Tuesday, the European Commission (EC) has decided to open an antitrust investigation into allegations that Google Inc. has abused a dominant position in online search, in violation of European Union rules (Article 102 TFEU). The action follows complaints by specialized search-related companies about “unfavorable treatment of their services in Google’s unpaid and sponsored search results,” the European Commission said in their statement.
The announcement does not mean that the EC has reached any conclusions; only that it will conduct an "in-depth investigation" into the matter. Authorities in the United States have been examining Google’s acquisitions and actions for indications that its market power may be anti-competitive, but have not filed any formal proceedings. Google does face separate antitrust inquiries in Italy, Germany, and France.
The EC investigation will look at allegations of:
- Organic bias: Google is accused of giving preferential treatment to its own vertical search results at the expense of other providers - and intentionally lowering rankings of other sites.
- Paid bias: Google is accused of lowering the quality score on sponsored links of competing vertical search services.
- Exclusivity: Google is accused of trying to shut out competing search tools by telling advertising partners that they can't place certain types of competing ads on their websites.
- Portability restrictions: Google is accused of restricting the ability to use data on competing online advertising platforms.
The antitrust complaints were originally filed in February by three companies: British price-comparison site Foundem (partly funded by Microsoft), French legal search engine ejustice.fr, and Ciao, a price-comparison service in Germany owned by Microsoft. The problem with so-called “Organic Bias” is every retail store promotes their own in-house labels.
If you go to a grocery store and they offer their own brand of chocolate cookies at a discount while they sell the big name brands at standard retail pricing, no one thinks much about that approach to making a profit. Where the EU competitors complaints gain validity is that Google owns 80 percent of the EU search engine marketplace, whereas in the US they “only” own about 65% of the search engine traffic.
The complaint from Microsoft's Ciao by Bing and Foundem can be looked upon as simply a competitor, whose past search engine products have been lackluster. They have decided the attorney approach is the only card left to play in their lousy poker hand. The small, specialty search engines, such as ejustice.fr possibly have a more legitimate soap box to stand upon, when they say Google slips them down in the rankings.
If the process goes like past European Union Commission proceedings, such as the ten years of squabbling with Microsoft, we will visit this one with updates for the next few years. Or, as one of our past editors used to say, “Move along now, nothing to see at this time”.
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