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Google Could Face Yet Another Antitrust Complaint

By
Don Reisinger
Don Reisinger
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By
Don Reisinger
Don Reisinger
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June 27, 2016, 11:38 AM ET
FRANCE-INTERNET-GOOGLE
A person prepares to search the internet using the Google search engine, on May 14, 2014, in Lille. In a surprise ruling on May 13, the EU's top court said individuals have the right to ask US Internet giant Google to delete personal data produced by its ubiquitous search engine. AFP PHOTO / PHILIPPE HUGUEN (Photo credit should read PHILIPPE HUGUEN/AFP/Getty Images)Photograph by Philippe Huguen—AFP/Getty Images
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Alphabet’s Google could be in even more antitrust trouble.

The European Union’s competition watchdog is currently marching towards a third antitrust complaint against Google, claiming its advertising services, including the popular AdWords, violates competition rules, Bloomberg is reporting, citing sources who claim to have knowledge of the plans. The sources didn’t say when the charges could be leveled, though competition commissioner Margrethe Vestager said in May that she hoped her office could come to a conclusion on AdWords “within a reasonable timeframe.”

If Google (GOOGL) is slapped with an antitrust complaint, it would be the third in the EU, alone. The company last year was charged with unfairly displaying search results and promoting its own shopping services over competing alternatives. In April, Google was again hit with a formal complaint, claiming it was abusing its power with its dominant mobile operating system Android.

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In both cases, Google has argued it’s innocent, and must soon answer the formal complaint against Android. In April, the EU said that Android’s prominence in Europe, where it holds a dominant market share lead over all others, allows it to impose “restrictions on Android device manufacturers and mobile network operators” that the officials believe, run afoul of competition rules.

The AdWords investigation is actually quite old. The EU announced that it was investigating AdWords in 2011 to determine whether Google was illegally harming other advertising services and funneling marketers into its own search service to the detriment of others. AdWords has been the focal point of the investigation because it offers a service for marketers and companies to advertise their products and services on Google Search.

AdWords runs on Google Search and matches a person’s query with the keywords a marketer might want to target. Those marketers set a budget on how much to spend and Google collects advertising revenue.

Google has been one of the hottest targets for Margrethe Vestager, who only took the job in 2014. In less than two years, Vestager has taken on Google in two cases and now might be planning a third.

For more on Google, watch:

For Google, the stakes are high. Under EU law, if a company is found to have violated antitrust regulations, it could be required to pay up to 10% of its revenue in damages. It’s possible, therefore, that Google could pay more than $7 billion to settle a case.

But that’s just one of many problems Alphabet’s Google is facing. In addition to European scrutiny, a report surfaced in May, saying the the U.S. Federal Trade Commission has also restarted discussions over whether Google has abused its position as the top search engine in the U.S. The agency previously investigated Google on the matter in 2013.

Google declined to comment on the possibility of a third EU antitrust complaint.

Update 06/27/16 at 2:48 p.m. with Google’s decline comment.

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