Joaquin Almunia, the European Commission’s head of competition, has expressed concerns about Google, but that doesn’t mean it’s going to result in a long, drawn-out legal process for the company. Almunia and Google seem to be in the process of talking things out, and that may or may not lead to Google making some changes, at least in Europe.
A Google spokesperson tells WebProNews, “We continue to work cooperatively with the European Commission.”
The Guardian’s Charles Arthur reports that Almunia has given Google until July 2 to come up with suitable changes to its search results “or face the threat of being taken to court and potentially huge fines.”
Almunia seems to want to get things resolved quickly one way or another. He recently released a lengthy statement, saying, “I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement.”
In the statement, he then went on to outline the four specific concerns the Commission has with Google’s business practices.
First, in its general search results on the web, Google displays links to its own vertical search services. Vertical search services are specialised search engines which focus on specific topics, such as for example restaurants, news or products. Alongside its general search service, Google also operates several vertical search services of this kind in competition with other players.
In its general search results, Google displays links to its own vertical search services differently than it does for links to competitors. We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.
Interestingly, Google just revealed this week that it is transitioning its free Google Product Search to a sponsored/paid inclusion model in Google Shopping. Google says this transition will be complete in the fall, in the U.S. It will be interesting to see if this expands throughout Google’s international properties, particularly in Europe.
Some are suggesting that this represents Google’s shift away to the “do no evil” policy. Owen Thomas at Business Insider, for example, writes, “Let’s just admit that Google is evil now, okay?”
A WebProNews reader commented, “Many small companies have used Google ( Froogle, Base, Shopping ) as their resource for free advertising of their products. This is just an attack on those small companies and only allow companies who can afford to pay to do so.”
Comments such as these aren’t likely to help Google’s antitrust cases, and let’s not forget that the FTC is looking at Google in the U.S. too.
Long time search analyst Danny Sullivan says, “Paid relationships can be good,” and “The fact Google considered paid inclusion evil in the past is an embarrassment that some will have a good chuckle about. But companies do change stances. The bigger issue in all this is whether the shift is good for searchers and publishers.”
Almunia’s second concern:
Our second concern relates to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors. We are worried that this could reduce competitors’ incentives to invest in the creation of original content for the benefit of internet users. This practice may impact for instance travel sites or sites providing restaurant guides.
To this point, we’ve seen competitors like Yelp complain about Google using their reviews in Google Places in the past. It just so happens that Google made another major announcement this week regarding local search, in that it is shifting to Google+ Page-based local results, which will provide reviews from its own Zagat (acquired last year), and from Google+-based friends.
This may give Google less of reason to aggregate outside reviews, but at the same time, it places increased focus on Google properties. It will be interesting to see how regulators view this move.
It’s worth noting that with this movie, Google is giving small businesses more tools to reach their customers on a social level (with Google+ features, such as Hangouts).
Almunia’s third and fourth concerns:
Almunia’s other concerns are related to Google AdWords and competition.
Our third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements. Search advertisements are advertisements that are displayed alongside search results when a user types a query in a website’s search box. The agreements result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services. This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters.
Our fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google’s auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google. We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.
Another of Google’s recent major announcements – the Knowledge Graph – is reportedly increasing the number of searches on Google, and it just so happens that this gives Google more opportunities to display AdWords ads.