E.U. launches formal antitrust investigation into Google
The European Commission, the European Union's executive body, said Tuesday it has opened a formal antitrust investigation into Google's search practices. The E.C. said in a release it will focus on whether Google illegally used its dominance in search to lower the rankings of unpaid search results from competitors while giving preferential rankings to its own services.
In a statement, it said, "This initiation of proceedings does not imply that the Commission has proof of any infringements. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority."
Specifically, the E.C. will focus on the four following areas:
1) Rankings: Google allegedly lowered the ranking of unpaid search results of competitors that specialize in services such as price comparisons. The firm has also allegedly given preferential placement of its own search services in order to shut out competitors.
2) Sponsored Advertising: Google allegedly lowered the 'Quality Score' for sponsored links of competing vertical search services. The Quality Score is one of the factors that determine the price paid to Google by advertisers.
3) Advertising Obligations: Google allegedly forced exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their Web sites, as well as on computer and software vendors, with the aim of shutting out competing search tools.
4) Data Portability: Google allegedly restricted services from transporting advertising campaign data to competing online advertising platforms.
Google, in its official blog, said it will work with the E.C. on its investigation. But it also stressed that its search service is focused on users so some Web firms may be unhappy with their rankings.
"Not every website can come out on top, or even appear on the first page of our results, so there will almost always be website owners who are unhappy about their rankings," wrote Susan Wojcicki, senior vice president of product management and
Udi Manber, vice president of engineering.
David Balto, a antitrust attorney and fellow at the Center for American Progress, said the E.U. investigation won't necessarily lead to a similar investigation in the U.S.
"The standards under the U.S. are even higher than the EU and the U.S. enforcers will be reluctant to launch an investigation based on complaints of a disappointed competitor trying to pawn off bad a deceptive searches," Balto said.
But the European investigation comes amid greater scrutiny of Google's business practices. The search firm's proposed merger with online flight software provider ITA is under review and opposed by some firms such as Expedia, Kayak, Travelocity, and TripAdvisor, who are lobbying the Justice Department against the deal.
| November 30, 2010; 9:51 AM ET
Categories: Antitrust, Google
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