As both the Wall Street Journal and Telegraph UK are reporting, the EU has received complaints into Google’s competitive practices and potential abuse of its dominant market position in Europe. These come from some private companies, which we discussed in part before.
One of those companies, the shopping engine Ciao, was acquired by Microsoft in 2008. Another of the companies, Foundem, is part of an organization funded in part by Microsoft. While these complaints likely exist independent of Microsoft, it’s also clear that Microsoft is not a remote and disinterested party in this dispute. Microsoft itself has been on the receiving end of EU sanctions and fines for being found in violation of EU anti-trust rules.
It must be stressed that this isn’t a formal investigation and the outcome is not a forgone conclusion. We have not seen the body of the complaints filed against Google but the Telegraph article and Google’s related blog post suggest that they go to Google’s algorithm and alleged “penalties” imposed by Google in the form of search demotion. The allegation that emerges from more than one of the complaints is that Google is punishing or diminishing the standing of competitors or would-be competitors in the form of these sites.
For its part Google, as one might expect, denies wrongdoing. On its European Public Policy Blog Google says:
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. 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.
In the post Google explains the nature of the complaints and uses some blunt language about two of the three complainant companies’ relationships with Microsoft, implying that Redmond is the puppet master behind their actions. Regardless of whether or not Microsoft is involved in an indirect way, the EU has repeatedly expressed concerns about Google’s market position and power and so is itself probably not unhappy to have an opportunity to examine these questions in the context of a formal investigation.
But separate and apart from whether the EU has its own agenda there are laws and facts here that can and should be examined fairly and objectively. Google cannot and should not be found “guilty” simply because the company has been successful. The question is: has Google in fact abused its position?
There is a distinction between an outcome that results from market forces and is not caused by Google’s self-interested manipulation of search results and one that is. And my guess is that there ultimately won’t be any finding of manipulation or abuse by Google.
If there were to a finding against Google by the EU what would the remedy be: to “freeze” Google’s algorithm, to fully expose it to the market to make the algorithm more “transparent”? As a practical matter neither of these outcomes is likely or plausible really.
By contrast, I could imagine that the EU might call for a process or procedure whereby companies that were to be “demoted” on Google’s SERPs would receive notice and the ability to “appeal.” In other words, some form of “due process” would be required. That would be my suspicion of where the EU might come down on this as a remedy if there were a finding against Google. (There could also be fines.)
Then there’s also the negative PR angle, which those who oppose Google may be more focused on than any potential legal victory. Any negative publicity that gathers around Google, from Buzz privacy issues to this set of anti-trust complaints, may have the affect of tarnishing Google’s brand and image with the public.
One thing is very certain however; the EU investigation signals that Google is facing a new level of scrutiny and pressure — as well as adversaries who may be emboldened to use the legal system to accomplish objectives that they cannot in the marketplace.
There’s more discussion on Techmeme.
Postscript: I was made aware of another anti-trust claim filed in the US by a company called “myTriggers” against Google. As law professor Eric Goldman points out in the post, this is not the first anti-trust suit in the US filed against Google by a private litigant.
Postscript #2: I misstated that there was a “formal investigation.” Right now the EU is merely taking a look at the claims and contentions in these complaints. We’ve updated our article to reflect this. Also see EU denies Google is under investigation, early evidence appears weak at Betanews for more.