The European Commission (EC) has officially accused Google of anticompetitive behaviour by abusing its dominance in the search market in Europe. Google has already said that it "strongly disagrees" with this assessment.
The decision - officially called a Statement of Objections - marks the latest stage in the EC's long-running investigation into Google, and could lead to major fines if the company does not make changes that satisfy the EC.
The EC has also confirmed that it will open an investigation into Google's Android operating system after concerns that the firm unfairly unbalances the market by using the platform to favour Google services at the expense of others.
Margrethe Vestager, EU commissioner in charge of competition policy, said it is vital that the EU is able to apply its rules to major firms to ensure that the market is not unfairly balanced.
"In the case of Google I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules," she said.
"Google now has the opportunity to convince the Commission to the contrary. However, if the investigation confirms our concerns, Google would have to face the legal consequences and change the way it does business in Europe."
Specifically the EC has concerns over the way in which Google displays its own shopping results in search results.
“Google artificially favours its own shopping service and this constitutes an abuse," she said at a press conference announcing the EC's decision.
Google has 10 weeks to respond to the EC's Statement of Objections.
In response, Amit Singhal, senior vice president of Google Search, wrote a detailed blog post outlining why Google believes the EC stance is wrong.
“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,” he said.
Singhal also used several detailed graphs to show that Google believes its entry into the shopping comparison market - the main thrust of the EC’s complaint - has not unbalanced the market, and that it continues to thrive.
“Companies like Axel Springer, Expedia, TripAdvisor and Yelp (all vociferous complainants in this process) have alleged that Google’s practice of including our specialised results (Flight Search, Maps, Local results etc.) in search has significantly harmed their businesses," he wrote.
"But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.”
The graph below shows visitor traffic data for key shopping sites in the UK, shared by Google, to outline its argument. It also shared similar data for Germany and France.
On the decision to open a probe into Android, Vestager said it was important to ensure that devices used by millions of people do not unfairly favour one firm at the expense of others.
"Smartphones, tablets and similar devices play an increasing role in many people's daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company," she said.
One area of concern is the way Google puts pressure on manufacturers to include Google apps within Android when adding the OS to smartphones, specifically search services, and not being able to use rival services.
The move by the EC comes after years of back and forth as Google attempted to allay Europe's concerns and avoid formal action. However, this has proved difficult to achieve.
The EC told Google in September that it needed to make more search concessions to appease concerns that the firm abuses its dominant market position by placing search results for its own services higher than rivals'.
This was a marked change in stance after the EC had originally accepted Google's third round of concessions. But others, such as European publishers, voiced their fears that the concessions would not improve anything.
A group of MEPs even tabled a resolution for companies with web and search offerings, e.g. Google, to be broken up if their market dominance becomes too great.
This is unlikely to happen to Google, but the vote will have put more pressure on the EC to act against Google with a firm hand.
In a speech last week Vestager, while not commenting directly on the Google case, did outline her desire to take a tough stance against any firm that infringes on the rights of consumers in Europe, regardless of location.
"We are indifferent to where the companies involved happen to be headquartered. This is the important part: that the same rules apply to all," she said.
"This is how we have traditionally enforced competition rules in Europe and this is how we will continue to enforce them on my watch."
The EC has long had concerns about Google's dominance in the European market. Oettinger noted last year that he wants to rein in the firm's power in key areas of the market.
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