There has been a nine month pondering period for this but finally the European Commission has decided that there is a case to answer for Google and it will formally probe its Google’s online search business to look for antitrust issues.
The original enquiry was triggered by complaints from three search providers – UK price comparison site Foundem, French legal search specialist ejustice.fr, and Ciao, a UK search engine now owned by Microsoft. All three have more specific, vertical services than Google’s, but they claim the larger provider has unfairly manipulated search results.
In particular, the European Commission – the EU’s executive body – will examine whether Google lowered the rankings of unpaid results from the three complainants’ services while giving its own vertical search preference. Also, it is alleged that Google lowered the ‘quality score’ for paid or sponsored links from the three smaller search firms. This score helps determine the price advertisers pay to Google.
Finally, the EC will investigate whether Google imposed exclusivity obligations on advertisers, a complaint brought by Ciao, so that they could not also run those ads on non-Google sites.
The Commission said it would “conduct an in-depth investigation of the case as a matter of priority”, though it insisted a probe did not necessarily mean it had proof of wrongdoing.
Google’s statement read: “Since we started Google we have worked hard to do the right thing by our users and our industry, ensuring that ads are always clearly marked, making it easy for users to take their data with them when they switch services and investing heavily in open source projects. But there’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns.” It also defended the quality and fairness of its ranking algorithms, and pointed out to CNet that it has been sued before, by firms unhappy with their quality and relevance rankings on Google, but the giant has always won.
In February, the EC set the ball in motion when it sent a letter to Google, asking how it ranked search results and adverts. Google’s share of the search and search-related ad markets is huge in Europe at around 90% – even higher than in the US. It is extending its search dominance rapidly into the mobile environment and increasingly looking to control the revenue generating services that ride on that position in search.
Many see the turning point for Google as the 2007 acquisition of online ad engine DoubleClick, which is being reworked this week to help boost the search giant’s display ad business.
In the mobile world, Google is increasingly seen to be leveraging its search power to create a complete mobile software stack that will effectively exclude rivals from the platform, even though the components are open source. This stack already reaches from the Android OS and developer framework, through the Chrome browser, a widening range of Google web apps including Voice, and of course the search engine.
However, ironically, the mobile world may give Google its best defense against accusations of a market share that enables anti-competitive behavior. Although Google has strengthened its mobile advertising play with the acquisition of AdMob, that purchase was cleared by US competition authorities largely because Apple had acquired Quattro Wireless and made it the basis of its own iAd engine. This meant that the investigators believed there was a sufficiently strong competitive landscape.
Also, several operators and handset makers are trying to reduce Google’s control over the Android experience by defaulting on rival search engines like Microsoft Bing or, in China, Baidu. Again, this may work in Google’s favor in the competition courts, if not in the market.