Alphabet's Google Responds to EU Antitrust Fine

By Natalia Drozdiak Features Dow Jones Newswires

Alphabet Inc.'s Google lashed out against the European Union over its recent record EUR2.42 billion antitrust fine against the company, saying the regulator misstated facts and didn't show sufficient proof that the search giant's conduct hurt rivals, according to a summary of the court appeal the company lodged against the EU.

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Google filed its appeal to the EU court in September, but details of the company's arguments were published Monday in the EU's official journal.

The search giant is contesting the regulator's decision from late June, in which the EU accused Google of abusing the power of its dominant search engine by discriminating against rival comparison-shopping sites in search rankings. Along with the fine, the regulator also ordered the tech giant to revamp its search results in Europe.

Google has to comply with the decision despite its appeal at the EU's top courts, which could take years to play out.

In its appeal to the court, Google argues the EU distorted the facts and erred in its analysis related to the company's shopping ads, which often appear atop search results when a user searches for a product, like "gas grill."

The EU says those ads, which appear before other search results, illegally disadvantage other comparison-shopping services, whose results appear lower down. Google said the EU erred in finding that "treating product results and generic results differently involved favoring, when there was no discrimination."

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The regulator also doesn't demonstrate in its decision that the company's conduct decreased search traffic to rivals, Google said, nor does the EU take account of competition from merchant platforms, like eBay Inc. and Amazon.com Inc.

In its decision in June, the EU said that Google's behavior gave it a 45-fold traffic increase in the U.K. and a 35-fold increase in Germany since 2008, while demotions applied in Google's generic search algorithms led to sudden drops of traffic to rivals of 85% in the U.K. and 92% in Germany.

The EU at the time also said it considered Google and other comparison shopping websites separate from Amazon and eBay, which sell products directly on their website.

Google also said the EU's record fine was "unwarranted" because the regulator based its case on a "novel theory" and had previously sought to settle the case with Google. Google for years haggled with the previous antitrust commissioner Joaquín Almunia about how to present search results in Europe in various attempts at a settlement with the regulator. Those attempts ultimately were rejected by the EU because the bloc sought more concessions from the company, paving the way for the regulator to lodge formal charges against Google.

"The commission will defend its decision in court," an EU spokeswoman said Monday.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

October 30, 2017 14:50 ET (18:50 GMT)