At Mobile World Congress the Vodafone CEO Vittorio Colao called for an antitrust probe into Google and this week the European Commission initiated an investigation, which at first is targeted at how Google puts rivals low down in search results, but which we expect to see broadened to take in its monopoly position in both search and mobile search. Google has never been shown to have a monopoly, and once it is, a number of previously okay activities will be seen as anti-trust.
The investigation was kicked off with European regulators writing to Google asking how it ranks search results and adverts ‘ the answer could be fun since it will be a huge set of trade secrets for Google and something that SEO specialists have been trying to nail down for the past decade.
It says it needs to know this in order to investigate complaints from UK price comparison site Foundem and a French legal search engine called ejustice.fr and from Microsoft Bing. They all claim their web sites are penalized in Google search results for competitive reasons.
This is something that anyone who runs a web business is constantly worried about, how to get further and further up the Google rankings. Google can implement arbitrary decisions on what constitutes what a consumer is looking for in a web site, and without a senior Google ranking, almost no web business can do well. Upset Google and you can lose your business.
We’re not sure what Microsoft Bing is worried about. Put Bing or Search Engines into Google and you find Bing first and third on the first page. Most businesses would kill for that kind of seniority. And now the Google monopoly position is moving lock stock and barrel onto mobile, leaving operators like Vodafone concerned that it has to keep Google happy in order to keep doing well. Keeping Google happy may also mean taking on-board Android phones, and putting Google search onto white label devices, as far as a mobile operator is concerned.
Google has openly said that it has such a letter from the European Commission and said it would provide feedback and additional information but is confident that it is operating within European competition law. Smarter companies than Google (Are there any?) have failed completely to understand the European requirements of a monopoly, IBM, Intel and Microsoft among them
The Microsoft complaint was really from pre-Bing days, before Microsoft bought the search engine Ciao and turned it into Bing. In a corporate blog post, Google said that it saw Microsoft’s hand behind the actions of the other two sites as well. “Regarding Ciao!, they were a long time AdSense partner of Google’s, with whom we always had a good relationship. However, after Microsoft acquired Ciao! in 2008 we started receiving complaints about our standard terms and conditions.”
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 – it has announced its own social networking initiative, Buzz, its own browser, Chrome, and ties platforms like Google Maps tightly into its search engine to the detriment of rival operations. Bing does this too, but in this segment it has no monopoly, so that’s fine.
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.
At present most handset makers can take Google elements or leave them and are creating their own differentiation above the Android level, such as Motoblur from Motorola, which offer less prominence for Google services.
This perhaps shows why Nokia, the world’s largest handset maker is keeping away from Google and not using Android as the basis of any of its devices, instead partnering with Intel to create their jointly owned MeeGo Linux-alike.
Even so Nokia is obliged to work with Google and offer its search on its handsets, even if it hijacks local searches for its own Navteq local search system.
Google has pointed out that at least one of the complainants, Foundem, is a member of ICOMP, a Brussels-based organization founded by Microsoft which appears to exist only to campaign against Google. Fair enough. What is the point of being massively fined by the European Commission over anti-trust in Europe, if Microsoft can’t learn form the experience and put it to work.
Google said that previously the German Cartel Office was working on a complaint from Ciao, and other complaints by mapping sites including Euro-Cities AG. These now seem to be included in the Brussels based investigation.
What is most interesting is just what kind of remedy the European Commission might come up with if it finds any merit in any of these complaints. Will it have the power to get companies higher in the Google ranking? Or to force Google to use a particular approach when ranking web sites. We suspect at the very most the Commission could force Google to only have one set of search rules for everyone and that it does not operate a clandestine set of rules for rivals. But it will have to prove that Google has done this first and it may not have done.