Google’s Alleged Antitrust Violations

In Europe, Google is under an antitrust investigation headed by the European Commission. The investigation originally stems  from complaints by three companies: Foundem, a U.K. price comparison service; eJustice, a French legal search engine; and Ciao, a German price comparison site. While Google holds a 66% share of the online search market in the US, it holds 80% in Europe, according to comScore, a marketing research company.

Google faces allegations that it gives preferential placement for its own vertical search results while intentionally lowering rankings of competitor sites to shut out competition and keep its monopoly. Additionally, the EU will examine accusations of Google lowering the quality score of competing search services, which makes it more expensive for competitors to buy sponsored links. The EU will also investigate if Google tried to prevent advertising partners from placing competing ads on their websites.

In a statement in the NY Times, Google says, “We built Google for users, not Web sites, and the nature of ranking is that some Web sites will be unhappy with where they rank.” It also states that the company always tries “do the right thing by our users and our industry” and “[ensures] that ads are always clearly marked, making it easy for users and advertisers to take their data with them when they switch services, and investing heavily in open source projects.”

Google adds that “there’s always going to be room for improvement, and so we’ll be working with the commission to address any concerns.” If that’s the case, Google should work on improving quickly, as investigators predict to reach a preliminary conclusion regarding its allegations of antitrust law violations over the next year, or even within a few months. If Google is found guilty of antitrust violations, the EU can fine it up to 10% of its annual revenue. Google’s revenue in 2009 was over $23 billion.

In the past, the EU has fined big companies, including Microsoft ($2.4 billion) and Intel ($1.45 billion) over antitrust issues.

Is Google really abusing its dominance in the search engine market and should it be worried about the outcome of the investigation? Or does Google have nothing to fear?

Sources:

Europe Opens Antitrust Inquiry Into Google

Google Under Scrutiny by European Commission for Alleged Antitrust Activity (In the case the link ask you for log in information, just copy paste this  source title into a search engine and look for the title written by the New York Times)

Photo Credit: Thomas Duchnicki