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Google faces new antitrust scrutiny

by Scott Bicheno on 24 June 2011, 10:55

Tags: Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG)

Quick Link: HEXUS.net/qa6hs

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Under the spotlight

The WSJ is reporting that the US Federal Trade (FTC) is launching a broad, formal investigation into Google to see if it has engaged in anti-competitive behaviour in the search advertising market, which it dominates. The FTC has yet to formally confirm this action.

At the same time the FT's sources tell it the attorneys-general in the states of New York, California and Ohio have recently initiated similar formal investigations.

Google has a near monopoly in search advertising in many markets, and although that itself isn't illegal, the use of that position to harm competition is. Google has faced allegations for some time of favouring certain search results - specifically those linking to its own products.

In February 2010 some price comparison sites lodged a complaint with the EU about Google's business practices in this market. This eventually led to the opening of a formal antitrust investigation. More recently Google's acquisition of travel search company ITA prompted howls of outrage from competitors, but was eventually approved by US regulators, subject to some conditions. The recent proposed acquisition of ad optimizer Admeld will be also be scrutinized, according to Bloomberg.

The price comparison complaint was linked to ICOMP - an organisation devoted to promoting competition online. The ITA complaints were aggregated into fairsearch.org, which has similar aims, but identifies Google explicitly as the baddy. Both organisations list Microsoft as a member, which also happens to be Google's main competitor in search.

"The Federal Trade Commission's investigation seems to be focused on the issue of ‘prioritisation'," blogged ICOMP today. "Despite its public denials, there seems to be little doubt that Google, by one means or another, ensures that its commercial services (shopping, maps, music etc) get higher rankings than similar services offered by others. Not only is this totally unclear to consumers, but it can have a calamitous effect on online businesses which compete with Goggle (i.e. competing shopping, map, video etc service providers)."

"The result of Google's anti-competitive practices is to curb innovation and investment in new technologies by other companies," said fairsearch.org in a statement. "These anti-competitive practices include scraping and using other companies' content without their permission, deceptive display of search results, manipulation of search results to favour Google's products, and the acquisition of competitive threats to Google's dominance."

Microsoft, of course, knows all about antitrust scrutiny, have been subject to it for much of its history. It's almost inevitable that any company with an overwhelming market share will be investigated for anticompetitive activities, and regardless of the outcome of this investigation, it will probably result in Google trying even harder to at least appear to deliver unbiased search results.

Google had yet to formally comment on the matter at time of writing.

 

UPDATE - 18:00, 24 June 2011 - Google has now acknowledged the FTC action and blogged on it here.

 



HEXUS Forums :: 4 Comments

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I'm sorry, but how exactly is advertising your own services on your own service ‘anti-competitive’ again? I'm pretty sure that qualifies as marketing in any other industry.
aidanjt
I'm sorry, but how exactly is advertising your own services on your own service ‘anti-competitive’ again? I'm pretty sure that qualifies as marketing in any other industry.

It becomes anti-competitive when you have a monopoly.
How are people suppose to know when Google launches a service when they can't even advertise it without being accused of abusing their search dominance? That's a bit silly tbh. :\
I read it as Google are (allegedly) suppressing results for products other than its own (which would be anti-competitive)

So I did a quick search (on Google) using the term search engine


1.
Dogpile Web Search
All the best search engines piled into one. All the best search engines piled into one. Web · Images · Video · News · Yellow Pages · White Pages …
White Pages - Images - Preferences - Yellow Pages
www.dogpile.com/ - Cached - Similar

2.
Bing
Bing is a search engine that finds and organizes the answers you need so you can make faster, more informed decisions.
www.bing.com/ - United States - Cached - Similar
3.
Web search engine - Wikipedia, the free encyclopedia
A web search engine is designed to search for information on the World Wide Web and FTP servers. The search results are generally presented in a list of …
en.wikipedia.org/wiki/Web_search_engine - Cached - Similar
4.
Yahoo! Search - Web Search
The search engine that helps you find exactly what you're looking for. Find the most relevant information, video, images, and answers from all across the …
Submit a Site - News
uk.altavista.com/ - Cached - Similar
5.
Google
Account Options. Sign in · Search settings · iGoogle. UK. Advanced searchLanguage tools · Advertising ProgrammesBusiness SolutionsAbout GoogleGo to Google. …
Google Maps - Images - iGoogle - Shopping
www.google.co.uk/ - Cached - Similar
6.
Ask Jeeves Web Search
Ask Jeeves a question and Jeeves will answer it. Britain's leading question-and-answer service is as ready for your questions as ever. Try it now.
www.ask.co.uk/ - Cached
7.
What is search engine? - A Word Definition From the Webopedia …
This page describes the term search engine and lists other pages on the Web where you can find additional information.
www.webopedia.com/TERM/S/search_engine.html - Cached - Similar
8.
MetaCrawler
Offers a single source to search the Web, images, audio, video, news from Google, Yahoo!, Bing, and many more search engines.
www.metacrawler.com/ - Cached - Similar
9.
Ask.com - What's Your Question?

I then did the same with Bing (whoever dreamt up that name)

Which bizarrely came up with pages in French (???)

1-10 résultats sur 397,000,000· Avancé

*
Annonces
adCenter Sem Campaigns
·www.tryadCenterNow.co.uk

Start An Sem Campaign With adCenter To Improve Traffic Quality!
*
Search Engine And Cheap
·www.NexTag.co.uk

Best Value for Search Engine And. Find NexTag Sellers' Lowest Price!

*
Web search engine - Wikipedia, the free…
Traduire cette page
o History ·
o How web search … ·
o Market share and wars ·
o Search engine bias

A web search engine is designed to search for information on the World Wide Web and FTP servers. The search results are generally presented in a list of results and are often …
en.wikipedia.org/wiki/Web_search_engine
*
Dogpile Web Search
Traduire cette page

InfoSpace metasearch engine offering search of the general web, or images, audio, video and news. Also offers search of Yellow Pages and White Pages.
www.dogpile.com
*
Yahoo! Search - Web Search
Traduire cette page

The search engine that helps you find exactly what you're looking for. Find the most relevant information, video, images, and answers from all across the Web.
search.yahoo.com
*
Actualités : search engine

o
How Search Engine Can Be More Beneficial to Citizens
Jun 24, 2011 (Daily Trust/All Africa Global Media via COMTEX) – The General Manager VConnect Nigeria, Mr. Deepankar Rustagi in this interview with Nahimah…TMCnet· Il y a 24 minutes
o
Web address boom could be search engine boon
Big Hollywood
o
Baidu Announces Agreement to Invest US$306 Million in Travel Search Engine Qunar
Redorbit.com
*
Google
Traduire cette page

The local version of this pre-eminent search engine, offering UK-specific pages as well as world results.
www.google.co.uk
*
*
Bing
Traduire cette page

Bing is a search engine that finds and organizes the answers you need so you can make faster, more informed decisions.
www.bing.com

But in both cases, their own product was well down the list, so it wasn't true in this case.

Hardly scientific, and perhaps if I had used a different product, the results would have been different, but it seems to be open season against Google at the moment.