European Commission to Investigate Whether Google Violated Antitrust Regulations

By Ed Silverstein November 30, 2010

The European Commission is investigating whether Google violated EU rules based on an allegation that the search giant “abused a dominant position in online search.”

The formal investigation comes after complaints by search service providers (apparently rivals of Google) about “unfavorable treatment” of their services in Google's unpaid and sponsored search results. They also complain about alleged “preferential placement of Google's own services,” EC officials said in a recent announcement.

The EC explains that Google's search engine gives two kinds of results when users are searching for information. They can be unpaid search results. The EC explains these are also known as "natural,” "organic" or "algorithmic" search results. Or they are “third-party advertisements” displayed at the top and at the right side of Google's search results page. These are called paid search results or sponsored links, according to the EC.

The commission said it will look into whether Google “has abused a dominant market position in online search” and whether it lowered the ranking of “unpaid search results of competing services.” These are specialized and give search engine users specialized content, the EC said. Examples may include price comparisons, also known as “vertical search services.” Also in question is whether Google gave “preferential placement” to its own vertical search services and “shut out” its competitors.

In addition, the commission will investigate whether Google actually “lowered” what is known as the “Quality Score” for “sponsored links of competing vertical search services,” said the EC. The EC explains that the Quality Score is a factor, among several, which determine the price that is paid to Google by its advertisers.

The commission will also look into whether Google imposes “exclusivity obligations” on advertising partners. This would prevent 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.”

And the EC will look at possible restrictions on “the portability of online advertising campaign data to competing online advertising platforms.”

The EC says it does not have proof of infringements by Google. But the commission will conduct a detailed investigation and give it priority over other cases.

The commission let Google know about the inquiry.

The Associated Press reports that Google says it hasn't done anything wrong.

"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 and advertisers to take their data with them when they switch services, and investing heavily in open source projects," Google said in an emailed statement that was quoted by The AP. "But there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns.”

TechZone360 reports that the AP says the inquiry is the “first major investigation into Google's business practices anywhere in the world” and could make Google pay billions of dollars in fines to the EC.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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