The investigation, by the antitrust watchdog in Brussels, is in a “preliminary” stage, and is looking into allegations from companies including Microsoft and Nokia that it has supported Android “by means of cut-price licensing and exclusivity deals,” the report says. Daniel Thomas and Alex Barker write:

These allegations include the licensing of Android software “below cost”, according to the documents, and “potential requests by Google to cancel and/or delay the launch of smartphone devices” based on competing operating systems or shipped with rival mobile services.

The commission will also consider whether Google imposed exclusivity agreements with mobile device makers regarding the pre-installation and placement of Google’s various mobile services that are typically supplied with Android devices, such as YouTube.

The commission is reportedly sending around an 82-question, 23-page questionnaire to device makers and mobile operators to help it along with its investigation.

Back in April, FairSearch.org, the organization made up of Google competitors mostly in (but not limited to) the the travel industry, filed a complaint with the EU in relation to Google’s Android business practices. They deemed these “a deceptive way to build advantages for key Google apps in 70 percent of the smartphones shipped today”.

“Google is using its Android mobile operating system as a ‘Trojan Horse’ to deceive partners, monopolize the mobile marketplace, and control consumer data,” said Thomas Vinje, Brussels-based counsel to the FairSearch coalition, at the time. “We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google’s Android operating system.”

“Google achieved its dominance in the smartphone operating system market by giving Android to device-makers for ‘free,’” the organization said. “But in reality, Android phone makers who want to include must-have Google apps such as Maps, YouTube or Play are required to pre-load an entire suite of Google mobile services and to give them prominent default placement on the phone, the complaint says. This disadvantages other providers, and puts Google’s Android in control of consumer data on a majority of smartphones shipped today.”

FairSearch went on to call Google’s distribution of Android “predatory”.

In May, EU antitrust chief Joaquin Almunia said Google’s recent proposals to ease concerns regarding its search business did not go far enough, and that the commission would seek further concessions.

In the U.S. the Federal Trade Commission, which recently settled a similar probe with the company, is said to be looking into Google’s display advertising business.

Here is the list of Google’s proposals, as shared in the EU’s announcement:

Google offers for a period of 5 years to:

(iv) no longer impose obligations that would prevent advertisers from managing search advertising campaigns across competing advertising platforms.

A third party would be required to monitor Google’s implementation of its commitments.

It was clear from the beginning that competitors did not think these went far enough, though they did go further than Google’s actions settling a similar investigation in the U.S.

Reuters now reports that EU Competition Commissioner Joaquin Almunia said the commission will press Google for further concessions, though the report does not get into specifics. It does say that Almunia said “Google would almost certainly be asked to improve its proposals.” Foo Yun Chee writes:

The EU competition authority initially gave complainants until May 26 to comment, but later extended the deadline to June 27 following pressure from the companies.

“After, we will analyse the responses we have received… almost 100 percent we will ask Google: you should improve your proposals,” Almunia told lawmakers during a Tuesday hearing at the European Parliament.

Meanwhile, reports have recently emerged that the U.S. Federal Trade Commission has been mulling opening up a new probe, this time into Google’s display advertising business.

Bloomberg cites sources who wished not to be named, as saying the FTC is in the “preliminary stages” of a probe into whether the company “is using its leadership in the online display-advertising market to illegally curb competition,” but that it “may not expand into a larger probe.” Bloomberg’s Brian Womack and Sara Forden report:

FTC investigators are examining whether Google is using its position in U.S. display ads — a $17.7 billion industry that includes the sale of banner ads on websites — to push companies to use more of its other services, a practice that can be illegal under antitrust laws, the people said.

A similar report has come out from Reuters, who says its source said, “it was unlikely that the Federal Trade Commission had sent out civil investigative demands in relation to the probe, which would be the sign of a formal and more serious investigation.” Reuters reports:

The new line of inquiry focuses on tools acquired when Google bought display ad company DoubleClick in 2007; other firms which specialize in helping Web publishers sell ads to put on their websites are complaining to the FTC, the source said.

The firms have accused Google of leveraging some of its most popular DoubleClick products, such as the ad managing system which has an estimated 80 percent of the market, to push websites to use other products, including Ad Exchange where websites swap ads, the source said.

Google, which is not commenting on the prospect of a new investigation has apparently not been contacted about one.

Google continues to face various antitrust probes around the world, including in Europe, Canada, Argentina and South Korea.

Should Google be required to change its search results? Let us know what you think in the comments.

The Commission is seeking feedback on the commitments Google has offered to address concerns.

On why it feels the need to intervene, the Commission says, “In high-tech markets in particular, network effects may lead to entrenched market positions. Google has had a strong position in web search in most European countries for a number of years now. It does not seem likely that another web search service will replace it as European users’ web search service of choice.”

“In this context, it is important for the Commission to intervene in order to ensure that Google’s prominent market position in web search does not affect the possibility for other competitors to innovate in neighbouring markets, including in the long-term,” it adds.

The Commission views Google as dominant in search and search advertising, and says it is abusing its dominant position in four areas: specialized search, content usage, exclusivity agreements with publishers for the provision of online search advertising on their sites, and contractual restrictions on the portability and management of online search advertising campaigns across AdWords and competing platforms.

Google has, of course, settled similar concerns here in the U.S. with the Federal Trade Commission, where it agreed to let sites remove content from specialized search results pages while allowing them to keep results in regular Google results (they recently released a tool for this), and to enable advertisers to “mix and copy ad campaign data” within third-party services that use the AdWords API.

Some competitors felt that the settlement did not go far enough. The proposal in Europe goes further. Here is the list of Google’s proposals verbatim (per the EU’s announcement):

Google offers for a period of 5 years to:

(iv) no longer impose obligations that would prevent advertisers from managing search advertising campaigns across competing advertising platforms.

A third party would be required to monitor Google’s implementation of its commitments.

Already, despite the increased responsibilities on Google’s part, competitors don’t think the proposals go far enough this time either.

Interestingly, FairSearch, the group of Google competitors, which has been most vocal about its opposition to Google’s practices since its incarnation when Google announced its intent to acquire ITA software three years ago, issued a statement on the market test before the EU’s document came out.

“The most important remedy to Google’s abuse of dominance is to require the search monopoly, which controls 94 percent of the market in Europe, to subject its own products and services to the same policy it uses to rank and display all other Websites,” the group said. “Since it has taken a year to extract a final proposal from Google, FairSearch believes the ‘market test’ should last three months to ensure that interested parties have enough time to carefully provide the European Commission with their expertise on the effectiveness of Google’s proposal. As we have said, we will comment on Google’s proposed remedies after the Commission shares them.”

FairSearch intends to study the “effects” of Google’s proposal, and has implied that it will have more suggestions for how to make things better.

Separately, FairSearch recently filed a complaint with the EU saying that Google is using its Android operating system to give it an additional unfair advantage in search. This is not addressed in Google’s current proposals, but the EU isn’t ignoring it. Here’s what the commission had to say about “other Google-related allegations”:

This process covers the four competition concerns that have been investigated as a matter of priority. The Commission is, however, thoroughly examining all other allegations brought to its attention by different market players with a view to deciding whether or not a further investigation of those issues is warranted. Google’s Android related business practices are part of those issues.

To be continued…

All those concerned with Google’s current proposals have a month to submit their feedback to the EU.

Do Google’s proposals go far enough? Should Google even be required to do all of what it has proposed? Will this help competitors significantly? Will it hurt Google significantly? We want to hear your thoughts in the comments.

The proposal, however, was said to be subject to a market test, so those complaining about Google (mainly its competitors) can provide feedback.

FairSearch, the group of Google competitors that regularly lobbies against Google’s practices, has issued a statement about this so-called “market test”.

“The most important remedy to Google’s abuse of dominance is to require the search monopoly, which controls 94 percent of the market in Europe, to subject its own products and services to the same policy it uses to rank and display all other Websites,” says FairSearch. “Since it has taken a year to extract a final proposal from Google, FairSearch believes the ‘market test’ should last three months to ensure that interested parties have enough time to carefully provide the European Commission with their expertise on the effectiveness of Google’s proposal. As we have said, we will comment on Google’s proposed remedies after the Commission shares them.”

The organization goes on to say:

European Commission Vice President Joaquin Almunia has set a high bar that any proposal from Google must meet to pre-empt formal proceedings against the company, including:

1) Will it end Google’s diversion of traffic away from other sites through preferential treatment for Google’s own properties?

2) Will it swiftly restore consumers’ access to a truly competitive marketplace for search and related online services?

3) Will an independent third party be able to verify that Google is not circumventing its own proposed commitments?

The coalition says its member intend to study the “effects” of Google’s proposal, and imply they”ll have more suggestions for the search giant. It will be interesting to see how long this drags on.

Under the proposal, as it’s being reported, Google will label its own results, and it will show competitors’ links in cases where it shows its on results. The New York Times reports:

Google will not have to change the algorithm that produces its search results, the people said. Under the proposal, Google agrees to clearly label search results from its own properties, like Google Plus Local or Google News, and in some cases to show links from rival search engines.

…

In areas where Google does not make money from search results, like weather or news, the company will label the results as Google-owned properties. In areas where Google sells ads, like local business reviews, it will show links to at least three competitors. In areas in which all search results are paid ads, like shopping, Google will auction links to rivals.

Like in the U.S., Google will also have to give sites a way to keep their content from being included in vertical search results while letting them stay in regular search results. According to the Times, sites will be able to keep portions (as much as 10%) of their content out of Google so users are compelled to visit the site. It gives the example of Yelp keeping out business hours.

Additionally, Google is reportedly agreeing to be policed by an unknown third party, and will face fines if it doesn’t comply with the terms. This will go on for five years.

With the proposal, Google will avoid a lengthy and costly legal battle in Europe.

According to Bloomberg, Google competitors aren’t happy with the details of Google’s proposal that have surfaced, despite going significantly further than the concessions made in the U.S.

Last week, FairSearch announced a complaint with the EU claiming that Android gives Google an unfair advantage in search. More on that here.

Last month, Google released an opt-out tool for sites to keep content out of its vertical search engines.

Google is actually currently facing a lawsuit in the UK alleging that it buries competitors’ results. A new report from Bloomberg says maps provider Streetmap filed a suit against the search giant last month:

Streetmap said its complaint mirrors an antitrust probe by the European Union into whether Google favors its own services over competitors in search results.

“We have had to take this action in an effort to protect our business and attract attention to those that, like us, have started their own technology businesses, only to find them damaged by Google’s cynical manipulation of search results,” Kate Sutton, commercial director of Streetmap, said in the statement.

Other Google competitors (in the form of the Fairsearch Coalition) recently filed a complaint with the EU against Google, claiming that it is using its Android operating system to create an unfair advantage for its search business, despite the fact that competitors like Facebook and Amazon directly use Android in their own offerings.

The Financial Times is now reporting (via TechCrunch) that Google will likely bow to regulatory pressure by taking measures to more prominently show results from competing vertical search engines.

The publication reports:

One of the European Commission’s primary concerns, according to officials involved, is the visibility in search results of rival so-called “vertical search” services – in areas such as maps, finance or weather – that may provide more relevant results to a query.

This specific finding indicates that alongside widely expected concessions to more clearly label Google’s own services, the US group will also need to offer solutions that give more prominence to rival specialist search services and consumers clearer alternatives.

While it remains to be seen if this will actually happen, this would go significantly further than Google’s concessions in the U.S. Federal Trade Commission investigation.

Should Google be required to give competing services more visibility in its own search results, even if it hurts the user experience?

The New York Times reported this week that EU antitrust chief Joaquin Almunia said he’s receiving proposals from Google this week. While Almunia has not commented on the angle, a new complaint was filed by Google competitors claiming that the company unfairly uses Android to help its search business.

Can Google keep its edge in search for the long term? Let us know what you think.

Forbes, for example, has a piece out today called “Four Reasons Google’s Stock Is Slowing Down“. The first two reasons listed in this article are directly related to this issue: 1. Losing search market share and 2. Shift to mobile search.”

The author references a New York Times article making the rounds today, in which the case is made that people, particularly on mobile, are choosing other services first, based on the type of information they’re looking for.

“Say you need a latté. You might pull out your phone, open the Yelp app and search for a nearby cafe. If instead you want to buy an espresso machine, you will most likely tap Amazon.com,” writes the Times’ Claire Cain Miller. “Either way, Google lost a customer.”

This is a legitimate concern for Google. It’s been apparent, for years now, that any eventual decline in market share for Google would likely come at the hands of a combination of services chipping away at the need for consumers to rely upon one search engine for finding things. That is opposed to just switching search engines and using something like Bing, Yahoo, DuckDuckGo, etc.

Google itself has acknowledged this in the past, and even today, Google’s Adam Kovacevich shared the NYT article.

Of course it helps Google’s case against antitrust complaints when reports come out that suggest there is legitimate competition. The Times reported back in September that 1/3 of shopping searches start on Amazon vs. only 13% on general search engines. Kovacevich shared that too.

Interestingly, when Google’s stock hit an all-time high earlier this year, analysts chalked it up to optimism for Google’s core business and mobile apps. Yahoo Finance said the market is convinced that these have “many good years ahead of them.”

Still, the search landscape just isn’t what it used to be.

As Miller writes, “No longer do consumers want to search the Web like the index of a book — finding links at which a particular keyword appears. They expect new kinds of customized search, like that on topical sites such as Yelp, TripAdvisor or Amazon, which are chipping away at Google’s hold. Google and its competitors are trying to develop the knowledge and comprehension to answer specific queries, not just point users in the right direction.”

That’s just a handful of the various services that are already replacing Google for certain types of searches for many consumers. There’s one app that just about everybody has on their smartphone, and it could potentially take an even bigger chunk out of Google’s mobile search share in time than some of these others.

Facebook Graph Search’s impact on consumer behavior has been underwhelming so far, but Facebook is pretty much keeping it that way so far. While the number has probably increased some by now, at last count, only about 0.09% of Facebook users even had Graph Search yet. Facebook was clear from the beginning that the roll out would be slow, and that many more features and capabilities would be added in the future. In short, Graph Search has nowhere to go but up. It will only get better and return results for more types of information.

As we’ve noted in the past, local search is one areas where Graph Search could make an immediate impact in the market. Interestingly, Facebook just renamed its “Nearby” feature on iOS to “Local Search”.

Not only has Graph Search not rolled out to the majority of Facebook users yet, but it has also not rolled out to mobile. Local search is all the more relevant when used from a mobile device, and that will be key for Facebook’s search offering once it finally does hit its mobile apps.

But its potential impact won’t be limited to local search. If Yelp can make a dent in Google’s market share from mobile for certain types of local searches, Facebook can surely make a dent across a broader spectrum of verticals (from both mobile and desktop). Graph Search recently has already started letting you search for things like movies “watched” by friends (or others), books “read” by friends or others, and TV shows “watched” by friends or others. That’s not just stuff people have “liked,” but stuff people have read and/or watched, regardless of whether or not they like them. Wondering whether or not you should watch “The Hobbit”? Search “my friends who have watched the hobbit” and ask them their opinions. You get the idea.

This is only going to expand to encompass more types of searches, and the more types of searches it works for, the more searches it can take away from Google. Is it going to replace Google in general? I’d say almost certainly not, but as a multitude of services chip away at Google’s searches, Facebook in particular is one of the few that has the potential to chip away at a bigger piece of the pie. Combined with the Amazon shopping searches alone, Google’s pie share could start looking a lot different.

The Times piece cites comScore data, saying that searches on traditional services (dominated by Google) declined 3% in the second half of last year after rising for years, while the number of searches per searcher declined 7%. Meanwhile, searches on vertical search engines increased 8%. Do you think this pattern is going to reverse anytime soon?

Will there come a time when the majority of searches aren’t performed using Google? Let us know what you think in the comments.

As you may know, Google has already settled its antitrust issues in the U.S., at least for the time being. The FTC ended its probe last month.

Bloomberg reports:

Google sent a “detailed proposal,” said Antoine Colombani, a spokesman for Almunia. He said he couldn’t anticipate if the offer was sufficient to allay antitrust concerns or whether it would be sent to rivals and customers for comments. If this market test is successful, the EU can make the commitments legally binding. Such a settlement would avoid possible fines against the Mountain View, California-based company.

It will be interesting to see what the rivals make of it. These rivals were not all that pleased with the FTC settlement, saying that it did not go far enough. FairSearch, whose 17 members in the U.S., Europe and South America include Expedia, KAYAK, Microsoft, Nokia, Oracle, and represent the largest group of formal complainants to the EC, has already released a statement ahead of its analysis. You can read the whole thing at the end of this article.

Meanwhile, Jon Leibowitz, the FTC Chairman who led the Google probe back in the U.S. has announced his resignation after four years in the role. He will step down on February 15. He’s been a commissioner since 2004.

“I have been honored to head this extraordinary, bipartisan Commission and to work alongside the best staff in federal government,” he said. “Our small but mighty agency has safeguarded the privacy of Americans and stopped predatory financial practices by companies taking advantage of cash-strapped consumers. Our antitrust enforcement has helped contain health care and drug costs, and helped reduce prices and increase innovation for smartphones, computer chips and other high-tech products.”

Google is mentioned several times throughout his lengthy resignation announcement:

Most recently, the Commission announced a landmark agreement with Google to ensure consumers would continue to be able to buy a variety of high-tech devices from smartphones to games to tablets. The settlement gives competitors access to standard-essential patents, and ensures that companies that advertise on Google’s website will have more flexibility to use rival search engines.

…

During the last few years, Leibowitz has worked to raise the profile of privacy practices through law enforcement, consumer education and policy initiatives. FTC settlement orders against Google and Facebook let the companies move on and innovate for consumers while requiring comprehensive privacy programs and affirmative choice for material privacy changes, and prohibiting privacy misrepresentations.

…

The FTC also took steps to rein in the alleged misuse of standard-essential patents, which can lead to patent hold-up and ultimately higher prices for popular devices such as smart phones, laptop and tablet computers, and gaming consoles. The Commission made the case publicly – and through law enforcement actions such as the Google consent decree – that companies should be restricted from seeking injunctions on standard-essential patents if they are bound by prior commitments to license their standard-essential patents on fair, reasonable, and non-discriminatory terms.

Some critics of the FTC/Google settlement indicated that they felt Leibowitz had rushed through the Google Probe and the decision, as to get it done before Leibowitz’s imminent resignation.

Here’s the statement FairSearch emailed us about Google’s settlement proposal in Europe:

What to look for in Google’s offer to the European Commission

The deal should also include a fast-track dispute resolution mechanism administered by a third-party monitor, to ensure that the settlement ends Google’s search bias and other practices identified by Commissioner Almunia as potential abuses of dominance.