Report: Google Seeks To Avoid EU’s Antitrust Wrath By “Labeling” Its Own Services

The Financial Times (FT) is reporting that the thrust of Google’s antitrust settlement proposal to European Competition Czar Joaquín Almunia primarily involves “labeling” its own services to distinguish them from other organic search results. According to the FT, citing “people familiar with the search giant’s submission”:

Under the proposal, Google would put its brand on any of its own maps, stock quotes, airline flight details or other pieces of information returned with search results. It is an attempt to resolve regulators’ fears that Google is unfairly squeezing out other specialist information services on the web.

However FairSearch.org preemptively came out with an argument against such an approach a few weeks ago:

The remedy to restore competition must be meaningful and enforceable. Simply requiring Google to accurately label its products, paid search results and advertisements will not undo the harm to competition that Google already has inflicted.

A limited “remedy” will not prevent Google from continuing its other exclusionary conduct, such as preferencing its own services or demoting the rankings of competitive sites. Rather, it would enable Google to retain the fruits of its unlawful conduct and would preserve Google’s dominance. In the end, placement matters far more than labeling.

Emphasis added.

A “labeling solution” would probably look very much like what already exists in the case of many Google “vertical” results:

As indicated by the FairSearch position statement, regardless of whether the label says “sponsored” or “Google results” or something else, critics are unlikely to be satisfied because they’re more concerned with ranking on the page. And such an approach is also unlikely to have any impact on ranking or consumer behavior whatsoever.

Commissioner Almunia is thus likely to push for something beyond pure labeling. It’s unclear what that remedy would be, however.

There are other areas of antitrust “concern” for the EU, most of which are easier to resolve than the issue of “Google ranking its own content” above those of competitor sites. Yet there are many experts and legal scholars who believe that Google has no obligation to particular competitors in the market and that its search results rankings should be under its sole discretion.

An alternative to labeling might be to (somehow) subject Google’s own “vertical” properties to the same rules and algorithm as third party sites. This is not entirely unprecedented. Earlier this year Google demoted its own page promoting the Chrome browser after the page/site violated Google’s own webmaster guidelines.

Indeed there are a number of situations in which Google punished its own sites for violating Google’s own rules. For example, Google demoted all of Google Japan for almost a year for link buying. It also banned AdWords help pages for cloaking. There are more examples as well.

Commissioner Almunia is walking something of a tightrope in this case. He would prefer not to have to formally take action against Google, which will cost money and time and potentially result in a Google victory — or perhaps a only a pyrrhic victory for him. Either scenario would be an embarrassment. However if a settlement deal is perceived as too lenient, he will face numerous and vocal European critics who believe that Google is a monopoly and must be restrained.

A great deal is riding on the terms of any settlement because it would likely influence the approach of the US Federal Trade Commission, which has said it will wrap up its investigation and make a determination about any action against Google by the end of the year.

Related Topics: Channel: Industry | Google: Antitrust | Google: Critics | Google: Legal | Google: Outside US | Google: Web Search | Top News

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • Molses

    Yes, google ads should not be more than half screen height. For some queries google fills full page until scroll with their ads or own service. At least 3 organic results should be visible on search results page.

  • Yousee

    Google is using its power, the SE giant has now become money oriented. Go for adword or else go down….

  • Juggernart Games

    It’s no secret: Ads above fold and especially ads on top of search results get the most clicks. And it doesn’t matter wether they are labeled or not.
    From time to time I can watch average internet users when they google for something: They click a lot on one of the first results, no matter if it was an ad or not. They don’t even notice that it was an ad. It seems that the “ads related to…” label on top of the ads wasn’t noticed and the slightly different background color seems to make the ads even more attractive (or more relevant to the user).
    Google can put it’s brands or labels whereever they want, the average internet user will not notice or will not care for. The average internet user does not know much about adwords or ads on search results (if at all), they think they use a search engine that shows the most relevant results on top.
    If Google would primarily care for organic search results (as it does long time ago) it would not show ads on top of them. Ads to the right or at bottom or maybe within but below fold would be ok, though Google would loose a lot money then.

  • http://twitter.com/HyperTexted Kevin Gerding

    Google has become nothing more than a bid engine using organic listings as something to fill in the blanks. If Google is going to pursue such a business model, then they should be paying royalties to webmasters.

  • http://www.seo-theory.com/ Michael Martinez

    If regulators allow Google to do this, they will be giving it free rein to create a new Google brand for consumer information. Hopefully they won’t be that naive.

  • http://www.facebook.com/profile.php?id=1195911909 Myles Crouther

    This is a free service that users choose to use. They have the option to use anything else. You don’t even need an account to search, why does it matter if Google places ads in the search results? How else are they going to make money? Would you rather pay Google $1 per search? Or do you want a free service? If you choose a free service, then you are subject to advertisements, it’s completely fair. It’s not like there aren’t other search engines you could use, consumers just refuse to check them out. For the average consumer, any modern search engine is enough. Their search engine isn’t open source, it’s a product, and you pay for it with your attention (to ads), if you don’t want to use it, Google’s competitors are even easier to type in, example: bing.com. Bing has 2 less characters than Google AND the letters are closer together…

  • craig

    even if google subjected it’s own pages to the algo, that is no guarantee that they will start slipping down the rankings. don’t they partly rank pages on “trust” now? low quality amazon and wikipedia pages all seem to get a boost based on their parent site. the name “google” will presumabely benefit from that too. so their low-quality pages will rise to the top just like those others.

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