publishers negotiate payment when aggregators like Google post snippets of their articles online.
In response to the EU's shopping charges, Google said it rejects the commission's proposed solution of providing what the company called subsidized advertising space for price-comparison sites, instead of the retailer ads that Google's usually shows. Forcing Google to place competitors' product ads in its search results "would just subsidize sites that have become less useful for consumers," Mr. Walker said.
In the separate advertising case, the EU is leveling charges at a relatively narrow slice of Google's business called Adsense for Search, whereby Google allows other companies to embed Google search boxes on their own sites. Companies either pay Google to use its search boxes, or they allow Google to place ads in the results, and split the revenue.
The EU accuses Google of restricting how third-party websites can use search ads from other companies when using the search bar and, in some cases, banning competitors' search ads altogether.
On Thursday, Google said its AdSense for Search business has always faced competition from rivals like Microsoft Corp., adding that the company phased out complete exclusivity requirements for Google ads in its AdSense for Search contracts in 2009.
It isn't clear how much revenue Google earns from AdSense for Search, but its broader business of selling ads on other companies' websites hauled in $7.4 billion -- or about 18% of its overall revenue -- in the first half of 2016.
Write to Natalia Drozdiak at firstname.lastname@example.org and Sam Schechner at email@example.com
(END) Dow Jones Newswires
November 03, 2016 12:27 ET (16:27 GMT)
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