EU to investigate Google after complaints

After complaints from European companies about their search rankings, regulators are seeking information on how Google's secretive search algorithms work.

And so it begins: the European Commission has opened an antitrust investigation of Google.

The Telegraph reported late Tuesday that European regulators have sent a letter to Google asking the company to explain how it ranks search results and advertising after complaints from European businesses such as Foundem, a price comparison site, and Ciao, another price comparison site owned by Microsoft. Those companies--Foundem in particular--have long complained that Google penalized their Web sites in search results under competitive pressure.

Google confirmed that it has received an inquiry from European regulators but denied any wrongdoing. "While we will be providing feedback and additional information on these complaints, we are confident that our business operates in the interests of users and partners, as well as in line with European competition law," the company said in a blog post.

It seemed like only a matter of time before a major regulatory agency opened a formal review of Google. The company has faced extreme scrutiny over the past several years as it has come to dominate the Internet. Google's share of the search and search advertising markets in Europe is even higher--around 90 percent--than it is in the U.S., where Google has come to know its regulatory counterparts quite well during the first year of the Obama administration.

In August, Foundem complained that Google was penalizing its site in search results, suggesting it was because the company was threatened by Foundem's business model. Google denied any ill intent at that time, saying that Foundem was just like any other Web site in that it needed to produce relevant content to stay in the top search results.

In its blog post Tuesday, Google implied that the complaints from Ciao were directed from Microsoft, easily its biggest rival in the tech industry. "Regarding Ciao!, they were a long-time AdSense partner of Google's, with whom we always had a good relationship. However, after Microsoft acquired Ciao! in 2008 (renaming it Ciao! from Bing) we started receiving complaints about our standard terms and conditions," Google said.

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