Google vs. Europe: The Internet Giant Is Facing a Lot of Complaints In Europe




Joaquin Almunia's circular picture is probably hanging in Google's EU Headquarter with a dart in the center of his nose... with the eyes the next potential target...

More than two years ago, in November 2010, the European Commission  decided to open an antitrust investigation into allegations that the Internet giant has abused a dominant position in online search (in violation of Article 102 of the Treaty on the Functioning of the European Union). Its core role is the regulation of monopolies. Although dominance alone is not an abuse, a company in a dominant position has a special responsibility to ensure that its conduct does not impair the competition. As of March 2013, in Europe, Google controlled 93% of the search engine market, over 97% of mobile search and 87% of search advertising revenue[1]. Even though I am a lawyer and I am not supposed to understand numbers (that's for engineers), it looks like Google nailed all the competitors!

Since a couple of months ago, Google has been making an effort to settle potential antitrust claims in 'four areas of concern' (see here) identified by the European Commission. Joaquin Almunia, European Commissioner for Competition, and his staff are currently evaluating the settlement proposals sent by Google at the end of January 2013.

According to one of the anti-Google lobbying groups 'FairSearch.org', a settlement will achieve Almunia’s goal of restoring competition to Internet search and related markets if it delivers positive answers to the following questions:
  • Does Google apply the same rules to its own services as it does to others when it returns and displays search results?
  • Does Google always provide the user with the most relevant results at the top of the search page, even if those come from non-Google sites?
  • Is Google prevented from blacklisting competing companies or categories of companies from appearing in the top search results (for example, online travel agencies or metasearch sites)?
  • Is Google prevented from using the quality scores and minimum bids it assigns to each website as a pricing mechanism to exclude competitors from appearing in the top display of search results?


More practically, one issue in the investigation focuses, for example, on whether or not Google might have taken unfair advantage of its market dominance by giving preference to links to its own services, like Google Maps, when answering queries.

Recently, on 21 March 2013, an open letter was sent to the Commissioner asserting that the EU must address 'Google's search manipulation practices' in the form of 'the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services'. We should remember that earlier this year the Federal Trade Commission in the US (FTC) settled with Google and declined to pursue the search neutrality question. This doesn't seem to be the case in Europe

As we all know, the Commission has a long history of pursuing dominant companies which abuse their monopoly power to harm innovation, competition, and consumers. For instance, in the case of Intel, the Commission issued an SO against Intel in 2007, and levied a record €1.06 billion fine in May 2009. Following the Commission fine, Intel settled an antitrust lawsuit filed against it by AMD for $1.25 billion in November 2009. Almunia said that if this all works with Google, an accord should be reached after the summer vacations. 


On April 13, Google has (for the first time!) agreed to legally binding changes to its search results (except Google's algorithm). If this agreement is adopted, Google will change its results page by clearly highlighting search results from its own services and including links to rivals such as Microsoft. Be ready for a Christmas tree of search results illuminated by Google lights products and services. All these remedies proposed by the Giant will shortly be put to a 'market test' to see whether these changes will be sufficient or not. 


But that's not all ...


In April 2013, European antitrust regulators received another formal complaint about Google's Android Operation System for mobile devices. The giant is accused of using the Android software 'as a deceptive way to build advantages for key Google apps in 70% of smartphones shipped today'. For instance, phone makers that agree to use Android — and that also want Google applications like YouTube — face contractual requirements to place those applications and other Google-branded applications in prominent positions on the mobile device’s desktop, said the lead lawyer of a group of Google's competitors.

In the meantime, in the UK, more than 100 people have joined a lawsuit against Google for secretly tracking their online activity. Olswang, the law firm handling the claims, has also received requests from claimants in other European jurisdictions. As a reminder, in August 2012, the FTC in the US fined Google $22.5 million for Safari browser privacy violations. Google has bypassed privacy settings in Apple’s Safari to be able to track users of the browser (with cookies) and show them advertisements, and violated an earlier privacy settlement with the agency. Google has said its actions 'had been unintentional and had resulted from a change in Safari of which Google was unaware'.


Lately, some articles have suggested that Google Glass 'wearable computing' device might raise concerns with privacy. Some people are afraid that we could inadvertently become part of somebody else's data collection without clear consent. Europe's attitude over data protection might cause Google some problems, but we have not reached that stage... yet!


In sum, it seems that Google's EU lawyers will have more than a few sleepless nights in 2013...





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