Google's Anti-Trust Problem

The EU launches an investigation. Should the search giant be worried?

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On Tuesday the European Union announced it's launching an anti-trust investigation into Google. Prompted by complaints from rival search engines, the EU will be probing whether Google has used its dominant market position to unfairly hinder the competition. Allegations include: giving preferential treatment to Google services in search results, and burying competing search sites to strengthen its relative monopoly in online advertising. Here's what tech writers are saying about the suit:

  • Google Shouldn't Be Too Worried, writes Mike Butcher at TechCrunch:
Although the EU can impose a fine of up to 10 percent of revenue for monopoly abuses (the EU’s took $1.38 billion from Intel Corp. last year) the likelihood of this investigation a) coming down hard on Google or b) levying a fine is pretty unlikely and even if this happened, the fine would probably be restricted to its European markets. For instance, in September the Commission closed an investigation into Apple after it introduced cross-border iPhone warranty repair services within the EU. It shows that the Commission is, in practice, often prepared to play ball and horse trade.

But the fact its launched this investigation does flag that Google will have to step up to the plate and answer the charges in a formal and legal manner.

The EC has legal authority to impose fines and demand other remedies if it finds a violation of anti-trust or unfair competition regulations. Google must take the investigation very seriously. The EC was much tougher on Microsoft, in terms of fines and remedies, than the US was after similar findings of anti-trust violations in both jurisdictions...

The EC probably wouldn’t have taken the investigation to this level and made such a public announcement if it weren’t intending to do something. What that is precisely remains to be seen pending the outcome of the investigation.

  • The EC Takes This Stuff Seriously, writes JP Manninen at VentureBeat:
The EU has a history of taking on giant companies before, hitting Microsoft with a fine of 497 million euros, or $794 million, in March 2004 over antitrust issues, and, more recently, the regulator fined Intel 1.08 billion euros, or $1.38 billion. It is apparent that the EU is not a pushover when dealing with multinational companies and therefore this could mean trouble for Google.
  • Competitor Sites Want Transparency, writes Matt Warman at The Telegraph:

Google is accused by a small number of search sites of unfairly lowering their rankings. Although none of them want to make Google’s secret methods completely public, they’re demanding greater transparency in how Google ranks the “Quality” of sites.

Given their large war chest, Google would probably rather pay a few billion in fines than reveal its ranking algorithms, but it’s not likely that they’ll be given a choice in the matter

  • This Investigation Is Nuts, writes Danny Sullivan at Search Engine Land:

Google is a search engine. A search engine’s job is to point you to destination sites that have the information you are seeking, not to send you to other search engines. Getting upset that Google doesn’t point to other search engines is like getting upset that the New York Times doesn’t simply have headlines followed by a single paragraph of text that says “read about this story in the Wall Street Journal.” It’s insane. It really is. A person comes to Google for answers.

  • It's Pointless to Go After Google Right Now, writes Jeff Jarvis at Buzz Machine:
Google is being challenged now by other means of discovery: namely us sharing links through social means. Google is no longer the all-powerful Oz of the internet. The EU’s timing is impecable.
This article is from the archive of our partner The Wire.