Google's 'preposterous' antitrust remedies come under attack from rivals

Google's 'preposterous' antitrust remedies come under attack from rivals

Summary: Competitors believe Google's proposed antitrust remedies are a distraction from claims it manipulates organic search results.

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TOPICS: Google, EU
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Google's proposed measures to address competition concerns about its search business in Europe are "preposterous" and will likely exacerbate anticompetitive effects, according to its rivals.

The European Commission is using a market test to assess whether or not to make the proposals that Google submitted last month legally binding.

The proposals were meant, among other things, to address concerns over Google's placement of its own vertical services — such as its price comparison site, Google Shopping, and travel products — ahead of rivals in its search results. 

Google has offered to clearly label its own services and display links to three rival specialised search services, but according to Foundem, a UK-based search company that was among those who filed antitrust complaints with the EU back in 2010, the proposals divert attention from how Google manipulates organic search results and may make the competitive landscape worse.

The company wants the EC to reject Google's proposals and instead require that Google treat all services equally using the same crawling, indexing, ranking and penalty algorithms. Others, such as the lobby group FairSearch, broadly agree with this aim. 

Foundem argues (PDF) that Google's proposals focus exclusively on Universal Search, a box that contains blended natural search reslts with links to Google's own vertical search offerings, rather than the natural search results and AdWords that rivals believe it manipulates.

"This fundamental flaw means that Google's proposals cannot alleviate either aspect of the commission's concerns regarding search manipulation," it says. "The proposed changes would have no impact on Google’s ability to systematically penalise rivals in its natural search results and would do nothing to curtail the unassailable advantage that Universal Search affords Google's own services."

The company claims Google's offer to label its Universal Search boxes will have little impact on traffic diversion, and rivals will still need to pay Google to be listed alongside its own products.

For verticals which it monetises with pay-per-click or display ads, three rival links would be shown; for those it doesn't monetise, no competitors' links would be included; but for those it monetises with paid placement, three links would be included — as long as rivals paid for them to be so.

"If adopted, the paid rival link elements of Google's proposals would provide a powerful additional incentive for Google to transition its vertical services over to its new paid placement model," Foundem said.

"The introduction of paid rival links represents a potentially catastrophic escalation of Google's abuse, providing a new and immensely powerful anti-competitive tool, which in many cases would hand Google the majority of its rivals' profits," it said. 

Another gripe is that rivals can only apply to Google to be considered as a competitor in one product category, which Foundem claims will disadvantage companies with businesses across several product areas.

Meanwhile, Foundem accuses Google of systematically penalising vertical search competitors in its organic results under the pretext of "lack of original content".

Google previously denied it alters to its algorithms to hurt competitors after Jeffrey Katz, the CEO of Nextag, a US price comparison company, last June complained Google had made changes to its algorithm that would "effectively punish" them.

ZDNet has asked Google for comment on the Foundem report, and will update the story if it receives any.

Topics: Google, EU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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50 comments
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  • Huh?

    Since when is promoting one's own business ahead of competitors considered a violation of Anti-Trust laws? It's just good old business sense.
    cmwade1977
    • History lesson

      "Since when is promoting one's own business ahead of competitors considered a violation of Anti-Trust laws?"

      Since Microsoft.
      toddbottom3
      • write your own history

        Microsoft embedded software into their products that created a vertical integration. Google is a web page, you can go to any page you would like and create a search. This not similar to Microsoft, only those that would like to penalize google for their ability to beat the competition would make that assertion.
        Chuckshurlow
        • Reread the post I replied to

          Where did the original poster say anything about websites or OSs? The discussion involved whether or not it can be anti competitive to promote your own product ahead of the competition's. Period. It applies to Google just the same as Microsoft.
          toddbottom3
          • So sad the original poster

            couldn't satisfy your picayune, idiosyncratic query-warpitude. Chuckshurlow had it right, you didn't. Bet you're republican, as in neo-tea. Change the rules or definitions to suit your pecadilloes and prejudices. Sometimes, dude, a cigar is just called a cigar.
            spixleatedlifeform
          • Attack!

            I can't argue so I attack with creative insults! I use big words that make me feel superior and I think will impress people but really just make me look like a dick. Waaaaaa!

            I'm quite certain anticompetitive laws were not originally intended to be this restrictive. Whens it gonna stop? Do storefronts have hang thier competitors flyers in thier windows? When did most popular product equate to monopoly? And laws; doesn't make anything right. We make laws and we often make bad ones. "it's the law" or "the law says" aren't great arguments, at least, I don't see any valid argument it that.

            Slippery slope is a valid argument when there's an obvious slope. I see a slope here and I'm wondering where the bottom is. I don't even like where we are now.
            shadfurman
          • Okay, since you brought up the ugly elephant in the room...

            and the other people who work under the CEO of Microsoft, tell me something. How is Bing getting away with rebranding Google results? They have been doing it since day one, and Google only politely asked them to stop in an open letter. You have to laugh at the 'Bing it on' campaign. They talk about how their results are the best "for the world's most popular searches". How do those searches get to be popular? By Google's ratings system! My point is that Microsoft found a way to steal from Google and then say "see how much better we do things than Google?" so why can't companies in the EC?

            As for registering a company in a single product area, that may just be a temporary restriction for early adopters. As time goes on, look for Google to add functionality to their registration pages, the same way they did their search page, their ad products, their user services... Hell, just about everything they have done has been expanded since its inception. Besides, how many times have you searched for something you desperately need, only to get results that include porn sites, Microsoft ads and 'results' from other 'search engines'?
            Garry Hurley Jr
          • Because they aren't

            Microsoft have stated and many people agree that they don't just directly copy Google search results. They analyze and deliver search results from multiple different engines including using their own engine and orders them based upon what Bing sees as important. It's highly implausible that Bing would simply directly copy Google results and nothing more. If they did, what would be the point of crawling the web themselves, they wouldn't need to.
            Drobilliard
          • I gave up Google years ago...

            I'm strictly on Bing and don't miss google one bit. The search results are solid so no complaints here. Google doesn't get a free pass anti-competitive practices shouldn't be allowed no matter who or what the company is doing.
            Rob.sharp
          • Anit-competition is anti-competition period.

            Toddbottom3 is absolutely right. The issue has nothing to do technology. The issue is anti-competitive conduct regardless of manner or medium of transaction. End of story.
            Sahalu
      • google do not say their search tool is advertising controlled

        Companies who provide services as ubiquitous as web search should at the very least clearly display that search results will be influenced by paid advertisers. It is perfectly OK for google to display ads alongside search results based on your search- but the search index itself should not be influenced by payments. I think they will shoot themselves in the foot with this, with or without EU intervention, because the majority of users will soon realise what is happening and search elsewhere. I used to use a tool that searched for the best ISP deals until it became obvious they had been got at in a way that prevented smaller companies getting a look in and was always displaying the same few providers no matter what criteria you searched by. Lets not forget they are making money on the back of something they provided as a community service for it to continue its success they need to demonstrate the impartiality of their search tools.
        It is not about what the letter of the law says but about principles and if companies abandon all principles they do so in the longer term at their own peril.
        cymru999
      • Actually since IBM

        IBM got nailed for anti-trust long ago, that's where MS learned the art.
        Cynical99
    • New Business Paradigm

      You didn't know, there is a new business paradigm now, if a company like MS cannot compete in the marketplace, they can whine and complain like kindergarten kids, and then the teacher will take away the competitions business and give it to the whiners.
      bigpicture
      • bigpicture.

        Are you claiming to see the big picture? too funny. You posted your little blind eye, slanted ABM post and never mentioned the many times over the years Google has whined and cried and filed suit against Microsoft to the DoJ and the EU. Over and over again they've done so, even at a time they were promoting the Googlized version of IE (remember that?)
        This is the first time MS has pushed back and you come up with this post?
        Btw, w/o the massive Windows infrastructure, and don't kid yourself, there was nobody else in postion that had Gate's vision, Google Search would have been nothing. It has ridden on the back of Windows ever since. Google gets paid by people using Windows machines to read their ads.
        Funny they'd ever want to complain about their golden goose, eh? But according to you, every time Google filed against MSFT they were asserting a new business paradigm.
        LOL.
        xuniL_z
      • So wrong.

        That's such an incorrect view of the facts.
        Drobilliard
    • Business sense?

      Actually it's not good business sense to do what Goggle wants to do since they would be allowed to keep new small businesses from entering the market which would put less money into the economy. When the economy is bad their profits fall. Since they have 90% share of the pie Google should be concentrating on making the pie bigger and not getting a bigger share of the pie that is already as big as it will get. Search result today are important and, as far as paying to be higher up in the search results, it's like paying protection money to the Mafia.
      jsargent
      • they should have a right to try

        The bid will probably fail for the reasons you state. However, they should be able to take the gamble.

        Google is not completely omnipresent and does not have the power to completely crowd-out competition. I use as little Google as possible and survive. I use Duckduckgo.com for search and mapquest.com for maps. All I use is their very basic email servers and their translation site.
        Dave Keays
      • Bad business decision by Google

        Pushing out organic results in favor of proprietary and paid results is bad for the economy, and long term it's bad for Google.
        We're a direct competitor of Frommers, and over time google has pushed us down and down and down due to youtube, google images, google maps, frommers, zagats, results pushing us into oblivion (and hopefully not bankruptcy).
        If google hides the best web content under paid and proprietary results, it will lose credibility, legitimacy, and the ability to provide the content people are looking for. Then it will lose market share. I've always been a huge google fan in every respect, but they're shooting themselves in the foot with this.
        jasonhal
  • Last time I check www.google.com was owned by Google?

    Why should anyone tell Google how to run their search engine? I think their rival (Yahoo and Microsoft) should have dancing monkey on their homepage. That is about as bad as telling Google how to run their search engine. It is a service on their site that they make available for free for everyone to use. This is not utility company providing power to Hospital, this is Google running a search engine service on their site. Oh my gosh they promote themselves on their site, how dare they. I think Microsoft and Yahoo should but links to their three rival on their homepage, it is only fair.
    alex_darkness
    • I know you were trying to make a point

      "I think Microsoft and Yahoo should but links to their three rival on their homepage, it is only fair."

      Sounds ridiculous, right? Yet last I checked Windows is owned by Microsoft and Microsoft has been forced to implement a browser ballot with links to rival browsers in Windows.
      toddbottom3