Google faced the most serious regulatory threat in its history yesterday after EU officials launched a probe into its market dominance, sparking division among UK tech players about the benefits of the move.
EU competition bosses confirmed they would investigate the US giant over its dominance and whether it abused it to rig Google shopping results. The EU is also probing the group’s Android smartphone system.
Small UK tech firms which have led the charge against Google cheered the move and said rolling back its dominance would spur more innovation and benefit consumers – despite strong support for Google’s initiatives from UK tech industry figures.
Foundem boss Shivaun Raff, who was the first to make a formal complaint to the EU about Google’s practices in 2009, welcomed the probe and said it would curtail the ability to “manipulate its unprecedented power to its own financial ends”.
“It’s a decisive step by the commission,” she told City A.M.
A total of 20 formal complaints have been made to the commission since 2009, sparking yesterday’s decision to investigate Google.
Streetmap, a mapping service which is suing Google in the UK later this year, called the commission’s decision a “good move”.
“Small companies have been damaged and they’re still being damaged. It’s about time the commission took action,” Streetmap commercial director Kate Sutton told City A.M.
Yet other figures from the tech industry, speaking on condition of anonymity, rode to the defence of Google yesterday. “It’s a mixed picture. In some ways they’re a massive enabler and in other ways they shut out the competition,” a tech investor said. “But I’m slightly sceptical the (EU) changes will be enough to make that much difference.”
Another tech entrepreneur said: “The UK is more relaxed about Google. It’s seen as a force for good and the UK government certainly courts them. They do lots of things that benefit businesses. I think Google is a positive influence.”
Google denied the EU accusations and said it had not harmed competition in the online shopping sector. It has 10 weeks to respond the allegations. The EU can fine the group 10 per cent of its annual revenue – $66bn last year – and force the group to amend its search practices.