Google Is Accused by EU for Abusing Dominance in Internet Search


Google Inc is being accused by the European Union or EU on Wednesday for allegedly abusing its dominance in Internet search by cheating rivals and consumers. The accusation states that the search titan distorts search results to favor its own shopping service.

Margrethe Vestager, the EU Competition Commissioner said a charge sheet has been sent to the Mountainview, California-based company and they have 10 weeks to respond. Vestager took over the case in November and announced her findings after almost five investigation years.

Antitrust investigations into business practices of Google would continue. It also started another into Google’s Android mobile OS, the search firm’s key element in its strategy to keep online ad revenue as people switch into smartphone apps to search the Web.

EU’s most complaints are the shopping case, which started back the longest time. This can change search rules for services like flights, hotels and others. Vestager said she is concerned that the Internet giant gives an unfair advantage to its own comparison shopping service, breaching EU antitrust laws. If the Commission proves Google practiced “near monopoly” to push itself ahead competitors for the past seven years, the latter could be fined.

Google is now accused by EU for abusing dominance in Internet search, but its antitrust misery in Europe had been instigated by an unlikely source – husband and wife Shivaun and Adam Raff of Foundem, a comparison-shopping website. Foundem was founded by the couple in 2005 in Berkshire, England. It became the first firm to file an antitrust case against the U.S. based search company in 2009, after a fight over lifting penalties that excluded their site from search results.

Foundem competes with the U.S.  firm’s shopping and vertical search services. The Raffs wrote that Google penalties, which are supposed to be for spams or cheating sites are now targeted to legitimate directory services and vertical search.

The search firm said it penalized Foundem with “de-indexing” since it has contents of other pages, which can automatically downgrade search results. The Raffs argued that it is not a legitimate criticism for a vertical search site. According to the couple, the time Google excluded their site, it continued to rank normally on Bing and Yahoo. Their website was singled out by a British TV program as U.K.’s best in price comparison on December 2008.

Regulators in Brussels saw Foundem as a European innovative company whose growth was stifled by the titan company’s unfair practices. Foundem has been a “zombie site” for several years and there is no doubt it faced financial pressure. Google has denied breaking antitrust regulations and argues that providing more direct answers to online queries is good for customers.

Foundem’s complaint against Google has been pivotal, as it was the first to bring the search titan’s practice to the attention of antitrust regulators in the U.S. Later, streams of complainants against Google followed, including big names like Trip Advisor and Expedia. Lately, The Wall Street Journal publisher joined the complainants.

As Google is now being accused by EU for abusing dominance in Internet search, it faces the possibility of being constrained in a way that will make its services less useful for consumers. That is, if the regulators will win over the search company in this case.

By Judith Aparri


The New York Times

Photo courtesy of Yang and Yun’s Album – Flickr License

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