EU Tells Google To Remedy Antitrust Violations
Do you use Google when you search for something — a new hot water heater, directions to Aunt Margery’s, car prices, a hotel, information about why your child refuses to wear shirts with buttons? Does it even occur to you that there are other search engines out there (hello, Bing, Alibaba)?
Google says the results it offers via its search engine are neutral but regulators in Europe — where Google accounted for 79.3 percent of searches in March — beg to differ. On Monday, the European Commission accused Google of “abusing” its dominant position in the search engine market to tilt the balance towards its own advertising services and away from those of competitors. The EC has issued an “ultimatum” to Google to devise solutions in four areas or face a long and costly antitrust suit.
A statement details the four ways in which Joaquín Almunia, the EC antitrust chief, charges that Google is violating competition laws:
- Google favors its own products (such as Google maps or images) in search results.
- Google copies content (such as user reviews) from competing “vertical search services” and uses it in its offerings.
- The agreements between Google and websites on which it delivers search advertisements hurt competitors.
- The restrictions that Google places on the “portability” of online search advertising from AdSense, its own platform, to the platforms of others, are also to competitors’ disadvantage.
The suggestion that Google has somehow engineered search results to its own advantage would indeed undermine the seeming “randomness” of results from Google’ search.
In the US, Google accounted for 66.4 percent of searches in March, says the New York Times. Globally, Google accounts for 78.64 percent of the desktop search market, down from 83.19 percent last year, according to figures cited in Ars Technica. Google has clear dominance in mobile search, with 91 percent of the market.
As the New York Times notes, should Google decide to fight the EC’s charges, the Federal Trade Commission could launch its own investigation. US regulators have already requested that Ebay and Yelp provide information on whether Google has hindered competition; these requests, notes Bloomberg, are “civil investigative demands” that are on a par with subpoenas. The FTC is seeking to know whether Google has failed to execute its promise to direct users to competitors’ sites and whether it sells rivals “prime advertising space on search results pages.”
Google has objected to the EC’s conclusions, noting that “competition on the Web has increased dramatically in the last two years” since the EC began its investigation in November 2010, and that “innovation online has never been greater.” Nonetheless, Google says that it is “happy to discuss any concerns [the EC] might have.”
As Politico points out, Almunia has actually given Google a “legal lifeline to devise solutions and implement them.” Google must come up with initial remedies to the four issues noted above in the next few weeks; these solutions would then need to be market-tested. Should Google be convicted of antitrust violations in the EU, the price will be steep, as these carry fines of up to 10 percent of a company’s revenue; Google’s revenue last year was nearly $38 billion.
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