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.

As you may know, the U.S. Federal Trade Commission announced last week that it did not find Google’s search business to be in violation of U.S. antitrust laws, but that the company was making a couple of voluntary changes. More on all of that here.

The European Commission, however, believes Google is “diverting traffic” to its own services, and that it will be forced to change the way it presents search results in Europe or face charges. EU competition chief Joaquin Almunia said as much in an interview with the Financial Times (registration required).The publication quotes him as saying:

“They are monetising this kind of business, the strong position they have in the general search market and this is not only a dominant position, I think – I fear – there is an abuse of this dominant position.”

Bloomberg, meanwhile, reports that Foundem, which has been complaining about Google’s practices for years, and in fact filed a complaint with the EU, which led to the investigation, filed a suit against the company in October, with court documents being released this week.

Hat tip to Danny Sullivan.

Consumer Watchdog, the consumer rights group, which also challenged Google’s FTC settlement over “Safari-gate,” has now spoken out against today’s announcement.

Consumer Watchdog says the settlement fails to end Google’s “most anticompetitive practice,” and has called upon the Department of Justice and state attorneys general to “press forward to end the Internet giant’s monopolistic behavior in search results,” something the FTC found to not be violating U.S. antitrust laws.

“Google clearly skews search results to favor its own products and services while portraying the results as unbiased. That undermines competition and hurts consumers,” said John M. Simpson , director of the group’s Privacy Project. “The FTC rolled over for Google. They’ve accepted Google executives’ promises that they will change two practices without even requiring a consent agreement, but Google has a track record of broken promises. Don’t forget, this fall the FTC fined Google $22.5 million for violating its most recent consent agreement. Why would the FTC take Google at its word?”

According to FTC Chairman Jon Leibowitz speaking at press conference this afternoon, because Google wouldn’t want to go through this again.

Consumer Watchdog says new Assistant Attorney General for the Department of Justice Antitrust Division, William J. Baer, whom Leibowitz praised during the press conference, should “make Google’s abuse of search a top priority”.

More from Consumer Watchdog’s statement:

The FTC’s settlement does require a consent agreement regarding so-called Standards Essential Patents held by Google’s Motorola subsidiary. Google is now required to license these patents to any company on “fair, reasonable and non-discriminatory” terms – known as FRAND terms.

“This will help ensure competition in the manufacture of smartphones and tablets,” said Simpson, “but that was never the heart of the issue. Biased search and Google’s favoring its own properties do real consumer harm. Google is the gateway to the Internet for most people. When Google rigs the game, we all suffer. They need to be stopped.”

Consumer Watchdog has “expressed concern” that Leibowitz “may have rushed to finish the investigation so it could be concluded under his chairmanship,” as he is expected to step down soon.

The Commission vote to close the investigation related to Google’s search-related practices was a unanimous 5-0.

We knew we’d be hearing from one group in particular. The FairSearch Coalition has released its statement regarding today’s news, to inform the world that it is disappointed with the FTC’s decision to close its investigation, a decision the group calls “premature”.

“The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results,” says the group made up of Google competitors (which includes a number of travel sites, as well as Microsoft and Oracle).

“The FTC’s settlement is by no means the last word in this case, leaving the FTC without a major role in the final resolution to the investigations of Google’s anti-competitive practices by state attorneys general and the European Commission,” FairSearch says. “The FTC’s inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators.”

“State attorneys general who reportedly disagreed with today’s announcement by the FTC have an important role to play in ensuring both that Google is not allowed to continue practices that hurt every American business through artificially high advertising costs, and to demand that whatever changes Google is forced to make in Europe also apply for U.S. consumers who risk losing innovation because of Google’s aggressive abuse of its dominance,” the group continues.

“FairSearch and its members will continue work with authorities in the U.S., Europe and elsewhere who are investigating Google,” FairSearch concludes. “Our members also plan to participate in the European Commission’s market testing of any proposed binding remedies to Google’s harms. FairSearch will continue to fight to restore truly competitive conditions to the market for search and related online services. No less than the future of innovation and small business on the Internet is at stake.”

Google agreed to make changes to its practices, including allowing sites to opt out of inclusion in its vertical search services without penalty in organic search results, and allowing advertisers to mix and copy campaign data within third-party services that use the AdWords API.

The FTC has determined that Google has not violated American antitrust law.