Will the European Commission launch a formal investigation into Google?

On 24 February 2010, the European Commission issued a statement on press reports on complaints against Google’s conduct on search advertising, where the U.S. internet giant has a dominant position.

While the Commission confirmed that it has received and is examining three complaints (one apparently referred to it by the German Bundeskartellamt), it has not opened a formal investigation yet.

Google, informed by the Commission on the complaints, will provide comments on the allegations with the aim to prevent the opening of a lengthy formal investigation (and the imposition of sanctions) under Article 102 of the Treaty on the Functioning of the European Union, which prohibits abusive conduct by dominant companies.

The three complaints lodged by Ciao.de, a German subsidiary of Microsoft, as well as Foundem.co.uk, a U.K. price comparison site, and EJustice.fr, a French site specializing in legal search inquiries, appear to likely raise a similar grievance that Google’s search algorithms somehow “penalize” their Web sites in Google’s search results, allegedly because the three complainants are direct competitors as vertical search engines (unlike a general Web search engine like Google, a vertical search engine focuses on a specific segment of online content).

Yet, although market dominance is not, in and of itself, sufficient cause for antitrust sanctions, it is true that Google’s search advertising business is increasingly attracting the attention of national competition authorities in Europe.  The Commission stated that it is closely cooperating with national competition authorities. [Gabriele Accardo]