Google comes under pressure in Europe

25 February 2010

BRUSSELS: Google's search engine and search advertising operations are both set to be the subject of a preliminary antitrust investigation by the European Commission.

The Commission recently begun discussions with the online pioneer having received three written complaints, although it emphasised its enquiries were highly informal at present.

Google revealed that one of the organisations that had filed an objection was Ciao, a price comparison and review portal that was recently purchased by Microsoft.

The issue raised by Ciao revolved around the bidding system currently in place for purchasing Google search ads, which are typically sold by auction, but are often subject to minimum prices.

Foundem, another UK price comparison service, and Ejustice, a French web property focusing on legal matters, separately stated they had been pushed down the company's organic search listings to what they believed was an unfair extent.

Shivaun Raff, founder of Foundem, said "we want some kind of more transparent mechanism to be put in place so that other companies don't have to go through three years of appeals to Google."

Writing on a company blog, Julia Holtz, Google's senior competition counsel for Europe, the Middle East and Africa, argued "this kind of scrutiny goes with the territory when you are a large company."

"We understand how important rankings can be to websites, especially commercial ones, because a higher ranking typically drives higher volumes of traffic."

"We always try to listen carefully if someone has a real concern and we work hard to put our users' interests first and to compete fair and square in the market ... We're hopeful we can convince them not to pursue this further."

It may be months before the Commission finally decides whether it will officially pursue these matters, and Google has successfully avoided facing such inquiries in the past, despite being the subject of antitrust reviews in the US and Europe.

At present, it is estimated that the Mountain View-based firm holds a 90% share of the European search advertising market, compared with a total pegged at closer to 80% in the US.

Sir Martin Sorrell, the chief executive of WPP Group, who once famously described Google as a "frenemy" to the ad industry, suggested a review may be welcomed in certain quarters.

"Generally when you talk to our clients they would welcome greater transparency in its business practices . . . [and] a regulatory review to make sure there is nothing going amiss," he suggested.

Data sourced from AdAge; additional content by Warc staff