EC launches antitrust probe against Google

Regulators to probe whether Google abused its dominant position as a search engine by unfairly favoring its own services in search results over those from competitors.

The European Commission announced today that it's opening an investigation of Google over alleged antitrust practices in the European Union.

The probe was triggered by complaints from three search providers, which claim that Google has stifled them by unfairly manipulating certain factors related to both unpaid and paid search results.

The search providers leveling the charges are Foundem, a U.K. price comparison site; ejustice.fr, a French legal search engine; and Ciao, a U.K. search engine owned by Microsoft. These three Web sites offer vertical search services, which means they provide users with specific online information, such as price comparisons.

As part of its probe, the EC said it will examine whether Google lowered the rankings of the services provided by the three Web sites while giving its own vertical services preferential treatment in unpaid search results.

Further, the Commission will check into allegations that Google lowered the "Quality Score" for paid, sponsored links of the three competing vertical search providers, a complaint made by Foundem, according to Google. The Quality Score is one factor that determines the price advertisers pay to Google. If two advertisers use the same keywords, the one with the lower Quality Score has to pay more to rank evenly with the one that has the higher score.

Finally, the EC will examine whether Google imposed exclusivity obligations on advertisers, a complaint that Google said was raised by Ciao. Such obligations would prevent advertisers from using the same ads they use on Google on their own Web sites or on competing search engines such as Bing and Yahoo.

With Google presumed innocent unless proven guilty, the EC said that the probe doesn't imply that it has any proof of antitrust violations. "It only signifies that the commission will conduct an in-depth investigation of the case as a matter of priority," the Commission said in a statement.

The EC first looked into the complaints from the three search providers back in February . At that time, a Google blog defended the company's position saying that its search results are based on algorithms that try to take into account what people may find the most useful. Google also said that it has nothing against vertical search providers and that certain ones rank high in its results.

In a response to a request for comment, a Google spokesman e-mailed CNET its statement on the probe:

"Since we started Google we have worked hard to do the right thing by our users and our industry, ensuring that ads are always clearly marked, making it easy for users to take their data with them when they switch services and investing heavily in open source projects. But there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns."

Google also defended its ranking system to CNET, explaining that its algorithms rank higher-quality and more relevant sites above lower-quality and less relevant sites. Some sites unhappy with their rankings have sued Google over the years, but those were suits the company said it has won .

Looking at the sites that triggered the EU's probe, Google said that both it and independent sources have found them to generally be of lower quality. The company cited Foundem's content as being duplicated from other Web sites, a factor that has led to its low ranking in search results. Ejustice.fr uses Google's own search service to provide its results, another factor that has resulted in a low ranking.

In addressing the complaints made by Ciao over exclusivity obligations, Google said its advertisers are not restricted from advertising on other search engines and that they're free to use platforms other than AdSense, Google's online ad network, on other sites.

Google added that it previously had a good relationship with Ciao, which was a long-time partner of AdSense. But when Ciao was bought by Microsoft in 2008, the relationship apparently turned sour as Google began hearing complaints about the terms and conditions of its contract from Ciao.

Updated at 8:56 a.m. PT with additional background and comment from Google.

 

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