San Francisco — Global search and advertising giant Google’s undaunted ascension to the Internet search engine throne has caused some to doubt the sincerity of its “Don’t Be Evil” motto and made it a prime target for market watchdogs. A tiny British shopping comparison site has triggered an investigation by the European Commission into whether Google is abusing its monopoly position by deliberately lowering rivals’ sites in its search results.
The European Commission, the governing body of the European Union, on Tuesday said that it has initiated an investigation into Google’s business practices after complaints that the global internet company has abused its dominance of online search engine — the first such in the world and one certain to be watched with interest.
The investigators will also investigate the suspected regulations that Google’s business practices stifle competition, that is, on the portability of online advertising campaign data to competing online advertising platforms.
The investigation resulted from complaints by three companies — Foundem, a British price comparison site; Microsoft-owned Ciao; and the French legal search engine justice.fr — that connects to their services appear too low on Google’s general search results. They also observed that when Google offers similar services — such as online price comparison — it puts its own links higher on the sponsored search results that companies have to pay for.
“We are very pleased the commission has taken this important initiative, but we are not surprised,” said Shivaun Raff, chief executive of Bracknell-based Foundem. “European law says that if you have a dominant position in a market, you have a responsibility to behave in a way that does not crush competition in the market.”
In a blog post, Google SVP of product management Susan Wojcicki and VP of engineering Udi Manber referred the interest of EU regulators to “our success and the disruptive nature of our business.” And they repeat a talking point from Google’s close encounter with U.S. antitrust regulators in 2008, that “the competition is only one click away.”
Amazingly, Google is not eagerly contesting the charges, suggesting that it may be prepared to make some concessions. A statement offered by a Google spokesperson sounds conciliatory rather than combative.
“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 to take their data with them when they switch services and investing heavily in open source projects,” a Google spokesperson said in an e-mailed statement. “But there is always going to be room for improvement, and so we will be working with the Commission to address any concerns.”
The case could take years to be settled but could affect Google facing billions of euros in fines, and strict standards about how it can lay out its search results, especially when they include its own services. Fines can reach 10% of revenue, which would amount to $2.4bn (£1.54bn) based on the company’s 2009 earnings figures.