Google is expected to face antitrust charges in Europe

The European Commission is poised to accuse Google of using its dominant position in online search to favor the company’s own online services over others in what would be one of Europe’s biggest antitrust cases since regulators went after Microsoft.

Europe’s competition chief, Margrethe Vestager, is expected to make an announcement Wednesday in Brussels that Google has abused its dominant position, according to two people who spoke Tuesday on the condition of anonymity.

The decision to push ahead with a so-called statement of objections is the latest twist in the long investigation into Google’s activities in Europe, where it holds a roughly 90 percent share in the region’s search market. If Europe is successful in making its case, the U.S. tech giant could face a huge fine and may be forced to alter its business practices to give smaller competitors such as Yelp greater prominence in its search queries.

A representative for Google declined to comment.

The investigation has dragged on for nearly five years at the European Commission without formal charges or a negotiated settlement. That delay has prompted criticism that the region’s most important antitrust enforcer has been going too easy on Google.

Europe’s focus of investigation is whether Google has abused its search engine’s large market share by favoring its own products. The search engine is more dominant in Europe than in the United States, where competitors such as Microsoft’s Bing still hold a sizable market share.

Vestager, a Danish politician who took over as Europe’s top antitrust official in November, will travel to Washington later this week, where she is expected to meet senior justice officials and participate in antitrust conferences.

More than two dozen companies and organizations have filed antitrust complaints in Europe against Google. Many are in Germany, where powerful publishing groups and online firms have called on the European regulator to stop the U.S. search giant from blocking competition in sectors such as online mapping, travel services and shopping.

“The EU competition commissioner, Margrethe Vestager, will decide what steps they want to go,” Guenther Oettinger, a German politician who is charge of Europe’s digital economy, told Die Welt am Sonntag, a German newspaper, on Sunday. “I think that they will be far-reaching.”

If Google fails to rebut any formal charges, Vestager could levy a huge fine that could go above 6 billion euros ($6.4 billion), amounting to about 10 percent of Google’s most recent annual revenue. The largest single fine yet levied in such a case falls well short of that mark — 1.1 billion euros in 2009 against Intel for abusing its dominance in computer chips.

The commission previously spent years reining in Microsoft, which accrued a total of almost 2 billion euros in European fines over a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.

Google still could settle the matter. But whatever the search giant might negotiate with the commission, analysts say the deal will have a greater effect on its business than previous attempts to settle. Vestager’s predecessor, Joaquín Almunia, gave Google three opportunities to make concessions that were aimed at allowing the company to escape both a fine and a formal finding of wrongdoing.

Those settlement efforts repeatedly ran afoul of Google’s rivals, including U.S. companies like Microsoft and Yelp, which successfully complained that most of the changes proposed by Google have been insufficient to solve the antitrust concerns identified by regulators.

“Everyone should have equal treatment,” said Thomas Vinje, a lawyer for FairSearch Europe, which represents rivals to Google. “Google should apply its own algorithm fairly to everything, including its own services.”

Vestager has come under pressure from the European Parliament to hasten a decision after lawmakers passed a nonbinding resolution last year calling on her to consider breaking up Google.

The antitrust case is among several regulatory headaches that the search engine faces in Europe. Local policymakers have also criticized the company for its tax practices and how it manages people’s online privacy.

This story was originally published April 14, 2015 at 7:21 PM with the headline "Google is expected to face antitrust charges in Europe."