By Alistair Barr
At the heart of the European Commission's antitrust complaint
against Google Inc. is the search giant's alleged practice of
highlighting its own shopping services in response to search
queries, ahead of links to similar services run by rivals.
Such "search bias" is important because more than 90% of
Internet searches in Europe are conducted on Google. Given that
dominance, promoting its own services while demoting others may be
illegal under EU law, some attorneys say.
"Search bias is a logical focus for the EU because its
competition law is concerned about fair and open market access
along with consumers' interests," said Eleanor Fox, an expert on
European antitrust law at New York University.
Google sent a memo to employees on Tuesday saying it has a "very
strong case," in part because its search engine provides quicker,
more direct answers to queries, saving consumers time. The company
also highlighted competition from other search services, like Apple
Inc.'s Siri and Microsoft Corp.'s Cortana, as well as specialized
services from Amazon.com Inc., eBay Inc. and others.
Rivals who run other comparison-shopping sites, as well as
Google rivals in other "vertical" areas such as travel, maps and
local services say Google has bolstered its own offerings in those
areas, and directs users to its services, ahead of links to
others.
Staffers at the U.S. Federal Trade Commission in 2012 found that
Google favored its own shopping, travel and local services in
general search results, even when some of those products weren't
most relevant to users. In shopping, Google targeted comparison
shopping sites for demotion in its search results despite feedback
from those rating the results that they preferred the sites over
other links that were promoted, FTC staff also said. They also
found evidence that Google was concerned about losing search
business to specialty search rivals. FTC Commissioners later voted
unanimously not to charge Google with antitrust violations.
The European Commission on Wednesday said Google gives
"systematic favorable treatment" to its shopping service, Google
Shopping, in its general search results. That may artificially
divert traffic from rival comparison shopping services and hinder
their ability to compete, it argued.
"Users do not necessarily see the most relevant results in
response to queries--this is to the detriment of consumers, and
stifles innovation," the commission said in a statement. "To remedy
such conduct, Google should treat its own comparison shopping
service and those of rivals in the same way."
While Wednesday's complaint focused on shopping-related results,
EU Competition Chief Margrethe Vestager said the agency is
examining Google's conduct in other vertical areas, such as "hotels
or flights or maps."
In a preliminary assessment in March 2013, the European
Commission said Google's more-favorable ranking and display in
general search results of pages from its vertical search services
was likely to reduce competition in Europe.
The investigation of Google stems from a 2010 complaint by
Foundem, a U.K.-based vertical search and price-comparison website.
Foundem said that in 2007, Google had begun including its own
product-search service in its "universal search" results, pushing
down links to rival shopping search and price-comparison
websites.
Between October 2007 and October 2009, the number of unique U.K.
visitors to product-comparison services including Shopzilla and
Nextag dropped 41% on average, while visitors to Google's Product
Search service jumped 125%, Foundem said in its complaint, citing
data from researcher comScore.
Since then, Google converted its product-search service into
Google Shopping, where merchants pay to display items. Rivals
complained that Google favored results for Google Shopping when
users searched for products in the general search engine.
From the start of 2013 to early 2015, leading shopping and price
comparison services in Germany, such as Nextag, Ciao.de and Twenga,
saw their organic search visibility drop 91% on average, while
visibility for Google Shopping surged 880% in the U.S. and more
than tenfold in Germany, according to Searchmetrics. The online
search analytics and content performance firm runs hundreds of
millions of keywords through search engines, tracks where websites
show up on results pages and measures how likely they are to be
clicked on.
Online travel and mapping companies have voiced similar
complaints, although the EU didn't include those subjects in its
formal charges against Google. Online-mapping company Hot-Map.com,
best known for its maps of European cities, said monthly visits to
its site have fallen to about 100,000, from a peak of 721,000 in
July 2007, around the time that Google began including its own map
service in general search results.
Michael Weber, a director at Hot-Map, said the company is losing
money, has laid off dozens of workers and is "holding on" in the
hope that the EU's antitrust charges against Google make it easier
to compete.
"Local map providers may do only one city really well, but they
have no chance of being found online because there's the big Google
map on top today," he said.
Rolfe Winkler
contributed to this article.
Write to Alistair Barr at alistair.barr@wsj.com
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