Joaquin Almunia, the European commission's head of competition, is concerned that Google's dominance could harm competition. Europe's antitrust chief has given Google until 2 July to offer changes in its search results and advertising rules or face litigationt and "potentially huge fines," which can amount to up to 10 percent of a company's annual global revenue.
In this case that could be nearly $4 billion. The article also catalogs all the other investigations and legal issues surrounding Google in the US and Europe.
Joaquin Almunia, the head of competition policy, has set out in a private letter the European commission's concerns on how Google's dominance - where in Europe it has about 90% of searches - could be harming competition.
Almunia's letter is only one of many battles the US company is fighting against the threat of government regulation. The US and South Korea are also investigating whether it is abusing its near-monopoly in search, while in Europe, accusations that it is invading people's privacy and even snooping on online conversations are coming under scrutiny from French and German regulators. The four concerns include:
- The lack of easy portability of search campaigns to Google competitors (i.e., Microsoft)
- Exclusivity of Google-publisher advertising relationships surrounding AdSense
- Use of third party content (i.e., reviews) on Google's "own" sites (e.g., Places or Hotel Finder)
- Concern over presentation of Google's vertical content on the SERP (aka "search neutrality")
In a statement, Google told the Guardian: "We operate in over 100 countries around the world, and the internet is disruptive by its nature. It's understandable that our business should attract scrutiny and sometimes complaints in a few of those countries. We're always happy to answer questions authorities may have about our business."
Unusually, Almunia has indicated that he is ready to deal with Google, rather than taking it to court - evidence, a Google spokesman suggested, that "we've have been co-operating with their investigation and that issues can be solved through conversation".
Schmidt last week said he had not seen the specifics of Almunia's complaint, but was happy to talk to him. "He's encouraging us to have a conversation, and we completely agree. We disagree that we are in violation in general," he said in London.
If Almunia prevails - as he is expected to, one way or another - then Google will have to change its search results, and perhaps even give rivals in some fields star billing. That will be galling for the company as it tries to extend its hegemony across shopping, travel, and news. Yet it may be the only practical way out.
Yet the investigations are mounting up so rapidly that many doubt Google can escape some strictures. For the company which in 2001 adopted the motto "don't be evil" as a counterpoint to Microsoft, which was then being sued for monopolistic practices in the US and Europe, it is a strange reverse.
In other Google news,
Google's senior VP of advertising Susan Wojcicki was joined by FTC Chairman Jon Leibowitz for lunch on May 31, 2012 in Southern California. The two met up at a restaurant at Terranea Resort in Rancho Palos Verdes, at the duo were attending the D10 conference, put on by technology blog AllThingsD - even as antitrust investigators prepare to question Google chairman Eric Schmidt.
The FTC brought in a heavy-hitting litigator from Washington, Beth Wilkinson, to run the antitrust investigation.
Wojcicki spearheaded Google's $3.1 billion acquisition of DoubleClick, and was involved in Google's purchase of AdMob.
Google's advertising practices are part of the FTC's antitrust investigation. The agency is examining whether the company unfairly increases ad rates for competitors, people familiar with the matter have said. FTC officials have also asked rival shopping and review websites whether Google sells them prime advertising space on search results pages, people with knowledge of the matter said earlier this month.
The FTC is seeking to determine whether Google is using its dominance to thwart competition among Internet companies. Google was used in 67 percent of U.S. searches in April, according to ComScore Inc., a Reston, Virginia-based market researcher.
"There are certainly allegations that the search results have changed or evolved over the years," Leibowitz said on stage yesterday at the conference. "We're trying to figure out if the evidence is there and what the theories are."
Leibowitz told Bloomberg referring to Google:
"It's valuable to keep lines of communication open" with leaders in the technology industry, Leibowitz said.
"When you have an opportunity to get someone of Beth's stature and abilities, you would always want to take her up on it," Leibowitz said.
"It doesn't mean that we've decided to bring a case at all, it just means that we have very competent counsel who can go toe-to-toe with their very competent counsel," he said.