Google Faces Further Antitrust Scrutiny in Europe

The European Commission has announced a preliminary investigation into alleged anti-competitive behavior by Google, following complaints lodged with it by Microsoft-owned Ciao, U.K.-based price comparison site Foundem, and French legal search engine ejustice.fr.

Though the individual details of the complaints have not been disclosed, a Google blog post published yesterday implies the companies have accused it of hindering potential competitors by reducing their visibility in search results. Google firmly denies “doing anything to choke off competition,” and says it is “confident [its] business operates in the interests of users and partners, as well as in line with European competition law.”

The Commission itself released a brief statement this morning acknowledging the complaints and its preliminary examination into the matter. It added, however, that it has not opened a formal investigation “for the time being,” and that “no further information can be given at this stage.”

As Douglas Lahnborg, a competition partner at law firm Orrick points out, it’s not unusual for a company with such overwhelming market dominance to be subject to antitrust scrutiny. Indeed, Google itself has found itself on the receiving end of competition-related investigations by the Commission numerous times, most notably regarding its acquisition of DoubleClick in 2007.

However, Lahnborg suggested the search giant is likely to attract further scrutiny from regulators as its dominance of the European search space continues, and as it continues to grow its business in other areas.

“As Google itself has acknowledged, this type of attention is in the nature of being such a big player. It will expect this type of action, but will have to take it very seriously given the European Commission’s powers to impose severe sanctions on companies that abuse their dominant position,” he told ClickZ News. In addition, he suggested the media attention surrounding the announcement — which included a front page article in the U.K.’s Financial Times newspaper this morning — demonstrates “broad interest in the continued regulatory investigations into Google’s conduct.”

In its blog post written by Julia Holtz, Google’s senior competition counsel, Google said simply that “this type of scrutiny goes with the territory when you are a large company,” but that it will provide the Commission with “feedback and additional information” on the complaints.

However, as Holtz points out, links exist between the companies involved and Google’s major competitor in the search space – Microsoft. Ciao was acquired by Microsoft last year, and Foundem is a council member of a Microsoft-funded organization dubbed “Initiative for a Competitive Online Marketplace.” Council members of the organization fund and guide the group’s activities.

In addition, she states a number of competing vertical search engines currently rank well in Google’s search algorithm, suggesting poor visibility in its results pages is dependent upon the companies themselves. “Many vertical search engines like Moneysupermarket.com, Opodo, and Expedia typically rank high in Google’s results,” she said.