EU denies Google is under investigation, early evidence appears weak

This morning, despite clearly and pointedly phrased headlines such as this one proclaiming that the European Commission had opened an antitrust investigation into Google, the Commission released a statement this morning saying no such investigation was launched.

"The Commission has not opened a formal investigation for the time being," reads this morning's EC statement. "As is usual when the Commission receives complaints, it informed Google earlier this month and asked the company to comment on the allegations." No further information is being provided to the press on this matter -- again, as per protocol, because no investigation has begun.

Instead, according to the EC, the Commission received three formal complaints about the company's conduct, and as per protocol, forwarded the complaints to Google. The difference between an investigation and an inquiry, in this context, is that an investigation seeks information to build a specific case against its subject. No such case exists against Google, although it is possible that Google's response to the EU could trigger the launch of a formal investigation. That has not happened yet.

Google was under no obligation to come forward with details of the allegations against it, but it did so anyway: Two of the complaints come from firms with either direct Microsoft backing or ties to organizations funded by Microsoft, and both operate shopping sites. Ciao, a German-based (not Italian) shopping service recently purchased by Microsoft and integrated into its British and German Bing services; and Foundem, the proprietor of a British-based shopping site and the member of an organization called Initiative for a Competitive Online Marketplace that claims funding by Microsoft, have both issued formal complaints that Google downplays search results that lead to their sites, in Google results. This according to Google's assessment of the complaints in its blog post this morning; no other statements on the matter have been released by the parties involved.

Foundem's situation first came to light last August, when an article in the UK publication The Guardian profiled its founder, Richard Wray. In that article, Wray claimed that its service was being virtually ignored by Google. Foundem is essentially an aggregator of price comparisons for computers, appliances, other consumer market items, and real estate; as is Ciao, whose British service now bears some resemblance to Bing Shopping in the US.

Typically, search engines that have their own shopping services do not feature the aggregate pricing assessments of other search engines with their own shopping services; for example, Bing Shopping does not feature results from Google Product Search. For competitors to Google Product Search, this may be a problem.

Google did not say much about the complaint from French-based legal research firm, other than to say its complaint paralleled that of Foundem. That site describes itself as a professionally researched search engine that performs its own assessment of the relevance of legal material it has indexed based not on popularity, like other (unnamed) search engines, but upon direct relevance to the case or subject of law being studied. The site prides itself on providing fewer, better, search results, indexed over 100 sites, in an effort led by Dominique Barella, former president of France's union of magistrates, and a deciding judge in many technology-related cases there over the years. For example, in 2005, Judge Barella was under the opinion that unauthorized sharing of MP3 files may not be a criminal offense on the same order as theft.

In an interview published today by the French news site Eco89, Barella stated he provided the European Commission with a 40-page complaint, complete with technical documentation and evidence, which he says proves that Google blatantly and willfully delisted eJustice from its search results, not in terms of searching for "eJustice" but specifically with respect to results that point to eJustice's index. As an example for Eco89, he stated that Google doesn't point to eJustice in searches for rental contract cases. He complained that Google told him, not in writing but verbally, that Google would index eJustice's search results if eJustice could provide them in a manner accessible via Google's algorithms.

Making eJustice comply with Google's pattern, Barella argued, is unfair because the two sites are search engines, and are therefore competitors.

It is not impossible for Google to index search results of other Web sites' search results. But typically, Google is only able to find the queries themselves through links to those sites on the pages it indexes. Those links tend not to reside on the most popular pages, and Google ranks pages -- as eJustice's own "About Us" page notes -- by popularity as well as relevance. If, by eJustice's own account, it indexes less popular, more relevant, sources, then by Google's publicly known formula for assessing page rank, it may not score enough points by its own design.

The mistaken assessment of this morning's inquiry as an investigation may have been exacerbated by Google's own account of the affair this morning. First, senior competition counsel Julia Holtz referred to the matter as "scrutiny" -- a term often applied to investigations. Later, she mentioned that Ciao's complaints were originally handled by the German competition authority, referring to the matter as a "case" that was now "transferred to Brussels," the seat of the EC. The EC is denying that this is a case in the formal sense.
Since there is no investigation taking place after all by the EC, there's no timetable for the next step in this inquiry.

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