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.

Ahead of the release, the FairSearch Coalition (a group of Google competitors – including chief rival Microsoft – hellbent on seeing Google’s business regulated by governments) issued a statement indicating it would likely have more suggestions for how Google could go beyond its proposals to make things better for its competitors. Now, the group has put out another statement.

Thomas Vinje, counsel and spokesman for FairSearch Europe had this to say:

“FairSearch applauds the Commission for laying out a clear and compelling case that Google is abusing its dominant position by giving its own products preferential treatment in search results. This is an important conclusion that must lead to meaningful remedies. We have always said that the best remedy for consumers and innovation would be to require Google to apply the same policy to search results for its own products as it does to all others.”

“However, Google’s proposed commitments appear to fall short of ending the preferential treatment at the heart of the Commission’s case based on formal complaints from 17 companies. Google’s own screen shots in its proposal (see p. 30) shows it seeks approval to continue preferential treatment for its own products. We will study the proposal in detail and offer an empirical analysis based on actual tests.”

Page 30? Okay, let’s take a look:

Look at that. Google Shopping results right at the top for a search for “dslr camera”. Perhaps they should be doing it the way FairSearch member Microsoft does it:

Oh, wait a minute.

It’s almost as if a search engine offering its own shopping results for product queries is the industry standard:

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.

Do you think Android gives Google an unfair advantage in search? Share your thoughts in the comments.

FairSearch says:

FairSearch.org has filed a complaint with the European Commission laying out Google’s anti-competitive strategy to dominate the mobile marketplace and cement its control over consumer Internet data for online advertising as usage shifts to mobile.

“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. “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.”

The organization continues, “Google achieved its dominance in the smartphone operating system market by giving Android to device-makers for ‘free.’ 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 goes on to call Google’s distribution of Android “predatory”.

The New York Times reports that EU antitrust chief Joaquin Almunia said he’s receiving proposals from Google this week aimed at clearing up concerns about search practices, as he has been leading an investigation into them. The Times says he’s not commenting on the Android complaint from FairSearch, but noted that the EU has been looking into Android separately.

The timing of this complaint from FairSearch is interesting, given that just days ago, Facebook introduced the Android-specific “Facebook Home,” which lets Android users have a Facebook app that dominates the device, and pushes everything else (including Google apps and even search) into the background. Clearly some Google competitors are not only finding ways to compete on Android, but are even making the basis for their new mobile strategies Android-specific.

Even if Facebook Home doesn’t directly compete in search right now, Mark Zuckerberg has indicated that Graph Search will make its way to the product in time. Remember, that hasn’t even rolled out to mobile yet. It’s also worth noting that vertical search services, particularly on mobile, have already shown they can chip away at Google searches. Facebook, for that matter, recently renamed the “Nearby” feature in its mobile app to “Local Search”.

Amazon, which is arguably Google’s biggest competitor outside of Microsoft, also uses Android to its own benefit. It is the basis for the operating system upon which its Kindle Fire devices run. Amazon has taken advantage of Google’s “open” Android platform to even build its own app store, independent of Google Play. It is this “open” nature of Android, which Zuckerberg specifically praised during a press event introducing Facebook Home.

So, one way to look at Android’s effect on competition is that it directly enables competitors to take on Google with their own offerings.

FairSearch consists of 17 companies whose members including Microsoft, Oracle, Expedia, Nokia, and TripAdvisor. Microsoft, by the way, isn’t very happy about Facebook Home either. Considering Bing’s partnership with Facebook, perhaps that will change once Graph Search makes its way to it.

Meanwhile, Microsoft just kicked off a new “Scroogled” campaign against Google. In other iterations, Microsoft has attacked Google Shopping in Gmail. This time it’s none other than Android, but not for the same reasons highlighted in its EU complaint. The Scroogled campaign aims to convince consumers that there are privacy concerns when using Android, and specifically the Google Play store.

“When you buy an Android app from the Google app store, they give the app maker your full name, email address and the neighborhood where you live. This occurs without clear warning every single time you buy an app,” the campaign goes. “If you can’t trust Google’s app store, how can you trust them for anything?”

I wonder if that goes for any of the initiatives that the two companies have partnered on together.

Is Google as evil as Microsoft makes it out to be? Is Android specifically? Let us know what you think.

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.

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.

A report from Bloomberg today says Google may “skirt the most serious antitrust allegations under investigation,” as regulators “waver on whether they can prove consumers are hurt by the way the company ranks its search results”. The report cites three people familiar with the situation, and adds FTC officials are “unsure they have enough evidence to sue Google successfully under antitrust laws for giving its own services top billing and pushing down the offerings of rivals.”

Bloomberg’s Sara Forden and Jeff Bliss write:

Regulators are also looking at whether the ranking system’s benefits to consumers outweigh any harm suffered by rivals including NexTag Inc. and Kayak Software Corp. (KYAK), the people said.

Presumably, they’re also considering the fact that it is extraordinarily easy for anybody with a computer, tablet or smartphone (even with Google’s own Chrome browser or Android operating system) to go to NexTag.com or Kayak.com if they want results from those services. I was able to confirm this is possible by typing these URLs into the Chrome browser. Both sites appeared to have loaded and enabled me to conduct searches.

It’s worth noting that Kayak, a member of FairSearch (an organization comprised of Google competitors) which has been pressuring the FTC to take action against Google, is set to be acquired by Priceline, which is curiously not part of the organization. When asked about what the acquisition would mean for Kayak’s role in FairSearch, the organization would not offer comment.

“Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers,” said Priceline Group President and CEO Jeffery H. Boyd. “Kayak also has world class technology and a tradition of innovation in building great user interfaces across multiple platforms and devices. We believe we can be helpful with Kayak’s plans to build a global online travel brand.”

“Paul English and I started Kayak eight years ago to create the best place to plan and book travel,” said Kayak CEO and co-founder Steve Hafner. “We’re excited to join the world’s premier online travel company. The Priceline Group’s global reach and expertise will accelerate our growth and help us further develop as a company.”

Fairsearch, if you’re unfamiliar with it, was a group of travel sites that banded together when Google revealed that it would acquire ITA Software, a big deal in the travel industry. The group sought (unsuccessfully) to see the deal blocked, but has persisted to lobby against Google ever since, picking up members here and there (Oracle, for example, recently joined), no longer focused on only travel.

Here are the current members of FairSearch:

Greg Sterling at Search Engine Land points out that Kayak is a member and Priceline is not. One has to wonder what kept Priceline out of the coalition to begin with. It will be interesting to see if Kayak remains a part of it.

FairSearch is not offering comment at this point. The acquisition isn’t expected to close until next year, so we’ll wait and see.

New to the group are Oracle, Nokia and Allegro Group. FairSearch today shared a statement from EU Counsel Thomas Vinje, saying:

The FairSearch coalition welcomes the Allegro Group (based in Poland), Nokia (based in Finland), and Oracle (based in California) as new members. Their addition is emblematic of the global scope of Google’s anti-competitive search and business practices, which harm consumers by curbing innovation and choice, not just in Web services, but also in mobile, and any platform where Google abuses its dominant position.

The global footprint of FairSearch’s membership is consistent with investigations by U.S., European Commission, and other authorities of Google’s abuse of its dominant position. Any effective and permanent end to Google’s anti-competitive practices must be applied globally, be legally binding, and come with strong mechanisms for ongoing monitoring and enforcement to prevent the search giant from restoring its abusive practices. As long as competition is threatened anywhere, as in Eastern Europe, where the Allegro Group operates in more than 15 countries, consumers and innovators will continue to lose out everywhere.

Vinje counts all three of these new members as clients.

FairSearch has been getting quite a bit of criticism of its own lately. Search industry vet Danny Sullivan blasted the group last week after some apparently misleading comments made at an event it held.

Omri Shabat at Working Home Guide says, “FairSearch.org is everything but fair about search,” talking about several strategic moves by the group, and concluding, “To summarize, it looks like FairSearch has almost nothing with fairness, reliability or protecting the consumers’ best interests. It also seems that its only objective is to ram Google on every opportunity it has while pretending to be unbiased and only serving the group members’ self-interests.”

It’s worth noting that Expedia, a member of FairSearch has, itself, been accused of violating antitrust laws, and Microsoft, another member, was the subject of one one of the most famous antitrust cases in history.

Oracle, of course, just lost a lengthy legal battle of its own with Google (though the company will appeal).

During the event, there was a panel called “Tech Executives: Exploring Barriers to Innovation in Mobile and Online Services”. Here’s video from the session:

Susan Athey, Microsoft Chief Economist and consultant for the company, said, “Microsoft tried to make deals to become the default search engine on mobile devices. On Android, that was rendered impossible. They were told, Android makers, and carriers, were told, that you cannot use another default besides Google.”

Longtime search industry voice Danny Sullivan has put together quite a rant, titled “Google Doesn’t Require Google Search On Android, Despite What FairSearch & Microsoft Want You To Believe,” debunking such claims that Android device must use Google as the default search engine.

“That’s not true. Not only is it not true, it’s impossible. It’s impossible because Android code is released to anyone to do anything that they want with. But if just being impossible isn’t enough proof, how about proof of Android devices that have dropped Google as the default search engine?”

He then goes on to name specific Android devices that have used other search engines, including Yahoo, and Microsoft’s own Bing as the default search engine (Motorola Backflip and Samsung Galaxy S with Verizon respectively).

“There was the Samsung Galaxy S with Verizon, also known as the Galaxy Fascinate,” writes Sullivan. “That phone, which I personally tested for several weeks in 2011, used Bing as the default search. You know, Microsoft’s Bing search engine, the one Microsoft supposedly couldn’t cut deals with device makers or carriers to be the default on Android devices.”

Last week, it was revealed that Amazon’s new Kindle Fire devices (which utilize Android and Amazon’s own app store, rather than Google Play), are using Bing as the default search engine, as Sullivan also notes.

Google D.C. guy Adam Kovacevich was in attendance at the event, and said, “I just want to clarify something that you said, that we require Android manufacturers to install Google as the default search. That is just not true.”

He tweeted a similar response to the rest of the world:

Follow @adamkovac

Adam Kovacevich
@adamkovac

Susan Athey’s claim that Android manufacturers have to use Google as search default is not true. http://t.co/eqQUA3Hg

 Reply  ·  Retweet  ·  Favorite
23 hours ago via TweetDeck · powered by @socialditto

He later retweeted Sullivan’s article.

It probably goes without saying, but he also tells us there was a lot of stuff said at FairSearch’s event that Google would disagree with.

Sullivan continues, pointing out a variety of ways Microsoft and FairSearch appear to have manipulated the storyline in their own favor, including omitting elements of the discussion from FairSearch’s own coverage.