Canada’s Competition Bureau has discontinued its investigation, begun in 2013, into allegations of anti-competitive conduct by Google Inc., contrary to the abuse of dominance provisions of the Competition Act.
While the Bureau raised a few concerns regarding Google’s effect on the Canadian marketplace, its investigation into six sets of allegations did not find that Google used its dominant position in the markets for online search and search advertising in order to exclude rivals.
“Although Google frequently makes changes to the algorithm it uses to rank search results, evidence obtained over the course of the investigation indicates that Google’s changes are generally made to improve user experiences,” says the report.
The three-year investigation focused on allegations of anti-competitive conduct affecting the Canadian marketplace, and involved consultation with industry and economic experts, and saw over 130 interviews conducted with a broad range of market participants, including competitors, publishers and advertisers.
The Competition Bureau went so far as to consult with international counterparts, including the American FTC and the European Commission, and to analyze large volumes of information, which was obtained under a Federal Court order and collected from stakeholders and supplied by Google.
“Data‑driven companies play an important and growing role in Canada’s economy,” said John Pecman, Commissioner of Competition. “We will continue to monitor firms in the digital economy to ensure they do not engage in anti-competitive conduct. Should new evidence come to light of anti-competitive conduct that may affect the Canadian marketplace, by Google or any other market participant, I won’t hesitate to take appropriate action.”
Of the allegations leveled against Google, the Competition Bureau’s Commissioner found evidence supporting only one of the allegations against Google, namely that it used anti-competitive clauses in certain contracts, with the intention of excluding competitors, which had a negative effect on advertisers.
In particular, the Commissioner’s report found that “practices related to the AdWords API Terms and Conditions, was engaged in for an anti‑competitive purpose and/or that the conduct substantially lessened or prevented competition in Canada. In respect of its AdWords API Terms and Conditions, Google has provided a commitment to the Commissioner that resolves his concerns.”
The FTC ended a similar anti-trust investigation three years ago, which saw the company respond to similar concerns by dropping the problematic clauses and agreeing not to reintroduce similar clauses.
Google has agreed to the same conditions in Canada, particularly as it pertains to an English-language contract having an effect on its French-language counterpart.
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The withdrawal of these clauses should offer more flexibility for advertisers who want to use competing platforms and create more competition in the search advertising market.
“We’re pleased that the Canadian Competition Bureau has decided to end its inquiry,” said Kent Walker, senior vice president and general counsel of Google Inc. and Alphabet Inc. “We work hard in a competitive landscape to create a great experience for our users and help them quickly and easily find what they need from Google.”
In January, Google Canada unveiled its new Kitchener, Ontario headquarters, with Prime Minister Justin Trudeau in attendance.
The Google Canada team has worked on Google Fiber, Conversion Optimizer, Doubleclick AdExchange, Mobile Gmail, Mobile Docs, Chrome, Chrome OS and commerce products like Shopper.
In Europe, Google’s parent company Alphabet is set to be charged by European antitrust regulators investigating the company’s use of apps on Android devices to stifle competition in the mobile advertising market.
If the EU investigators are successful in their prosecution, fines amounting to $7.4 billion, or 10% of Google’s 2015 revenue, could be levied against the company.