The European Commission has decided to open an antitrust investigation into allegations that Google has abused a dominant position in online search, in violation of European Union rules. 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.
I’m kind of at a loss for the reasons behind this investigation. I could understand if the internet were the only way to receive information, we’d have reason to be freaked out, but what the allegations are is that Google is doing something like printing a full-page ad for customers that pay more, and a half-page ad for customers that pay less. This is not about disallowing competitors ads on their service, or charging differential pricing which would lock them out, or even coming out with new free products to undercut any new markets. It’s simply about paying to receive value for a service, and paying more to receive more, which is at the heart of any capitalist economy.
tl;dr: The EU needs to do more than playing to whatever political low-hanging fruit there might be at any given time.
I think the concept is that they claimed there was no manipulation of the search results, not that there was open bidding for those spots.
And Google controls roughly 70 or 80 percent (?) of the search market which is how a LOT of people get information.
Edited 2010-12-01 06:09 UTC
Google actually controls in excess of 90% of the search market in Europe.
Hey, Google is a BUSINESS. It shouldn’t be under any obligation to advertise its competitors at all, and if it does allow this to happen then it should be perfectly legal to advertise the competitor’s service in a smaller space than their own service.
The EU believes that Google is gaming search to make additional money (or extending the reach of its own services) by giving itself and its partners higher relevance than they would get with an impartial algorithm. Under normal circumstances, if Google didn’t control so much of the market, this wouldn’t be a big deal because the impact would be small. But since Google has greater than 90% market share in search in Europe, it has monopoly power and, therefore, has to play by different (aka impartial and non-prejudicial) rules because the impact of trying to leverage a monopoly to gain entry into other markets is much worse.
My guess is that the EU will start regulating Google’s search algorithm as a public utility — meaning, that the details of the PageRank algorithm will be carefully reviewed by expert, court-appointed ‘masters’ — which would be really, really bad for Google. Good for consumers, though. It will mean better, more relevant search results.
Investigate how to get some more xmas cash for themselves. Same pathetic shit they pulled with ms, pay some chop change so we can put it into the new europe build infrastructure fundz. Which getting wired into our accounts.
AS I recall some guy successfully sued google in this year because of their google earth cams and come out with 100k.
EU is incapable doing anything against these companies anyway.
I’m very happy the EU keeps close tabs on large companies. Even if they don’t do anything wrong, this keep them on their toes. Good stuff.
In spite of no real reason behind the investigation? I remember the lyrics to a song (by Kim Richer?) that said “I don’t like the foreman standing over my shoulders”. Who would like that? Would you? Would you like that if you were the head of Google?
So far, I haven’t known of any anti competitive actions or anything that breaks the law from Google.
Instead of launching a “probe” that will last months on the basis of unhappy competitors whining, the EC should investigate what one of you guys, Thom or Kroc, said in a podcast, which is Apple preventing people in a country from buying from a non-domestic itunes store. Which, as you said, is an Apple practice, and is forbidden by the EU laws or regulations or what else.
The EC should take action to set a minimal support period from phone makers instead of leaving owners of recent devices stranded when the newer ones hit the market. They should make laptop manufacturers provide batteries for a long time instead of leaving me without a battery replacement option less than 18 months after the purchase. I was so frustrated I once thought about standard batteries but I know the variety of form factors makes the idea much more unrealistic than all new phones supporting USB. Now I have two laptops that will never see a battery again. Either force manufacturers to provide support or standardize batteries.
My point is that if “keeping big companies on their toes” is the only reason, the commission has some obviously (adverb purposely placed here) better things to do.
As a side comment, Google has been the target of several attacks recently. Although I don’t use their services other than search (and maybe Youtube from time to time), I am feeling an envious atmosphere that other companies are creating around Google, as if they were wondering how they could manage to sip drops of milk from that cow. Example: just last week, some French telecom companies (led by Orange) expressed their desire to make big “data providers” contribute to their (telecom companies’) infrastructure costs. The excuse? Youtube and its bandwidth consumption. “Big data providers” and the only company they cited is Google… I wondered why they didn’t mention Dailymotion or any of the Redtube-like sites. Did Apple help AT&T upgrade their mobile network years ago? Then, another day, comes the “Google has users in France, makes profits thanks to those users, but doesn’t pay any taxes in France, that’s not normal”. So what? Google should pay taxes in all countries where people use their services? Sometimes the envy can’t hide the stupidity of greediness.
Let a company go long enough and then by the time the government begins checking in on it, there’ll already be evidence that damage has been done. I’m not from a European country, but I don’t see anything wrong with the EU examining Google’s business practices. Look at Microsoft and the US anti-trust situation: many companies were already unfairly crushed and buried by the time this damn country decided to even look into it, let alone do anything about it. Maybe if they were actually, you know, DOING SOMETHING and not sitting on their asses, various past companies, operating systems and software would still be around today.
Edited 2010-12-01 19:10 UTC
I don’t contest any part of what you wrote. But why Google? Why not other companies as well? Why don’t they set an office or institution devoted to watching big companies? Google is certainly not the only “big company” that’s capable of hurting competing companies.
That, combined with what I heard last week on local radios, makes me think that people (companies) are coveting something, whatever that thing is, from Google.
Well, the news story is about Google being watched. That’s the reason I only mentioned Google. AFAIK, Microsoft is already being watched more closely by the EU (although people like Paul Thurrot obviously disagree, good!). IMO, any massive multinational company large enough (especially those with near-monopolies) should be watched extra well for illegal behavior, *before* they start actually doing it. Just like computer viruses–prevention is key, once it’s happened, it’s happened and there’s usually no turning back. Just look at Be and Netscape–no second chances for them.
Edited 2010-12-01 22:06 UTC
That’s absurd. Refusing to investigate possible violations of the law would be a stupid thing to do.
Of course they have to take such complaints seriously.
That’s one of the ironies of antitrust law: You can’t know that you’ve broken the law until AFTER you’ve been deemed a monopolist. So, in a lot of ways, it isn’t fair.
Nonetheless, I think it’s reasonable in this case to open an investigation into the allegations; if nothing else, it will settle the issue of whether Google has a monopoly on search and whether it must play by different rules. Which (I would assert) it is and it must.
Huh? Of course you can know if you broke the law or not. The law isn’t that difficult to understand. Not more difficult than any other law, at least.
Ok, I’ll bite. What is your understanding of the anti-competition law?
In the 1990’s DR-DOS had a healthy market share in Germany, but within twelve months Microsoft had wiped it out completely with a series of properly anti-competitive measures.
Ever since the EU failed to prevent this they seem to have overreact to lots of tech anti-trust cases.
I think if no wrongdoing is found the complainants should be made to pay for the investigation rather than the taxpayer.
There wasn’t EU in 1990 you ignorant.
The OP said “In the 1990’s”. This refers to the whole decade, from 1990 through to 1999.
http://en.wikipedia.org/wiki/European_Union
1993 is certainly understood to be “in the 1990’s”.
How so?
So if you report a crime to the police, and the police finds that no crime was committed, you should have to pay?
[Scrunches aluminium foil into requisite shape and places on head]
This why the EU has to remain. Anyone else see a connection between this and the recent push by the ‘markets’ to test the political will of Brussels by systematically gunning for EU ‘peripheral’ states and their economies?
The US can be as contemptuous as it likes of ‘Old Europe’ but at least there is some sense of moral order here in the political sphere. Weird isn’t it how in the US the opposite is the case; an apparently deeply religious/conservative population ruled over by an amoral political system, while in Europe, that cesspit of secularism, there’s still something of the Holy Roman Empire attached to the concept of high-level politics, a semblance of ethics.
He who has ears to hear, let him hear!
[Reverently takes off headgear and puts it back in the lead vault, ensconced within the orgone pyramid in the attic]
Reading through the article the impression I got was that Google is accused of using its dominance in one market to expand it into new markets by using their advertising and other devisions which have a dominant market position. Google is dominant in searching and advertising, it wishes to expand that dominance into browsing so provides free advertising to the browser division and because of the dominance of that ad it is possible to grow the new division quickly.
The question is how are they going to resolve it – could Google create something like a wall between their search/ advertisement division and the rest of the company. The separation in other words would provide transparency so that all advertisers pay the same amount across the board without deals being done for the different parts of Google.
With that being said it would be interesting to read up on the vested interests behind the scene – given it is the EU I can’t help but remind myself of the following documentary:
People & Power – Europe’s missing billions
http://www.youtube.com/watch?v=b-M2dscDJ0E
I don’t think that Google is going to have any choice but to move its own product advertising which isn’t related to search to a back room. Either that, or it’s going to have to give equal placement to its competitors, like the silly browser ballot.
While I won’t deny that Google owns most of the market for search, you have to keep in mind that their results are opinion. How they rate the sites is the basis of their opinion. They use a formula of some secrecy presently. But they could just as easily use a pig and a Oujia board. In the end, you can’t fault or punish them if their opinion is better than everyone else’s.