EC Confirms Antitrust Complaints Against Google

Google’s domination of the search engine business is coming under the spotlight, after the  European Commission began a preliminary inquiry, after complaints alleged that Google is demoting websites in its search results, and is not respecting fair competition.

Google said that three web companies have filed complaints with the European Commission (the antitrust body for the European Union), including UK price comparison site, Foundem, a French legal search engine called ejustice.fr, and Microsoft’s Ciao from Bing, a product shopping site.

While the Commission said it has not opened a formal review of Google over these complaints, Google denied the allegations and pointed to search rival Microsoft as the possible instigator in at least two of the claims.

Google said Ejustice.fr and Foundem, a member of an organisation called ICOMP funded partly by Microsoft to lobby against Google in Europe, alleged that Google’s search algorithms demote its site in Google search results because they are a vertical search engine and so a direct competitor to Google.

Microsoft acquired Ciao, a long-time AdSense partner of Google’s, in 2008 and renamed it Ciao from Bing. Shortly after the buy, Google said it began receiving complaints about its standard terms and conditions.

Google’s implication is that Microsoft is behind the complaints.

Julia Holtz, Google’s senior competition counsel, acknowledged the importance of rankings to websites, but said search is not perfect and is a “very hard computer science problem to crack.”

Holtz explained that Google’s algorithms aim to rank what people are most likely to find useful and that many vertical search engines, such as Moneysupermarket.com, Opodo and Expedia, often rank high in Google’s results.

“Though each case raises slightly different issues, the question they ultimately pose is whether Google is doing anything to choke off competition or hurt our users and partners,” Holtz continued. “This is not the case. We always try to listen carefully if someone has a real concern and we work hard to put our users’ interests first and to compete fair and square in the market. We believe our business practices reflect those commitments.”

Google will provide feedback and additional information on these complaints going forward.

Collins Stewart analysts pointed to the complaints as part of its downgrade of Google to “hold” 22 January.

The research firm noted: “Increasing regulatory scrutiny was one of the minor reasons for our downgrade of Google in January. Due to Google’s dominating position in search, the regulatory scrutiny will likely surface more often.”

Google is no stranger to discord in Europe. Switzerland is suing the search engine over its Street View feature in Google Maps. In 2008, Google halved its data retention duration to 9 months after the EU complained.

Earlier today, two managers and a former executive of Google were found guilty of privacy violations by an Italian court, related to a clip of students bullying a disable classmate that was uploaded to Google Video in 2006.