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Business

EU opens Google antitrust probe on rivals’ complaints

Video by FRANCE 24

Text by News Wires

Latest update : 2010-12-15

European Union regulators will investigate whether Internet advertising and search giant Google has abused its dominant position by deliberately lowering links to smaller rivals' sites in its search results.

AFP - Europe launched a full-frontal attack on Internet king Google Tuesday, formally opening an antitrust probe after rivals accused the Silicon Valley giant of rigging the online search market.

European Union competition watchdogs announced their investigation, after smaller companies accused Google of "unfavourable treatment" of their services in both unpaid and sponsored search results, the crucial listings that make the web navigable.

Competition authorities are also probing whether Google's own services -- YouTube video, book-scanning project or telephony -- are getting "preferential placement" when users punch in search queries, some of which may lead to consumer spending.

The official probe will certainly take many months, and potentially carries echoes of a decade of antitrust pursuit of fellow computer giants Intel and Microsoft -- each of whom copped billion-euro fines in total -- over issues from PC chips to web browsers.

An investigation does not necessarily mean legal action will follow, but the latest blow for the company comes on top of an earlier rap from France over restrictive advertising practices and ongoing national probes in Germany and Italy -- not to mention its Street View application raising vociferous privacy concerns.

Google's share of the EU's online advertising was last pegged at around 30 percent in 2008.

Its part of the core US search market grew to 66.1 percent in September, according to industry tracker comScore.

The company posted a 32 percent leap in net profit to 2.17 billion dollars between July and September, its latest available results.

One of the complainants, British search site Foundem, said in a statement that Google's revenue "pales next to the hundreds of billions of dollars of other companies’ revenues that Google controls indirectly through its search results and sponsored links."

The commission wants to check if Google was "lowering the ranking of unpaid search results" as well as other allegations of advertising interference including imposing exclusivity clauses, restricting ads from competing providers and data on consumer impact.

"When a user searches for queries like 'flights from San Francisco to London,' we think the most useful answer is showing fares and flights, not just a collection of links," a Google spokesperson argued.

The company said it would cooperate with the probe, saying: "There’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns."

Insisting "ads are always clearly marked," the spokesperson set the tone for the battle ahead by recalling that "sites have complained and even sued us over the years, but in all cases there were compelling reasons why their sites were ranked poorly by our algorithms."

 

Date created : 2010-11-30

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