European Commission investigates Google’s alleged abusive practices in online search services

On 30 November 2010, the European Commission (see Newsletter 2/2010, p. 9) opened a formal investigation into Google’s allegedly abusive conduct in its provision of online search services, in violation of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) thereby relieving National competition authorities of the Member States of their authority to apply EU competition law.

The investigation follows complaints lodged by, among others, Ciao.de (a German subsidiary of Microsoft), Foundem.co.uk, a UK price comparison site, and EJustice.fr, a French site specializing in legal search inquiries, all of which appear to have raised a similar grievance that Google’s search algorithms somehow penalize their Web sites in Google’s unpaid and sponsored search results, giving preferential treatment to its own services.

Simply put, the investigation will ultimately answer the fundamental question of whether Google has a right to program its search engine algorithms and presentation mechanisms the way it wants or whether it is abusing its market power in the search engine market.

In particular, the Commission will investigate Google’s use of exclusionary automated penalties, which can remove legitimate sites from Google’s natural search results, irrespective of relevance. More importantly, the investigation will focus on Google’s Universal Search, a mechanism for automatically inserting its own services into prominent positions within its natural search results.

The issue is therefore whether Google leverages its search engine monopoly into new domains, such as financial search, travel search, property search, etc. The investigation will thus shed some light onto whether Google’s search engine, which Web users perceive as a neutral tool, is becoming a gate keeper that Google uses as a marketing channel for its own other services.

The Commission investigation will also look into whether Google imposed exclusivity obligations on advertising partners with the aim of preventing them from posting ads from Google’s competitors on their sites and whether Google made it more difficult for customers to move data from their advertising campaigns to other ad platforms.

There is no legal deadline for completing the investigation, but it will very much depend on Google’s cooperation with the Commission.  [Gabriele Accardo]

 

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