Google faces European co mpetition inquiry

| Friday February 26, 2010 00:00

Google's senior competition lawyer Julia Holtz said the internet giant was 'confident' it operated within European competition law. Foundem claims that its site is demoted in Google's search results.

'Foundem... argues that our algorithms demote their site in our results because they are a vertical search engine and so a direct competitor to Google,' Google said.

'Ejustice.fr's complaint seems to echo these concerns.'

The complaint regarding price comparison site Ciao, which Microsoft bought in 2008, concerns Google's standard terms and conditions. Microsoft initially took its case to the German competition authority, but Google said it had now been transferred to Brussels.

A Microsoft spokesman said: 'Although we haven't been notified yet by the commission, we do believe it's natural for competition officials to look at online advertising given how important it is to the development of the internet and the dominance of one player. In the meantime, we continue to co-operate with the German government's investigation into complaints brought by Ciao.' Google dominates the search engine market. It has about a 65 percent share of the US market and about 90 percent in Europe.

In a statement, the European Commission confirmed that it had received three complaints against Google that it was looking into. It emphasised that it had not opened a formal investigation. 'As is usual when the Commission receives complaints, it informed Google earlier this month and asked the company to comment on the allegations,' it said. 'The Commission closely cooperates with the national competition authorities.' In a blog, Google's Ms Holtz revealed that the commission had told the company that it had received the complaints.

'Though each case raises slightly different issues, the question they ultimately pose is whether Google is doing anything to choke off competition or hurt our users and partners,' she said. 'This is not the case.' Foundem said in its filing of complaint that Google had the 'ability to arbitrarily penalise rivals and systematically favour its own services'.

It said Google's Universal Search was a 'mechanism for automatically inserting its own services into prominent positions within its natural search results' and 'poses an immediate threat to healthy competition and innovation'. Foundem founder Shivaun Raff said its problems with Google's rankings were resolved in December 2009, but it was filing the complaint on behalf of other search firms. Ms Raff said Google had an 'unprecedented' amount of control over its market. 'We just want a level playing field,' she told the BBC. 'We are very hopeful that our case will inspire others.'-(BBC)