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European Union Opens Antitrust Investigation of Google

Antitrust regulators in the European Union (EU) announced today that they've opened an investigation into Google's business practices, seeking to discover whether the online juggernaut has abused its online search dominance to harm competition. According to the European Commission (EC), the antitrust investigation is the result of complaints by smaller Google competitors that have been shut out of markets by Google's unfavorable treatment.

"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 which are specialized in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services," a statement by the EC reads. "The Commission will also look into allegations that Google lowered the 'Quality Score' for sponsored links of competing vertical search services. The Quality Score is one of the factors that determine the price paid to Google by advertisers."

The statement continues: "The Commission's probe will additionally focus on allegations that Google imposes exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their websites, as well as on computer and software vendors, with the aim of shutting out competing search tools. Finally, it will investigate suspected restrictions on the portability of online advertising campaign data to competing online advertising platforms."

Perhaps not surprisingly, some of the complaints originated with Microsoft. The software giant's Germany-based price-comparison site, Ciao, complained that its organic listings were purposefully demoted on Google's search engine, as did Foundem and eJustice. Those companies are based in the United Kingdom and France, respectively.

Google says it's done no wrong. "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," a Google statement reads. "But there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns."

There's no timeline on the investigation, though a spokesperson for the EC noted it could take "a couple of months." If found guilty, Google could face a fine of 10 percent of its revenues, or about $2.4 billion based on its previous fiscal year. Although such a fine is unlikely, it's not unprecedented: The EC has fined Microsoft over $2 billion and Intel about $1.4 billion for separate sets of antitrust violations in the recent past.

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