Google is being forced to make a big strategic choice over the future shape of its business after Europe’s top competition enforcer demanded it change its ways or face big fines.
Joaquín Almunia, the EU’s competition commissioner, issued the ultimatum after privately deciding his 18-month investigation into the US internet group had uncovered abuses of dominance that would warrant charges.
Before formally accusing the group of an infringement, Mr Almunia has given Google “a matter of weeks” to propose changes that will address his antitrust concerns.
The demand leaves the company at a turning point. It could respond and offer concessions to accusations of wrongdoing that it thinks are wrong, or fight the commission in a legal battle that could drag on for years.
Eric Schmidt, Google’s executive chairman, made clear his reluctance to budge. “We disagree that we are in violation until they are more precise on what area of the law we are in violation of. Give us the precise data, the precise problem,” he said.
The Commission has the power to fine Google up to 10 per cent of its global revenues and force it to change its behaviour or restructure, without requiring a court order.
To address the Commission’s concerns, Google would need to make changes to fundamental elements of its company. Mr Almunia is worried that it favours its own products in search results, copies information without permission and shuts out rivals in the advertising market.