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Business

EU targets Google in anti-competition probe

Text by Khatya CHHOR

Latest update : 2010-12-15

Acting on complaints from three online companies, the European Commission has launched a preliminary inquiry into anti-competition allegations against Google over how the Internet search giant ranks its results and manages its digital advertising.

The European Commission has launched a preliminary inquiry into anti-trust allegations against Google brought by three online companies over how the Internet giant’s search engine operates and the way it sells its digital advertising.

The Commission is acting on separate complaints from three companies - the British price comparison site Foundem, French legal search engine eJustice and Ciao! from Bing, a German online retailer that was bought by Microsoft in 2008. The three have alleged that Google’s search engine artificially demotes the results of competitor sites in its rankings and questioned some of the conditions the company includes in its deals with advertisers.
 
Google confirmed late on Tuesday that it had been notified of the complaints and had received a series of questions from the commission in connection with the probe, which is at an early, fact-finding stage.
 
“[We] are confident that our business operates in the interests of users and partners, as well as in line with European competition law,” wrote Google's senior counsel for competition, Julia Holtz, in a blog posting published late on Tuesday.
 
Holtz went on to say that Google is “the first to admit that our search is not perfect”, but said this was due to the technical difficulties of compiling accurate rankings for millions of results “in just a few milliseconds”.
 
The Microsoft connection
 
The European Commission inquiry falls under the rubric of the EC Treaty’s “abuse of dominant position” clause and is the first time Google has been targeted by the EU -- although its 2004 decision to fine Microsoft 497 million euros in an anti-trust ruling earned the EU a reputation for being tough on commercial giants that flout the rules.  
 
But the connections between Google’s European accusers and its main competitor, Microsoft, may raise some eyebrows. Microsoft bought the shopping site Ciao in 2008 for almost 500 million dollars and renamed it Ciao! from Bing, after Microsoft’s own search engine. Foundem, meanwhile, belongs to the Initiative for a Competitive Online Marketplace (ICOMP), a group of Internet firms that is partly funded by Microsoft.
 
An ICOMP spokesman told Britain’s Daily Telegraph on Wednesday that it was funded by numerous companies and that its only interest was in promoting transparency and fair competition.
 
Google remains by far the world’s leading search engine, with Google sites in December 2009 accounting for 66.8 percent of the global search market, according to digital market research firm ComScore.

 

Date created : 2010-02-24

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