BY FOO YUN CHEE
BRUSSELS - Google is likely to face
its first European Union #antitrust_sanction this year, with little prospect of
it settling a test case with the bloc's regulator over its shopping service,
people familiar with the matter said.
There are few incentives left for
either party to reach a deal in a six-year dispute that could set a precedent
for Google searches for hotels, flights and other services and tests
regulators' ability to ensure diversity on the Web.
Alphabet Inc's Google, which was
hit by a second EU antitrust charge this month for using its dominant Android
mobile operating system to squeeze out rivals, shows little sign of backing
down after years of wrangling with European authorities.
Several people familiar with the
matter said they believe that after three failed compromise attempts since
2010, Google has no plan to try to settle allegations that its Web search
results favor its own shopping service, unless the EU watchdog changes its
stance.
Such a change of heart appears
unlikely, with European Competition Commissioner Margrethe Vestager -- a Dane
whose team is leading the Google investigation -- showing little interest in
reaching a settlement where there is no finding of wrongdoing or a fine against
the company, other people said.
Underpinning Vestager's tough
approach, and the Commission's case, are scores of complaints from companies,
big and small, on both sides of the Atlantic.
Alphabet shares were flat at 1824
GMT.
MICROSOFT'S SHADOW
For Google, which has denied any
wrongdoing, the stakes are high. Some rivals are convinced that any fine is
effectively a cost of doing business and it has more to gain in profit from its
existing business model than conceding to complaints.
The European Commission declined
to comment.
"From a pure profitability
perspective, it is better off dragging out the competition case, continuing its
practices for as long as possible, and ultimately paying a fine that will be
smaller than the profits it generates by continuing the conduct," Thomas
Vinje, a lawyer who advises several of Google's competitors, told Reuters.
However, some sources said they
see last week's low-key pact with arch-rival Microsoft to withdraw all
regulatory complaints against each other as a signal that Google might in time
choose to strike a deal with Brussels.
By doing so it would avoid a
repeat of Microsoft's damaging fight with the European Commission and by
settling at least its dispute with the EU over Internet shopping might also
head off possible actions by other regulators.
One source said it was too early
for Google to rule anything out or in regarding the EU case.
To date, Google has a mixed record
in taking on regulators globally, winning some battles and losing others.
However, Microsoft offers a
salutary lesson to those who want to take on the Commission, Ioannis Kokkoris,
a law professor at Queen Mary University of London, said.
Microsoft ended up with fines of
more than 2.2 billion euros ($2.5 billion) after a decade-long battle with the
Commission.
"You are entering a long
battle, an expensive battle. And if you go to court, the outcome would not
necessarily be better," Kokkoris said.
(Editing by Alexander Smith)
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