The European Commission launched what it calls an investigation of "exclusivity obligations" imposed by Google on advertisers today. The investigation is in response to competitors' complaints that the search giant uses its dominant position to favor its own web properties and paid search traffic.
According to the New York Times,
The commission said that it was also looking into whether Google may have given its own services “preferential placement” in search results. In addition to its search engine, Google has a growing number of other online businesses, including mapping, translation, video and electronic commerce services, many of which, like the search engine, are supported by advertising.
This new investigation is added to ongoing privacy, copyright, and separate anti-trust investigations in individual European countries. Foundem (a British site similar to buy.com), Ciao (a similar site in Germany owned, not surprisingly, by Microsoft), and eJustice (a French legal search site) are all parties to the complaint which resulted in informal inquiries earlier this year. Although the Commission notes that it has "no proof of infringements", Google has been quick to offer its cooperation.
Microsoft, as most of us will remember, was the first large US computing company to undergo European antitrust investigation and receive multi-billion dollar fines for infringements around Windows. However, as London's Telegraph explains, this is a very different case:
Google is accused by a small number of search sites of unfairly lowering their rankings. Although none of them want to make Google’s secret methods completely public, they’re demanding greater transparency in how Google ranks the “Quality” of sites.
Google's PageRank algorithm, though, is obviously a key bit of intellectual property, critical to its search business and considered by many to be the "secret sauce" behind its success. "Transparency" into the algorithm would obviously not be a desired outcome. Given their large war chest, Google would probably rather pay a few billion in fines than reveal its ranking algorithms, but it's not likely that they'll be given a choice in the matter.