More Antitrust Woes for Google

After repeated antitrust skirmishes in the U.S., Google now faces a preliminary antitrust inquiry in Europe. Three European Internet companies are complaining that Google unfairly applies its search ranking on these competitors so that their results ranks lower.

Google denies the charges and in fact immediately questioned the firms’ motives. From a post on Google’s European Public Policy Blog

Given that these complaints will generate interest in the media, we wanted to provide some background to them. First, search. Foundem – a member of an organisation called ICOMPwhich is funded partly by Microsoft - argues that our algorithms demote their site in our results because they are a vertical search engine and so a direct competitor to Google. ejustice.fr’s complaint seems to echo these concerns.

The European Commission has notified us that it has received complaints from three companies: a UK price comparison site, Foundem, a French legal search engine called ejustice.fr, and Microsoft’s Ciao! from Bing. While we will be providing feedback and additional information on these complaints, we are confident that our business operates in the interests of users and partners, as well as in line with European competition law.

And it added later in the post:

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 (renaming it Ciao! from Bing) we started receiving complaints about our standard terms and conditions. They initially took their case to the German competition authority, but it now has been transferred to Brussels.

While Microsoft’s involvement is as ironic as it is unsurprising, that won’t change the fact that Google will continue to face more scrutiny thanks to its dominance of search and search advertising. The U.S. Justice Department came within hours of suing Google before the search giant backed off its proposed deal with Yahoo. And Google continues to face a potential fight over its deal with book authors and publishers.

As John Battelle notes, the allegations–like most others vs. Google–seem less serious than the kind that forced Microsoft to changes its ways. What’s more, it’s difficult to envision what Google should be doing differently: Stop or slow changes in its algorithms? Doesn’t sound so great for users. Open up its algorithms to more public scrutiny? Google might help itself by being a little more open there, but it’s hard to see how government authorities could require it. Break Google up, as one commenter on Silicon Alley Insider suggested? Um, break it into what? It’s still largely a search company–indeed, to whatever extent Google’s investors complain about the company, it’s that it hasn’t done enough outside search.

If remedies to Google’s power seem murky, such are the ways of antitrust law. (After all, Microsoft’s search deal with Yahoo was just OK’d by U.S. and European authorities, resulting in one less competitor to Google, so go figure.) I’d still be surprised if Google, whose actions haven’t yet been shown to be anticompetitive, got slammed by antitrust authorities as decisively as Microsoft was. But there’s little doubt that remaining innovative and aggressive in the face of such complaints will be Google’s key challenge in the years to come.

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