What Is at the Heart of Complaint Against Google?

google

At the heart of the European Commission’s antitrust complaint against Google Inc. is the search giant’s alleged practice of highlighting its own shopping services in response to search queries, ahead of links to similar services run by rivals.

Such “search bias” is important because more than 90% of Internet searches in Europe are conducted on Google. Given that dominance, promoting its own services while demoting others may be illegal under EU law, some attorneys say.

“Search bias is a logical focus for the EU because its competition law is concerned about fair and open market access along with consumers’ interests,” said Eleanor Fox, an expert on European antitrust law at New York University.

Google sent a memo to employees on Tuesday saying it has a “very strong case,” in part because its search engine provides quicker, more direct answers to queries, saving consumers time. The company also highlighted competition from other search services, like Apple Inc.’s Siri and Microsoft Corp.’s Cortana, as well as specialized services fromAmazon.com Inc.,eBay Inc. and others.

Rivals who run other comparison-shopping sites, as well as Google rivals in other “vertical” areas such as travel, maps and local services say Google has bolstered its own offerings in those areas, and directs users to its services, ahead of links to others.

Staffers at the U.S. Federal Trade Commission in 2012 found that Google favored its own shopping, travel and local services in general search results, even when some of those products weren’t most relevant to users. In shopping, Google targeted comparison shopping sites for demotion in its search results despite feedback from those rating the results that they preferred the sites over other links that were promoted, FTC staff also said. They also found evidence that Google was concerned about losing search business to specialty search rivals. FTC Commissioners later voted unanimously not to charge Google with antitrust violations.

The European Commission on Wednesday said Google gives “systematic favourable treatment” to its shopping service, Google Shopping, in its general search results. That may artificially divert traffic from rival comparison shopping services and hinder their ability to compete, it argued.

“Users do not necessarily see the most relevant results in response to queries—this is to the detriment of consumers, and stifles innovation,” the commission said in a statement. “To remedy such conduct, Google should treat its own comparison shopping service and those of rivals in the same way.”

While Wednesday’s complaint focused on shopping-related results, EU Competition Chief Margrethe Vestager said the agency is examining Google’s conduct in other vertical areas, such as “hotels or flights or maps.”

In a preliminary assessment in March 2013, the European Commission said Google’s more-favorable ranking and display in general search results of pages from its vertical search services was likely to reduce competition in Europe.

The investigation of Google stems from a 2010 complaint by Foundem, a U.K.-based vertical search and price-comparison website. Foundem said that in 2007, Google had begun including its own product-search service in its “universal search” results, pushing down links to rival shopping search and price-comparison websites.

Between October 2007 and October 2009, the number of unique U.K. visitors to product-comparison services including Shopzilla and Nextag dropped 41% on average, while visitors to Google’s Product Search service jumped 125%, Foundem said in its complaint, citing data from researcher comScore.

Since then, Google converted its product-search service into Google Shopping, where merchants pay to display items. Rivals complained that Google favored results for Google Shopping when users searched for products in the general search engine.

From the start of 2013 to early 2015, leading shopping and price comparison services in Germany, such as Nextag, Ciao.de and Twenga, saw their organic search visibility drop 91% on average, while visibility for Google Shopping surged 880% in the U.S. and more than tenfold in Germany, according to Searchmetrics. The online search analytics and content performance firm runs hundreds of millions of keywords through search engines, tracks where websites show up on results pages and measures how likely they are to be clicked on.

Online travel and mapping companies have voiced similar complaints, although the EU didn’t include those subjects in its formal charges against Google. Online-mapping company Hot-Map.com, best known for its maps of European cities, said monthly visits to its site have fallen to about 100,000, from a peak of 721,000 in July 2007, around the time that Google began including its own map service in general search results.

Michael Weber, a director at Hot-Map, said the company is losing money, has laid off dozens of workers and is “holding on” in the hope that the EU’s antitrust charges against Google make it easier to compete.

“Local map providers may do only one city really well, but they have no chance of being found online because there’s the big Google map on top today,” he said.

Source