Everyone who’s anyone will have acknowledged the immense power that Google holds in the World Wide Web and the influence that it has, with many airing concerns that it manipulates results in order to push its other services and products. Evidence to this effect can even be seen in a previous Lakestar blog post.
And whilst Google may have escaped retribution for this without consequence for some time, the company has now been handed a deadline of a ‘matter of weeks’ from the European Commission, to outline exactly how it will quell four separate antitrust concerns that it is manipulating search results in its favour.
The European Commission commissioner, Joaquín Almunia, has personally written to executive chairman Eric Schmidt to “offer Google the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points.”
So what, according to the document, are the points in question?
- The first point focuses on how Google displays “its own vertical search services differently”, thus giving them greater exposure and potentially leading to “preferential treatment”.
- The second point remarked on Google copying content from competing vertical search services and using it in its own results. Without prior authorisation for this, it could lead to competitors no longer producing unique content to help users out of fear of it being stolen by Google.
- Thirdly, there is concern over the level of restrictions that Google imposes on search ads, which are “advertisements that are displayed alongside search results when a user types a query in a website’s search box”. Essentially this brings into question the exclusivity that Google has to sell advertising on search terms that users may look for.
- Finally, Almunia focuses on Google AdWords, questioning the lack of “seamless transfer” and portability to move campaigns onto other search advertising platforms, such as Microsoft’s adCenter. Specifically, the EC is concerned “that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising”.
What can Google do?
Schmidt and the team at Google must provide a plan, or ‘remedies package’, that will address all of these claims and serve to calm concerns; however should the response be unsatisfactory, “the on-going formal proceedings will of course continue, including the possible sending of a Statement of Objections.” This could lead to multi-billion fines and forced remedies, as well as potential damage of the company name.
An anonymous competitor commented in the Guardian that, “There are only two outcomes. Either Google takes the easy option, and makes substantial changes, or the EC moves in on it. We now have an endpoint, which is remedies that are binding, and which restore the level playing field.”
The investigations, dating back to 2009 though officially launched in 2010, were initially sparked by Google service competitors, such as Foundem, Ciao and Hotmaps, complaining that their services were unfairly punished and artificially lowered in Google search results. Foundem recently released a statement praising the action, with Shivaun Raff, CEO, stating “Foundem’s complaint, filed in November 2009 and updated in February 2010, was the first to document how Google systematically manipulates its ostensibly neutral search results to promote its own services while simultaneously demoting or excluding those of its competitors.”
She added, “We are pleased that the commission has affirmed Foundem’s complaint, listing search manipulation as its first concern.”
What is Google’s stance on this?
European public policy spokesman for Google, Al Verney has responded to these claims, stating, “We’ve only just started to look through the Commission’s arguments. We disagree with the conclusions but we’re happy to discuss any concerns they might have.
He added, “Competition on the web has increased dramatically in the last two years since the Commission started looking at this and the competitive pressures Google faces are tremendous.”
Stuck between a rock and a hard place, it is likely that Google will address these concerns head on with as little action as possible to affect its strong business model; however, with such a large market share, aspects of the search engine may change, and be subjected to extensive market-testing before the close of legal proceedings. Facing further stresses such as another anti-trust investigation by the FTC, complaints by online travel companies, patent infringement issues with their mobile platform Android and further patent scrutiny over its recently-acquired company, Motorola Mobility, Google look set to have a trying year ahead.