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COMPETITION LAW NEWS: Google Inc. Investigated by EU Commission

Wednesday, 30 May 2012 15:31

On May 21, 2012, Vice President of the European Commission and Commissioner responsible for Competition Policy Joaquín Almunia has issued a statement on the investigation being undertaken against Google Inc. for possible breach of competition law.

Following a number of complaints received by the EU Commission, in November 2010, the Commission had launched an investigation into allegations that Google Inc. was abusing its dominant position on the relevant market.

The investigation has identified four (4) concerns where Google Inc. may be deemed to have abused its dominance and Commissioner Joaquin Almunia has publicly declared that the Commission was allowing: ”Google an opportunity to offer remedies to address the concerns we have already identified.” after Google Inc. has expressed its willingness to discuss the concerns that the Commission might have without having to engage in adversarial proceedings.

The concerns identified by the Commission are: (i) that Google Inc displays links to its own vertical search services which are specialized search engines which focus on specific topics, such as for example restaurants, news or products. Alongside its general search service, Google Inc. also operates several vertical search services of this kind in competition with other players. In its general search results, Google Inc. displays links to its own vertical search services differently than it does for links to competitors and the Commission has expressed its concern that this may result in preferential treatment compared to those of competing services; (ii) that Google Inc. copies content from competing vertical search services and uses it in its own offerings. 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. In this way they are appropriating the benefits of the investments of competitors. The Commission has expressed it concern that such a behavior could reduce competitors' incentives to invest in the creation of original content for the benefit of internet users; (iii) that Google Inc. has given rise to certain concern with regards to agreements entered into between Google Inc. and its partners on the websites of which Google Inc. delivers search advertisements. Search advertisements are advertisements that are displayed alongside search results when a user types a query in a website's search box. The agreements 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; (iv) that Google Inc. is deemed to give rise to certain contractual restrictions on software developers with regards to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google's auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google.

For Further Reading: Press Release dated 21 May, 2012 issued by the EU Commissioner responsible for Competition