The European Commission has launched an antitrust investigation targeting search giant Google, sparked by three complaints from minor search engines and websites alleging the company is manipulating search results to promote its own services over other search results in order to maintain market share.
The announcement has sent shock waves throughout the tech community, with Google’s shares dropping nearly 5% to $US555.71 overnight.
The companies that lodged complaints – comparison site Foundem, French legal search engine ejustice.fr and shopping site Ciao, which is also owned by Microsoft – say links to their own sites are appearing too far down the list on Google results pages.
These sites say that when their pages appear on the same page as a Google service, such as a product aggregator, they are ranked well below the Google service.
The investigation comes after similar action was taken against Microsoft and Intel earlier this year, with both companies slammed with fines over $US1 billion.
In a statement, the Commission said it will investigate whether Google actually has the ability to program its services to appear in its own way, or whether it is actually abusing its position.
“The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services… and by according preferential placement to the results of its own vertical search services in order to shut out competing services.”
The Commission has informed the US Department of Justice of the investigation, which it says will take several months. Competition commissioner Joaquin Almunia told the Parliament that the investigation has only begun and it is too early to say what information Google must be forced to reveal, on questions that its algorithm may be subject to scrutiny.
“But we will investigate in-depth potential concerns as regards to Google’s conduct, notably on the way in which search results are set out,” he said. “Vigorous competition of all players, including smaller and innovative ones must be preserved for the future.”
The investigation will also take a look at whether Google has lowered the “Quality Score” for sponsored links of competing services.
The sites themselves filed complaints back in February, but action is only being taken now. The sites have accused Google of deliberately marking down their own services, with Foundem saying in a statement that Google is “stifling innovation”.
Google controls much more of the search market in Europe, (about 90%), and there is a sentiment among smaller businesses that the internet giant feels it can get away with much more in other countries than in the US.
The move has been welcomed by some legal groups, including the European Initiative For a Competitive Online Marketplace. The group’s legal counsel has said in a statement that a “thorough investigation is necessary to determine the workings of Google’s black box”.
Google has launched its own defence, saying that there are good reasons why these sites aren’t performing well. It specifically says Foundem duplicates nearly 80% of its content, and that “we have consistently informed webmasters that our algorithms disadvantage duplicate sites”.
Google has previously defended its ranking structure, saying that its algorithm treats all sites equally. But the company is wary to show the structure of its algorithm to anyone.
“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 and advertisers to take their data with them when they switch services, and investing heavily in open source projects,” Google said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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