Google un­fairly curb­ing web ads and skew­ing search, EU al­leges

Weekend Argus (Saturday Edition) - - MEDIA& MARKETING - AOIFE WHITE STEPHANIE BODONI

WASHINGTON: Google faces a new an­titrust at­tack from EU reg­u­la­tors who al­lege the search en­gine skews shop­ping re­sults in its own favour and un­fairly re­stricts ri­val on­line ad­ver­tis­ing plat­forms.

The Euro­pean Com­mis­sion sent the Al­pha­bet unit two state­ments of ob­jec­tions on Thurs­day, widen­ing a five-year probe and in­creas­ing the risk of hefty fines for the US in­ter­net gi­ant.

Adding to an an­titrust com­plaint over Google’s An­droid smart­phone soft­ware in April, the EU said it has “a broad range of ad­di­tional ev­i­dence and data” that Google sys­tem­at­i­cally favours its own com­par­ison­shop­ping ser­vice in its search re­sults and that smaller ri­vals lose traf­fic when they ap­pear lower down in re­sults.

It re­jected Google’s ar­gu­ment that its chief shop­ping search ri­vals are Ama­zon and eBay.

“We see that hap­pen very, very, very of­ten,” EU An­titrust Com­mis­sioner Mar­grethe Vestager said, about how of­ten Google pushes its own ser­vices to the top of search re­sults. “This is where we have the strong­est ev­i­dence and it’s the same kind of in­ves­ti­ga­tion that we are pur­su­ing when it comes to travel and lo­cal search to see if we find a pat­tern that sug­gests that Google is abus­ing a dom­i­nant po­si­tion in gen­eral search.”

Google also hin­dered com­pe­ti­tion for on­line ads with its AdSense for Search prod­uct which places ad­ver­tis­ing on web­sites, in­clud­ing re­tail­ers, telecom­mu­ni­ca­tions op­er­a­tors and newspapers, the com­mis­sion said. While its Euro­pean mar­ket share is more than 80 per­cent, AdSense con­trib­uted less than 20 per­cent of Google’s to­tal ad rev­enue last year, a per­cent­age which has de­clined steadily since 2010.

The com­pany pre­vented cus- tomers from ac­cept­ing ri­val search ads from 2006 and main­tained re­stric­tions on how com­peti­tors’ ads were dis­played when it al­tered con­tracts in 2009, ac­cord­ing to the EU’s an­titrust arm.

“We be­lieve that our in­no­va­tions and prod­uct im­prove­ments have in­creased choice for Euro­pean con­sumers and pro­mote com­pe­ti­tion,” Google said on Thurs­day. “We’ll ex­am­ine the com­mis­sion’s re­newed cases and pro­vide a de­tailed re­sponse in the com­ing weeks.”

The EU has ex­panded its in­vesti- gations into Google’s busi­ness prac­tices since Vestager took over as the bloc’s an­titrust chief in late 2014.

“This demon­strates her de­ter­mi­na­tion to pur­sue the mat­ter vig­or­ously and to fol­low the in­ves­ti­ga­tion wher­ever it leads,” said Thomas Vinje, a lawyer with Clifford Chance who rep­re­sents FairSearch Europe, whose mem­bers in­clude Ex­pe­dia and Nokia.

“Ad­di­tional state­ments of ob­jec­tions have proved nec­es­sary in sev­eral other com­plex, high- pro­file cases against de­ter­mined op­po­nents, in­clud­ing both Mi­crosoft and In­tel in the early 2000s,” Vinje said.

The shop­ping search probe, opened in 2010, al­leges Google doesn’t sub­ject its own ser­vice to its al­go­rithm, which ranks search re­sults on qual­ity and rel­e­vance to the user. It may also set a prece­dent for other ser­vices, such as flight, travel and map­ping.

EU in­ves­ti­ga­tors use a soft­ware tool to check how Google dis­plays re­sults when peo­ple search for prod­ucts. This ev­i­dence could be cru­cial in prov­ing the com­pany re­stricts what users see and in show­ing that ri­vals lose web traf­fic as a re­sult.

“The com­mis­sion refers to ev­i­dence that Google harms the mar­ket; it will be im­por­tant to show what this ev­i­dence is as our re­search shows a thriv­ing mar­ket with record lev­els of in­vest­ment into e-com­merce in Europe,” said James Water­worth, Europe vi­cepres­i­dent of the Com­puter & Com­mu­ni­ca­tions In­dus­try As­so­ci­a­tion, which speaks for tech­nol­ogy com­pa­nies in­clud­ing Google.

Aside from Google an­titrust scru­tiny on at least three fronts – search, ad­ver­tis­ing and An­droid – the EU is also prob­ing com­plaints on its use of copy­righted con­tent from pub­lish­ers.

EU tech­nol­ogy reg­u­la­tors have hinted at pos­si­ble rules on le­gal li­a­bil­ity for on­line plat­forms like Google. – Washington Post

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