EC To Investigate Search Engine Policies

BY CCIA Staff
November 30, 2010

The European Commission has announced that it was opening an investigation into search and search advertising focused on Google. The investigation comes after complaints from three companies that were unhappy about their rankings in either the regular unpaid Google search results or Google ads.

The Computer & Communications Industry Association, which has promoted competition among tech companies for nearly 40 years, has seen the EC’s history of investigating large companies to ensure competition. So this announcement does not come as a surprise. We expect that the methods of other search engines’ may also be examined so that authorities can adequately compare the different policies and practices of search engines when it comes to ad and search rankings.

Antitrust issues can be complex, and what is even trickier here is the actions under complaint are claimed to have been done to put consumers rather than business relationships first.

The consumer issues in this case are less clear than others in recent years where officials found tech products intentionally being shut out of the marketplace. Inherently consumers want search results that are valuable to them – not results that favor all the companies wanting their attention. To do this most search engines have ways to move low quality sites down in their rankings.

What has not been looked at before by antitrust authorities is whether companies can run afoul of the law by building a service that puts consumer interests above all else. Other search engines in the mid 1990s often relied on paid results rather than distributing content based on what sites users chose. Those two business models competed for years, and it appears those companies favoring consumer input over paid results fared better in the marketplace that has now developed. But that marketplace is changing yet again.

Even as this investigation begins, many alternative means of discovering online content/services are developing quickly. For an investigation to be more than a time snapshot, it would need to really capture the market distortion and base its judgment on a broad investigation into search engines and other competing sources of content and online ads.

It will be up to the EC now to sort through the interests of the companies that are complaining, of the company being targeted, of online search and advertising competitors and those of consumers. And, after this initial investigation the EC will be able to see if any further investigation or action is necessary.  The commission has an excellent record of vigorous protection of competition and consumers when the evidence and harm is clear — and of not pursuing the frivolous claims sometimes brought to it.

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