EU Commission's Antitrust Probe Into Google Focuses On Niche EU Competitors

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The European Commission has launched an investigation into Google after three vertical search engines submitted formal complaints that the firm had use its dominant position to crowd out and disappear results from these engines – as reports various outlets including Bloomberg and the BBC.

The EU is obliged to look into whether Google has purposely lowered the search rankings of price comparison sites Foundem (UK) and Ciao (owned by the Microsoft’s Bing), and French legal search engine ejustice.fr in its results.

The EU investigatation will also take in Google’s ad platform, which covers Google’s unpaid and sponsored search results and “an alleged preferential placement of Google’s own services.”

We’re going to take a look at what all this means.

The European Commission will look at whether Google “imposes exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their websites, as well as on computer and software vendors, with the aim of shutting out competing search tools.”

Specifically, whether Google has:
• has abused a dominant market position in online search by lowering the ranking of unpaid search results of competing services;
• accords preferential placement to the results of its own vertical search services and in so doing shuts out competing services; and
• lowered the ‘Quality Score’ for sponsored links of competing vertical search services, the Quality Score being one of the factors that determines the price paid to Google by advertisers.

The backround to this is that Ciao, Foundem and Ejustice.fr filed an antitrust complaint against Google in back in February. This is separate from any other EU probe Google’s has had over its StreetView service – that’s about privacy.

Google’s defending statement is that it has marked ads properly and will be “working with the Commission to address any concerns.” Of course, it has to say that. In private, our sources say Google dealt with a lot of these issues some time ago – and indeed it is under an obligation to keep out spammy links from lame ‘shopping’ search engines.

The matter is particularly sensitive for European startup search providers since there is often a view among them that Google feels it can get away with doing some things in small European markets, away from the harsh gaze of SIlicon Valley’s media.

Foundem’s view is that Google is “stifling innovation” and “should not be allowed to discriminate in favor of its own services” and should label its own services in search results.

Indeed, there is even a European trade organisation called ICOMP (Initiative for a Competitive Online Marketplace). Their legal council, David Wood, welcomes the probe as a “thorough investigation is necessary to determine the workings of Google’s black box.”

Now, although the EU can impose a fine of up to 10 percent of revenue for monopoly abuses (the EU’s took $1.38 billion from Intel Corp. last year) the likelihood of this investigation a) coming down hard on Google or b) levying a fine is pretty unlikely and even if this happened, the fine would probably be restricted to its European markets. For instance, in September the Commission closed an investigation into Apple after it introduced cross-border iPhone warranty repair services within the EU. It shows that the Commission is, in practice, often prepared to play ball and horse trade.

But the fact its launched this investigation does flag that Google will have to step up to the plate and answer the charges in a formal and legal manner.

  • http://jetlib.com/news/2010/11/30/eu%e2%80%99s-antitrust-probe-into-google-focuses-on-niche-local-search-engines/ EU’s Antitrust Probe Into Google Focuses On Niche Local Search Engines | JetLib News

    […] Read the rest of this entry » […]

  • http://twitter.com/ianmcnaught ianmcn

    The accusation of purposefully lowering google ranking is huge, if true it would seriously undermine the credibility of Google’s search index, their key asset.

    • David

      No it doesn’t, Google is entitled to an editorial process for it’s results, it can be very helpful in increasing result quality. I am not saying that they do that I’m just saying that they are allowed to, and that they should.

      • http://twitter.com/ianmcnaught ianmcn

        Of course they are allowed to do that, but Google isn’t a human curated search index, its results are determined automatically through their ragerank algorithm. That is what has always given their results such credibility, hence why they would loose this if the accusations are true.

      • alex

        ha! ragerank – awesome!

  • http://www.picturetheuk.com James Penman

    I’m amazed that these investigations are still ongoing. We ran a UK shopping engine 2004-2008 with over 4 million products. Initially, the site was sent millions of free uniques a year via Google and, in many cases, our results were above those of Comet, Dixons etc in organic search listings. We were listed above those retailers supplying the data feeds. Then, over a period of a couple of months, the traffic just dropped away. Clearly, annoying at the time but in hindsight Google were, and remain, right. Duplicate info, commodity info, spam, call it what you want.

  • SecrDig

    http://www.SecrDig.com/
    Here you can say your secret out,

    secrets will be automatically announced to Twitter,

    but they are anonymous….xDD

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  • bingfan

    There is one big difference between the Google services that rank better than competitors’: inclusion is free. So if you don’t add a tracking link to your search engine Google will index it like it’s own results and rank it similar. But what Ciao etc. are doing is that they get paid for inclusion (or click outs) and still want to rank as well as natural listings.

    This worked very well for a long time until Brand owners did complain that Price Comparison sites rank better for brand searches than the original brand site.

    Now free listing sites and original brand sites plus some editorial sites and wikipedia rank better than paid inclusion sites.

    One of the free listing sites is Google (Maps, Products, Places ….). But there are a lot of other sites too that rank now better than before.

  • stasevil

    в стиле телепорт про наработали базу_ ботов частично заселили_ по макс используя шаблон любой доступной базенки актуальной на сегодняшний день и кормят обеъмными паразитическими запросами поисковый бот
    ?наверно в детстве с бояном не роняли_
    я не удивлюсь что для статистики выбирают одно из возможных зеркал запроса сгенерированых поисковым ботом)_

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