A letter sent today to Google from the European Commission outlines four key areas the firm can address to avoid fines and more stringent remedies. The Commission suggested Google’s site search offerings and AdWords platform hinder competition.
Ad-supported search services Google provides for publisher websites are under scrutiny, according to a letter sent to Google CEO Eric Schmidt from Joaquin Almunia, VP of the Commission, responsible for Competition Policy. Almunia argued that agreements Google has with website partners using its search platform “result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services. This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters.”
Almunia gave Google “a matter of weeks” to propose “remedies” for each EU Commission concern.
Another advertising related worry is that Google AdWords “imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.”
Almunia also suggested that by displaying its own vertical search products differently in its results, Google may hurt competing services. He also noted that “Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorization…We are worried that this could reduce competitors’ incentives to invest in the creation of original content for the benefit of internet users.”
The U.S. Federal Trade Commission is also probing Google as it relates to antitrust issues. Senators Herb Kohl of Wisconsin and Mike Lee of Utah today praised the EU’s decision to work with Google. “We are hopeful that Google will be a willing partner with the EU’s Competition Commissioner. We continue to urge the FTC…to ensure a competitive search market where consumers can fairly pick the winners and losers in our online economy,” they noted in a statement. The two senators head up the Senate Antitrust Subcommittee.
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