Almunia acknowledges Google’s prior statements about a willingness to settle and suggests that if a settlement can be reached Europe and Google will be able to put the matter behind them:

I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement

Almunia clearly doesn’t want years of litigation and he’s banking that Google doesn’t either. I’m not an antitrust expert and even less familiar with European antitrust law.  However it’s not clear that Europe has a conclusive case against the company. It is clear, however, that the European legal system is somewhat more sympathetic than US law to the various antitrust arguments against Google (e.g., search neutrality).

The four areas of “concern”

Here are the four areas of concern from Almunia that involve a potential “abuse” of market power by Google:

1. Almunia does buy into the “search bias” or “search neutrality” idea. He says, “In general search results, Google displays links to its own vertical search services differently than it does for links to competitors. We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.”
2. The second area concerns Google indexing reviews that “it uses in its own offerings” (e.g., Places). Almunia characterizes this as plagiarism of a sort: “Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors.”
3. If I understood it correctly, the third area of “abuse” involves AdSense: “The agreements [with publishers displaying Google ads] result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services.”
4. The fourth area is one that Microsoft has been arguing for some time. This involves the “portability” of ad campaigns from AdWords to adCenter: “We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.”

Anti-Google lobbying group FairSearch.org welcomed these findings. It issued an upbeat statement attributed to its European attorney Thomas Vinje:

Today’s statement by European Commission Vice President Joaquín Almunia, identifying four concerns where Google business practices may be considered as abuses of dominance in violation of competition and consumer protection laws, is a welcome development. We are pleased that Commissioner Almunia’s investigation has validated the concern that FairSearch members and many other businesses and consumer advocates have raised about Google’s practices that distort the free market and deprive consumers of the transparency and real choice that only results from competitive markets.

As for Google, it gave us this statement:

We’ve only just started to look through the Commission’s arguments. We disagree with the conclusions but we’re happy to discuss any concerns they might have. Competition on the web has increased dramatically in the last 2 years since the Commission started looking at this and the competitive pressures Google faces are tremendous. Innovation online has never been greater.

Some matters more easily resolved

Google can relatively easily address items 3 & 4 above on the list. These are largely contractual issues and don’t implicate Google’s presentation of search results. Number 2 above also appears relatively easy to resolve. Google can refrain from indexing third party reviews for display in its vertical services (and general search results if necessary).

It does raise a question, however, about whether Google would need to obtain authorization to index other kinds of content ahead of time. Google would have to agree to all of this of course.

A more difficult issue is the first item, where Google is being asked not to display its own “vertical” content (think Maps) in a way that’s more elaborate or otherwise different than competitors’ products. This goes to Google’s ability to innovate with its UI and could have very broad implications for “universal search” and its subsequent iterations (SPYW, knowledge graph, etc). This is the potential stumbling block for any early resolution and the issue that could prevent a complete settlement of the case.

Settlement might not happen across the board

If Google and the European Commission fail to reach a settlement across all areas, it’s not clear to me whether it has the immediate power to start imposing fines or would have to successfully litigate against Google — as the FTC would in the US. While in the US the FTC only has access to “injunctive relief” (non-monetary remedies), the European Commission can impose financial penalties of up to 10 percent of a company’s annual global revenue. In this case that would about to nearly $4 billion.

Both the European Commission and Google have clear incentives to settle. The question is what will they do about the “search neutrality” issue (#1 above)?

Postscript From Danny Sullivan: I’m in agreement with Greg’s analysis here. It’s difficult to see how Google is supposed to resolve the first issue, especially when Bing and Yahoo have done exactly the same things with their vertical search results. For more about this, see:

• Dear Congress: It’s Not OK Not To Know How Search Engines Work, Either
• Bing’s Travel Search & Kayak Favoritism Angers No One, While Google’s Gets Headline Attention From WSJ

However, it could be that if Google agrees to settle over the other concerns, the EU will suddenly discover that the first point is no longer a worrisome issue. Alternatively, I’ve found governments around the world seem to have some fundamental misunderstandings of how search works. Given this, Google could provide some token agreement that makes the EU believe the “problem” here is solved.

It’s also important to note there’s not a fifth finding — that ad spend had any impact on search results. That was one of the questions that the EU raised during its “fishing expedition” survey last year. Clearly it didn’t find enough evidence to raise this as a fifth point to resolve.

Like Greg, I tend to view this letter as a sign of weakness, that the EU isn’t sure that it has a strong enough case to win, so telling Google what its concerns are, and getting back some promises of resolution of any type might allow it to move on.

According to an English-language article from Ynetnews, soldiers and vehicles inside a “secret base” are clearly visible on Street View, which just launched in Israel a couple weeks ago.

Journalist and new media consultant Yossi Dorfman revealed in his blog that a secret Tel Aviv-area base has been fully exposed by Google’s new service. The images allow users to see the guard post at the entrance to the base, several soldiers inside it, and vehicles parked in the base with their license plates clearly visible.

The article goes on to quote a “veteran officer” who saw the images and called it a “first-rate screwup” on the IDF’s part to allow the images to show up online. There’s nothing in the Ynetnews article that places any blame on Google.

In fact, in the Hebrew-language version of the article, an IDF spokesperson is quoted at the end as saying all images on Street View have been reviewed and approved for display, and that there are no military security-related reasons to hide the images in question.

For its part, a Google spokesperson gave us this statement:

“We always strive to cooperate with the relevant authorities in countries in which Street View is operated. We had very constructive discussions with the Israeli security authorities and are pleased that they have approved our plans to bring Street View to Israel. The imagery featured on Street View is no different from what any person can readily see walking down the street or looking at other pictures online. Imagery of this kind is available in a wide variety of formats for cities all around the world.”

Shown above is a screenshot of the Wailing Wall (also called the Western Wall) in Jerusalem, one of the city’s most sacred sites.

Plans to bring Street View to Israel have been the subject of great discussion — and some controversy — for more than a year. In early 2011, Israeli government officials met with Google and concluded that allowing Street View images online would be good for tourism and the country’s image.

Others disagreed, saying it would help terrorists find new targets. Palestinian militants had previously admitted to using Google Earth to plan rocket strikes inside Israel.

But after months of discussion, and a public poll in which 70 percent of respondents supported Street View imagery, the Israeli government gave Google the go-ahead last August, but with four conditions:

1. Israel will be able to initiate any civil legal challenges against Google inside Israel, even though the Street View data will be hosted outside the country.

2. Google won’t challenge the authority of Israel’s Law, Information and Technology Authority to initiate criminal or administrative challenges if Google violates state law.

3. Google will give the public a way to request additional blurring of images (beyond Google’s normal level of blurring) after the images are published online.

4. Google must use online and offline channels to inform the public about the Street View service, the right to ask for additional blurring and its planned driving routes. Google’s Street View cars must also be clearly marked so the public can identify them.

According to this blog post (in Dutch), Street View images are available in Haifa, Tel Aviv, Merhavia, Kfar Kama, Nahsholim and Beersheba.

Let’s take the raw sales performance first. Below is a chart which looks at the rate of growth of the US, UK and then the rest of the world. You can see that the dramatic peak of two quarters ago (mainly from the international markets) has disappeared and things have returned to steady growth rates around the 30% year on year level.

International Stabilises But Growth Rates Declining

A 30% growth rate is great in anyone’s book — but we tend to forget that this isn’t just a Google figure, this is a reflection of growth in the market as traditional forms of advertising fade on the vine and online takes off. Google has done a lot to help it along, but the market has generally been going dramatically in that direction.

As the chart below shows, the market for search outside the US and UK now exceeds at least $23 billion.

Google has at least 80% of that, which we’ll dig into in a few moments, but the two biggest global competitors (non-US, non-UK) are Baidu and Yandex who between them earn around 16% of the total market share.

The Global Search Market Outside The US And UK

The last two quarters of more “muted” growth have seen the huge rate of increase in spending from Google on people and advertising dipping also. Which was the chicken and which was the egg? I guess we’ll never know the answer to that.

What we can say is that the Larry Page inspired shift upwards in gears, has settled, albeit at a higher level. The spend on advertising and staff hasn’t abated, it just hasn’t accelerated to the same degree it did last year.

Google Growth Rates In Headcount & Sales Dramatically Slow

One feature of Google’s last quarter’s report was a drop in the value of clicks at the same time as the number of clicks increased. The Web conference to explain the company’s financial performance this quarter pointed much more at clicks in the mobile sector being part of the cause.

Thanks to the huge rise in Android and a strong increase in mobile advertising, Google has seen a significant rise in the number of mobile clicks on its ads.

The problem is, the value of the resulting clicks is much lower as the chart below seems to show. In fact, the average cost of a click now is less than it was in 2008, according to Google’s own figures extrapolated in the chart.

This is good news for advertisers for sure, but does mean if that’s not the pattern you’re seeing, you may need to think about which types of ad to buy? Might this be a time to consider adding mobile to your portfolio of activity?

Average Value Per Google Click Drops To 2008 Levels

If we correlate the clicks volume to rising revenue divided by the US, International and the rest of the world, if you check out the trends in the red circle below, it does seem that click volume might be putting revenues under pressure.

US revenue is following its normal cyclical pattern of a decline in the first quarter of the year, but looking behind the figures, this decline is actually slightly more than usual.

Mobile ads, and the US decline might all be linked to the lower value of clicks.

Regional Revenues Correlated To Click Volumes

Perhaps more influential on the Google’s psyche and strategy is the concept of a falling global market share outside the US and UK. Our figures show that from quarter 1 2009 to now, Google may have lost as much as 8% market share.

This doesn’t mean that Google isn’t getting people to use it or to use search, but it might mean there’s much more competition for online marketing bucks than there was just a couple of years ago.

These figures are based on publicly declared reports, but they are nonetheless difficult to calculate as all businesses have multiple sources of revenue.

However, just suppose that Google was looking at a similar pattern internally, how would you change your strategy?

I think you’d try spending more on advertising, recruit more people to push the Google message home, focus only those developments that could help take your business forwards competitively and you’d try launching products that trod on the toes of your budget stealing competitors (Facebook?) — namely something like Google+.

Does this sound familiar? Oh this might be a good time to change the share structure to protect your control for the future too — while you still can!

Google Global Market Share Outside UK And US - Estimated

In this situation, many would resort to translation and translation agencies (readers of this column know already what a poor view I have of that) — but that’s not how Niall and the team at Be2 approached the international roll out of their sites internationally.

First a quick bit of background. Be2 is a dating site which operates in 39 countries and 18 languages — pretty global you’d have to say. It relies on international PPC for the recruitment of subscribers who are interested in dating.

Be2's Roll Out Comprised 31 Countries

The challenge for Niall was how to achieve that with a relatively small team operating in so many countries — the approach kept his audience spellbound for 30 minutes.

It was decided to “Hire based on SEM skills and experience, not on language skills. To focus on getting the best SEM account managers we could find and not to limit the profile to certain language sets.”

This is interesting because my concept in business for many years has been the opposite, to recruit people with the right attitude and native language and then to train them the practical skills they need on the job.

Keep Translators As Far Away From Campaigns As Possible

I have always taken the view that it takes years to learn a language correctly — plus a cooperative mother. To train in something as technical as international SEO or SEM is, by comparison, a little easier to do.

Niall did also say they aimed to, “Keep translators as far away from the campaigns as possible.” The Be2 team was actually split into portfolios taking responsibility for a group of countries with specialists advising on areas such as YouTube or Retargeting.

Be2 Allowed Broad Match To Select Its Keywords

The process was to work with a native speaker to get the core words, the most important keywords, for the language. These keywords would then be used to set up a small campaign in Google using the broad match settings. This would then go live for a week or until there was sufficient data. “Let the millions of users decide your keyword list,” said Niall.

The generated keywords would be grouped into campaigns and ad groups using intuition. Google Translate would be deployed to help with understanding what the keywords roughly meant.

Further keywords, plus negative keywords, would be “fished” from broad match occasionally seeking the support of native speakers. Stir and repeat.

The Be2 Internationalization Process

Niall confessed that the most challenging aspect was creating the adtexts to accompany the campaigns, but even here, they found a workable cheat.

Working on the assumption that very high volume keywords are unlikely to contain grammar errors, they created ads from the keywords they saw searched for in high volumes and then tested different versions against each other.

The benefits of the approach were faster development of the the accounts, longer and more accurate long tail, keywords close to what people actually search for and it was easy to optimise going forwards.

Dating Is A High Volume Sport

The approach is fascinating and one I’m sure is used by many more than most would expect. However, before you rush off and fire your agencies, bear in mind the following thoughts.

Firstly, dating is a high volume sport which interests a lot of people.

This type of approach would hold much more risk for business-to-business companies or for businesses operating in very specific niches where the likelihood of the keyword set falling out of Google’s broad match would less — especially if you didn’t get exactly the right terms in the account at the very beginning.

Dating is also a powerful human need which means that people are highly motivated to find a solution even if your adtexts don’t hit the nail on the head when they show up.

If you were trying to sell something like insurance, which people don’t really want to buy, then you’re going to find this approach less successful.

Do The Millions Really Decide?

When you let the “millions of users decide your keyword set,” do bear in mind that that is technically not the case.

It’s Google broad matching algorithm in the first place. The way this works is it is constantly testing new matches to see if people click. If they click, it will continue to be matched up in that way. I imagine, but can’t prove, that Google measure up the conversions it’s seeing in Google Analytics too — but it’s still not exactly that users are “deciding”.

Finally, built into the approach is an acceptance of a certain rate of failure compensated for by the lower cost of implementation. My concern with this, however, is that for many businesses this could lead to the conclusion that, “There’s no opportunity in international search for me!”

I’m not saying that this is not a good approach for some and it may be something you wish to try at first. And when you’ve don’t that — you know where I am!

If accurate Apple’s decision is very analogous to when the company introduced Yahoo and Bing as default search options on the iPhone a couple of years ago. Indeed, it would be strange for Apple to exclude China’s most popular search engine from the default options.

According to Flurry Analytics, China is now the largest market in the world for iOS and Android device activations, having surpassed the US last month.

Macquarie Capital estimated recently that Google made just over $1.3 billion in paid search revenue from its default position on iOS devices. However Google paid $1 billion of that back to Apple according to Macquarie’s analysis.

There’s no comparable amount of mobile revenue at stake for Google in China at this point. Android is also selling extremely well in China, which could offset any traffic losses from a user shift to Baidu on the iPhone. It’s not clear, however, what percentage of Chinese Android handsets use Google as the default search engine. I would assume the majority.

Source: StatCounter

The man’s case was adjudicated on March 19th. He said he found out he lost his job several years ago and was rejected for new jobs due to the suggestions offered by Google. Specifically, when you typed in this man’s name, Google Autocomplete apparently suggested the man’s name along with criminal acts.

The Tokyo District Court approved the petition to require Google to turn off the feature, the Japan Times reported. However, after we initially posted this story based on the Japan Times article, Google sent us this statement:

A Japanese court issued a provisional order requesting Google to delete specific terms from Autocomplete. The judge did not require Google to completely suspend the Autocomplete function. Google is currently reviewing the order.

This is not the first time Google has been in legal trouble over the feature. It lost cases in France and in Italy over Autocomplete, and an Irish hotel has also sued Google over suggestions.

Google does indeed remove some auto-complete suggestions, such as piracy related terms and adult terms. But when it comes to reputation management, Google prefers to let the algorithm do its work.

To learn more about the system, see our comprehensive article, How Google Instant’s Autocomplete Suggestions Work.

Related Stories

• Google Must Censor Google Instant In Italy For Derogatory Suggestions
• Google Removes Piracy-Related Terms From Instant Search
• Irish Hotel Sues Google For Defamation Over Autocomplete Suggestion
• Google Convicted Again In France Over Google Suggest
• At Google Images, “G” Is For “Girls In Bathrooms”
• The Five Words You Can Never Suggest On Google Instant
• Google Instant Search: The Complete User’s Guide
• How Google Instant’s Autocomplete Suggestions Work

A recently enacted law seeks to remove all such content from the internet in India. Facebook, Google, Yahoo and Microsoft were sued under the law and had been arguing in Indian court that it was all but impossible for them to comply as a practical matter. The law makes online publishers potentially liable for the acts of individual users and third parties (think “offensive” blog hosted on Blogger or “objectionable” video uploaded to YouTube).

According to a BBC report Indian Communications Minister Kapil Sibal said the following in December about the desired impact of the new law:

My aim is that insulting material never gets uploaded. We will evolve guidelines and mechanisms to deal with the issue. [The companies] will have to give us the data, where these images are being uploaded and who is doing it.

Google, Facebook and others had argued that they had no control over individuals and should not be held liable for their conduct accordingly. They said they cannot “pre-filter” material generated by millions of users. This is what would be called a “prior restraint” against free speech in the US.

Indian courts have been unsympathetic and demanded that the companies comply or be blocked entirely “like in China.” The BBC says that the companies have now complied and removed offending material at issue in a particular civil lawsuit.

However the overly vague nature of the statute on which these claims are based almost guarantees that Google, Yahoo, Facebook, Microsoft and other online publishers in India will face a steady stream of litigation from individuals or groups “offended” by this or that image, article or video.

Stock image used under license from Shutterstock

Related Entries

• Free Speech Battle In India: Google, Facebook Summoned By Court Over “Inflammatory Images”
• India Set To Bring Heavy Hand Of Censorship Down On Facebook, Google
• EU Ready To Impose Tough Privacy Rules On Google, Facebook
• US Government Makes Most Content Removal Requests To Google So Far in 2011

As Czech Position reports, Google has agreed to several conditions put forth by the Czech Office for Personal Data Protection:

• Google will take photos closer to ground level to avoid photographing personal property over fences/walls.
• Google will give Czech citizens a method to demand that their property be removed from Street View.
• Google will blur license plates/registration information on vehicles.
• Google will pre-announce when it’s planning to photograph in Czech towns and cities.

The concessions are similar to ones that Google has made in other countries.

Google began Street View operations in the Czech Republic back in the spring of 2009, and put images online in the fall. But by December of that year, government officials shut down the service over privacy concerns.

According to The Economic Times, the French commercial court “upheld an unfair competition complaint lodged by Bottin Cartographes against Google France and its parent company Google Inc. for providing free web mapping services to some businesses.”

Bottin Cartographes provides mapping services for a cost, and its website boasts several business clients such as Louis Vuitton, Airbus and several automobile manufacturers.

The French court ruling requires Google to pay $660,000 (500,000 Euros) in damages and interest to Bottin Cartographes, along with a 15,000 Euro fine. That means Google’s total cost from the ruling is about $680,000.

A Google France spokesperson says the company is still studying the court’s decision and reviewing its options, adding that Google is “convinced that a free high-quality mapping tool is beneficial for both Internet users and websites.”

As you can see from the related stories listed below, this is far from the first time that the French have raised legal issues with Google.