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Probe into Google’s Canadian search ad market practices set to conclude

Competition Bureau could announce as early as Wednesday its findings into allegations that the search giant’s business practices are restrictive and anti-competitive

Chris Helgren/Reuters

Canada's Competition Bureau is preparing to conclude its investigation into Google Inc.'s business practices related to search, advertising and third-party access to its services, The Globe and Mail has learned.

A source familiar with the investigation confirmed the bureau has finished the investigative phase of its probe into trade practices that several of Google's advertising and search rivals have called restrictive and anti-competitive. Commissioner of Competition John Pecman could announce the result of the bureau's investigation as early as Wednesday.

Spokesperson Greg Scott would only confirm that the bureau is "currently conducting an ongoing investigation into alleged anti-competitive conduct by Google Inc. in relation to search and search advertising services in Canada. The bureau is obliged by law to conduct its work confidentially. As the investigation is ongoing, it would be inappropriate to comment further at this time."

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Google declined to comment.

In December, 2013, the Competition Bureau filed papers in federal court requesting Google documents related to several areas of its search advertising business. By then, commission lawyers had already concluded a preliminary investigation that suggested there was reason to believe "the manner in which Google operates its search engine and search advertising platforms … amount to an abuse of a dominant position."

It's not known which way Mr. Pecman will rule: The bureau could opt to close its investigation with no call for further action, or announce some form of settlement with Google, or refer the case to the Director of Public Prosecutions for trial.

Google owns almost 90 per cent of the search ad market in Canada, perhaps closer to 95 per cent in Europe. In the United States, it has about 70 per cent of that market.

In January, 2013, the U.S. Federal Trade Commission shut down its own probe into Google's practices after receiving assurances that the Mountain View, Calif., search giant would modify some of its business practices.

Meanwhile, Europe's anti-trust investigation into Google's business practices has reached a critical phase. The European Commission has been examining Google for close to five years and recently politicians in the European Parliament and some member states have demanded that it finish its probe.

In November, 2014, Danish politician Margrethe Vestager was appointed the European Union's new Competition Commissioner. Her arrival has given the investigation a much-needed shot in the arm, according to David Wood, a lawyer who works with the commission on behalf of ICOMP, a sort of European super-lobby that bundles together more than 70 companies, trade associations and consumer groups. Its members include Microsoft Corp., among others like England's Premier League and some online mapping companies.

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"There had been three rounds of settlement talks," all of which the commission rejected before Ms. Vestager's arrival, Mr. Wood says. "None of the European companies involved, other than Google, thought [the proposals] were anything other than worse than the status quo."

Observers expect the 28 EU commissioners could issue their own report, known as a statement of objections, within the next month or two. Google and third parties will have several months to respond in writing, but by the end of the summer Google could be operating under a new set of competition rules in Europe.

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