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11/30/2010
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Google Faces EU Antitrust Inquiry

Investigators will be looking into claims that Google's business practices stifle competition.

The European Commission, the governing body of the European Union, on Tuesday said that it has begun investigating allegations that Google has abused its dominance as a search engine.

The allegations come from search service providers who claim that their services have been treated unfairly in Google's organic and sponsored search results and that Google gives preferential treatment to the placement of its own services in search results.

The Commission plans to look into charges that Google reduced the search result ranking of competing vertical search services, such as price comparison services, and boosted the search result ranking of its own services. It will also investigate claims that Google lowered the 'Quality Score' for sponsored links of competing vertical search services. An ad's 'Quality Score' influences the price paid by the advertiser and how the ad is displayed.

The Commission also plans to evaluate claims that Google demands exclusivity arrangements with advertisers that limit the ability to place ads elsewhere. Lastly, it will look into whether Google limits competition by making it difficult to move ad campaign data to other advertising services.

In a blog post, Google SVP of product management Susan Wojcicki and VP of engineering Udi Manber attribute the interest of EU regulators to "our success and the disruptive nature of our business." And they repeat a talking point from Google's close encounter with U.S. antitrust regulators in 2008, that "the competition is only one click away."

Surprisingly, Google is not vigorously contesting the charges, suggesting that it may be prepared to make some concessions. A statement offered by a Google spokesperson sounds conciliatory rather than combative.

“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 to take their data with them when they switch services and investing heavily in open source projects," a Google spokesperson said in an e-mailed statement. "But there’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns.”

One area where Google might give some ground would be to allow automated export of AdWords data using the AdWords API. That's currently prohibited under Google's AdWords API Terms & Conditions, and Google's critics have argued it should not be.

Other changes that would affect Google's ability to rank and present search results as it sees fit are less likely -- Google would almost certainly resist efforts to limit its discretion and regulators tend to avoid trying to interfere with corporate autonomy in the absence of truly egregious behavior. But that appears to be what some of Google's competitors want. They believe that Google, a search engine, should present links to other search engines rather than simply listing search results.

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