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Open Letter To EU Competition Commissioner Exerts Pressure For Tougher “Vertical Search” Settlement With Google
Late last week, a group of Google critics, rivals and complainants sent an “open letter” to EU competition commissioner Joaquín Almunia asking him to focus on the “vertical search” or “search neutrality” dimensions of the Google antitrust case. The letter says, essentially, that of the “four areas of concern” raised by the EU over Google’s business practices, this is the only issue that really matters.
The letter asserts that the EU must address “Google’s search manipulation practices” in the form of “the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services.” The signatories worry that any settlement that emerges won’t be sufficiently tough on Google.
They’re specifically concerned about a potential “labeling” approach that identifies Google search products or properties (e.g., Travel, Shopping/Products, Maps) as such but without also limiting Google’s ability or discretion regarding how it presents those results. They see such an approach as purely symbolic and, thus, meaningless.
The open letter is part of a campaign of increasing public pressure (or “shaming,” if you like) directed toward European regulators, but Almunia in particular, to compel him to take a hard line or look soft.
The FTC settled earlier this year with Google and declined to pursue the “search neutrality” question because US law would have made it very difficult for the agency to win on that issue. The EU, arguably, has more discretion in this area than did US regulators.
Commissioner Almunia himself has explicitly said that there will need to be some concessions from Google on vertical search (or “diversion of traffic“). He previously stated, “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.”
The EU is currently studying Google’s settlement proposal, but indicated that there probably wouldn’t be any decision or action until after August, when much of Europe takes a holiday.
Below is the full text of the March 21 letter:
Dear Vice-President Almunia,
RE: COMP/C-3/39.740 – Foundem / Google and associated cases
We are writing to express our common views on the European Commission’s ongoing settlement negotiations with Google. The Commission opened proceedings more than two years ago, and we are becoming increasingly concerned that effective and future-proof remedies might not emerge through settlement discussions alone.
The first point we would like to raise is that the anti-competitive impact of search manipulation far outweighs the Commission’s three other areas of concern regarding Google’s business practices. In addition to materially degrading the user experience and limiting consumer choice, Google’s search manipulation practices lay waste to entire classes of competitors in every sector where Google chooses to deploy them.
The second point we would like to raise is that there are two equally important aspects to Google’s search manipulation practices: the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services. Any effective remedies will require explicit commitments to end both aspects; remedying one without remedying the other would simply allow Google to recalibrate the un-remedied practice in order to achieve the same or equivalent anti-competitive effect.
Thirdly, we are convinced that Google’s strict adherence to the following overarching principle would ensure an end to both aspects of Google’s search manipulation practices:
Google must be even-handed. It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.
We will respectfully withhold judgment on Google’s proposed commitments until we have seen them, but Google’s past behaviour suggests that it is unlikely to volunteer effective, future-proof remedies without being formally charged with infringement. Given this, and the fact that Google has exploited every delay to further entrench, extend, and escalate its anti-competitive activities, we urge the Commission to issue the Statement of Objections.
CEO and Co-Founder, Foundem
Director Government Relations, BDZV Federation of German Newspaper Publishers
Dr. h.c. Hans Biermann,
Chief Executive Officer, Euro-Cities AG
Senior Vice President Government and Corporate Affairs, Expedia Inc.
Managing Director, Hot Maps Medien GmbH
Director, Streetmap EU Ltd
Senior Vice President, General Counsel, TripAdvisor
CEO and co-Founder, Twenga
Dr. Christoph Fiedler,
Managing Director European Affairs and Media Policy, VDZ German Federation of Magazine Publishers
President, VfT Verband freier Telefonbuch und Auskunftsmedien e.V. (Association of Independent Directory Publishers)
Founder and Managing Director, Visual Meta GmbH