Google faces EU antitrust probe over search rankings and ads
By Mail Foreign Service
Last updated at 2:25 AM on 25th February 2010
Google said the investigation revolves around how it ranks websites in its search results
Google is facing a preliminary investigation by the European Commission into allegations that it demotes rival sites in its search rankings.
Three complaints about unfair competition have been made against the world’s number one search engine.
A British and a French firm have complained about being ranked low in the U.S giant’s searches while Microsoft Corp’s Ciao! from Bing has filed a complaint about Google’s standard terms and conditions.
The low rankings complaint is significant because high rankings in Google searches drive higher volumes of traffic to websites.
It is the European Commission’s job to ensure that companies do not abuse any dominant position in the 27-country EU.
They can fine firms up to 10 per cent of their revenues for violations.
It has to date imposed billions of euros in fines against Intel and Microsoft for abuse of market dominance.
But in a statement today, issued after the US search engine operatorfirst revealed it was facing complaints, the commission said there isno formal investigation so far.
HOW DO THE RANKINGS WORK?
The algorithm that Google uses to rank websites is a closely-guarded secret. There are a number of factors that determine a website’s position but the precise correlation between them is unknown. Google has 65 per cent of market share in the US and 90 per cent in the UK which is why it is crucial for businesses that they rank highly in search results. One of many determining factors appears to be the number of links pointing to a webpage. The trust and authority of the site is also reflected in the rankings.
Should one take place Google would have to prove that it had acted within European Union law and could have lay bare its closely-guarded business secrets.
In its statement today, the EU executive said: ‘The Commission can confirm that it has received three complaints against Google which it is examining. The Commission has not opened a formal investigation for the time being.’
It did not identify the companies.
However, earlier in a blog, Google said that British price comparison site Foundem and French legal search engine ejustice.fr had alleged that its search engine demoted their sites in search results because they were rivals.
It said Microsoft-owned Ciao from Bing had complained about its standard terms and conditions.
Google said it had done nothing wrong and was confident it would not face a formal investigation.
‘This is the beginning of an inquiry, in all likelihood it will not go anywhere. The Commission has not expressed any hint of guilt,’ said Julia Holtz, Google’s senior competition lawyer.
Google had 90 per cent of the global search market compared with 7.4 per cent for a combined Yahoo and Bing.
It has drawn increasing regulatory scrutiny as it has grown.
U.S. antitrust authorities have challenged Google’s settlement with book publishers and authors groups to create an online digital archive, and are seeking more information on the competitive impact of its proposed 486million purchase of mobile advertising company AdMob.
Google’s Mrs Holtz said: ‘Our algorithms [the method by which firms are placed] aim to rank first what people are most likely to find useful.’
She said after Microsoft acquired Ciao! in 2008 ‘we started receiving complaints about our standard terms and conditions’, an issue that now stands before the EU antitrust office.
Mrs Holtz said while Foundem and ejustice.fr on the one hand, and Ciao! from Bing on the other, raise ’slightly different issues, the question they ultimately pose is whether Google is doing anything to choke off competition or hurt our users and partners. This is not the case’.
Here’s what readers have had to say so far. Why not debate this issue live on our message boards.
The comments below have been moderated in advance.
Love it or hate it, Google is the most popular search engine and for most people it IS the internet. In fact most internet users would be lost without it.
I think that Google is quite aware of it’s dominent position, and guards it very protectively. They are constantly under scrutiny from competing websites, and websites in general looking for any clue that preference may be given to one website over another. I can say – as a website owner of more than 12 years, that I find this highly unlikely. They have far too much to lose to engage in such tactics, and they don’t need to anyway. They just aren’t bothered about users websites as much as people would like to think. Their main driving ambition is to deliver the best website for a particular search – and that’s it. Having made a fortune along the way is just a bonus for them.
Websites that appear at the top of searches are deemed to be ‘The best’, as far as Google’s algorithm is concerned anyway.
- Rentals365, Birmingham England, 25/2/2010 18:23
Power corrupts and absolute power corrupts absolutely.
With 90% market dominance, what does anyone expect?
- Richard, London, 25/2/2010 09:00
When searching for a company I know by name but not websie address, it is often on the second page,behind ebay ads etc !! The usual suspects are often at the top of every search, so it’s obvious they are paying to have this happen.
- Billy McGregor, Rothesay Isle of Bute, 25/2/2010 07:55
Whenever I hear someone tell me to “just Google it” I want to scream. There are far better search engines. Try Ask for example; rather than having ten billion answers to a simple question it will tell you straight away.
- Brett McBain, Heraklion, Crete, 25/2/2010 00:15
Doesn’t the CIA have a vested interest in Google , quite a large shareholding I think I can remember reading somewhere?
- J Garratt, Northants, 24/2/2010 23:40
I’ve never heard of Bing.
Nor would I dream of using any search engine other than Google, simply because they are so reliable.
As for adverts, what adverts? I never even take any notice of them.
That’s why I tape (old fashioned I know) all my programmes with adverts in so that I don’t have to watch them.
When companies wake up to the fact, that probably about 50% of television viewers or Google users ignore adverts which pay for or sponsor their programmes or search engines then we’re naffed, & so will we be ‘cos we’ll have to start paying more to watch or use them.
- DD, Floating Somewhere on Planet Earth, 24/2/2010 21:33
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Google faces EU antitrust probe over search rankings and ads
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