EU wades into Google antitrust probe

Europe has launched a full-frontal attack on internet giant Google, formally opening an antitrust probe after rivals accused the Silicon Valley giant of rigging the online search market.

European Union competition watchdogs on Tuesday announced their investigation, after smaller companies accused Google of 'unfavourable treatment' of their services in both unpaid and sponsored search results, the crucial listings that make the web navigable.

Competition authorities are also probing whether Google's own services - including YouTube video, book-scanning project or telephony - are getting 'preferential placement' when users punch in search queries, some of which may lead to consumer spending.

Brussels 'will conduct an in-depth investigation of the case as a matter of priority,' a statement said.

Already nine months in gestation, however, it carries echoes of a decade of antitrust pursuit of fellow computer giants Intel and Microsoft - each of whom copped billion-euro fines in total - over issues from PC chips to web browsers.

An investigation does not necessarily trigger legal action, but the latest blow for the company comes on top of an earlier rap from France over restrictive advertising practices and ongoing national probes in Germany and Italy - not to mention its Street View application raising vociferous privacy concerns.

Google's share of the EU's online advertising was last pegged at around 30 per cent in 2008.

Its part of the core US search market grew to 66.1 per cent in September, according to industry tracker comScore.

The company posted a 32 per cent leap in net profit to 2.17 billion dollars between July and September, its latest available results.

One of the complainants, British search site Foundem, said in a lengthy statement outlining its February complaint that Google's methods 'stifle innovation, suppress competition, and erode consumer choice.'

The commission wants to check if Google was 'lowering the ranking of unpaid search results' and examine other allegations of advertising interference including the imposition of exclusivity clauses, restricting ads from competing providers and data on consumer impact.

'When a user searches for queries like 'flights from San Francisco to London,' we think the most useful answer is showing fares and flights, not just a collection of links,' a Google spokesperson argued.

The company said it would cooperate with the probe, saying: 'There's always going to be room for improvement, and so we'll be working with the commission to address any concerns.'

Insisting 'ads are always clearly marked,' the spokesperson set the tone for the battle ahead by recalling that 'sites have complained and even sued us over the years, but in all cases there were compelling reasons why their sites were ranked poorly by our algorithms.'

Microsoft's portion of the US search market improved a fraction to 11.2 per cent, while that of Yahoo! slipped from 17.4 per cent in August to 16.7 in September, comScore reported last month.

Approximately 12.4 billion dollars will be spent in the United States this year on ads on search engines, with Google expected to rake in 73.3 per cent of that cash, according to eMarketer.

Story source: ninemsn