Archive
Summer blog: Documents published by the European Commission suggest it is worried that Google manipulates its main search results in its own favour, but the Commission does not seem to be acting on those concerns.
“Google fixes its ‘universal’ search results to disadvantage rivals”. That is the main accusation of companies ranging from Foundem to Expedia to Microsoft, though one that has been repeatedly dismissed by the European Commission.
Or has it?
Complainant Foundem recently published its response to the Commission’s pre-rejection letters, explaining to the 18-odd complainants in the case why the Commission believes that Google’s third settlement provides a broad and comprehensive answer to its antitrust concerns. In that reply, Foundem quotes from the Commission’s ‘preliminary assessment’ of the case from March 2013. (European Voice has also seen another copy).
The assessment, which ought to be the basis of the settlement negotiations, was appended to the pre-rejection letters. Significantly it makes reference to Google giving its own services “more favourable ranking” in its own search results, ie, discriminating against rivals.
In public the Commission has given Google a clean bill of health with regards to manipulating its search results. Yet in the confidential pre-rejection letters, the Commission revives the accusation and even claims that the settlement would resolve it.
Which begs the question: what’s going on?
Some history
The Commission started receiving complaints about Google in 2008.
Chief among the complaints was the allegation that Google’s search engine was demoting rival search services, including price comparison websites and travel websites, and promoting its own search services, such as Google Shopping and Google Travel. This was done through ranking as well as through the favourable placement of advertising to Google services. Given that Google has somewhere around 90% of Europe’s search market, it is an important – and some say vital – gateway for websites.
In May 2012, Almunia said that he had identified four antitrust concerns and that he would try to settle the case with Google because the “fast-moving” nature of the market would benefit from a “quick resolution”.
See here for more details on those concerns; suffice it to say that the manipulation of universal search results and the ranking of webpages therein did not feature among them.
When asked about ranking, Commission officials would refer, rather cryptically, to how the demotion of some websites was the natural counter-party to other websites being promoted.
In January 2012, the US’s Federal Trade Commission struck a settlement deal with Google. On the subject of alleged “search bias” in Google’s search results, the FTC’s member were unanimous: the evidence did not support the accusation.
By contrast, in April 2013 Almunia presented a much wider settlement deal wrested from the world’s fourth largest company by market capitalisation – though one that did not include commitments on ranking. But it unravelled in the face of pressure from complainants and politicians.
At the end of 2013, Almunia presented a second deal, which also unravelled.
On both occasions Almunia won improvements from Google – although the overall framework of the commitments has remained the same.
As for the complainants, they describe the deal as worse than doing nothing, principally because a settlement deal would, they claim, shelter Google’s search engine from EU antitrust attention for some five years.
Third time lucky?
So on 5 February, Almunia presented a final, third deal with the search engine, in the same vein as the two previous settlements. “I don’t see why I will change my mind,” he confided to the assembled press corps.
Over the last few months the Commission has been sending out letters to the complainants explaining why it would accept the settlement offer and close the case. It is those letters that give rise to the questions over ranking.
Part of the preliminary assessment reads: “The Commission takes the preliminary view that Google’s more favourable ranking and display in horizontal web search results of pages from its own vertical web search services is capable of foreclosing or likely to foreclose competition in the EEA. By diverting traffic away from competing vertical web search services, Google creates an advantage for its own vertical web search services.”
The settlement deal does not address the alleged manipulation by Google of its search results. But, the Commission says in its pre-rejection letter, this does not matter:
“The proposed commitments address adequately the concern that Google displays more prominently links to Google’s own specialised search services in Google’s General Search Results Page than links to competing specialised search services. This is irrespective of whether the greater visibility of Google’s specialised search services is caused by the prominent placement of Google’s specialised search services on Google’s General Search Results Page or the demotion of links to competing specialised search services.”
If the Commission suspected that Google fixed its search results, why did it drop the concerns? Of all the accusations, that is the most serious one and the one that, if true, would most harm consumers.
It has emerged over the last week that Almunia is likely to ask Google to make new concessions – for the third time. Even so, he is unlikely to revisit the issue of how Google ranks rival websites in its search results. For right or for wrong, that will leave many questions unanswered.