November 30, 2010

EU To Launch Google Antitrust Probe

Regulators from the European Union (EU) announced Tuesday that they will launch an antitrust investigation against Google, looking into accusations that the Menlo Park, California based computing and IT company "abused a dominant position" in the online search market.

According to AP Business Writer Gabriele Steinhauser, the European Commission probe will mark the first major investigation into the online giant's business practice, and comes as a result of complaints by three of Google's top competitors--Microsoft, the UK price comparison website Foundem, and French legal search engine

Mark Sweney of the Guardian reports that the three companies are accusing Google of giving "preferential placement" to its own services and unfairly "lowers the ranking" of unpaid search results of some services. He adds that the accusers also allege that Google requires "exclusivity obligations" from advertising partners, thus preventing them from placing "certain types of competing ads" on other company's websites.

In a statement released Tuesday, Google said that they would cooperate with the investigation.

"There's always going to be room for improvement, and so we'll be working with the (European) Commission to address any concerns," representatives from the company said in the statement, according to the AFP. They added that they have always strived to make sure that "ads are always clearly marked, making it easy for users and advertisers to take their data with them when they switch services and investing heavily in open source projects."

Under European Commission rules, Google can be fined up to 10 percent of their annual global revenues if they are found guilty. In 2009, the company earned approximately $24 billion, meaning that the penalty could be as large as $2.4 billion, should misconduct be proven.

According to Steinhauser, "The investigation does not imply any wrongdoing by Google, which controls about 90 percent of the online search market in Europe, but shows that the antitrust watchdog is taking the complaints seriously enough to launch an in-depth examination of the company's practices."


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