Google has been accused of abusing its Internet search dominance by promoting its own businesses at the expense of competitors. The European Commission warned the company to propose changes to its method of answering user queries in “a matter of weeks.” Google accounts for four out of every five searches in Europe.
European regulators issued the ultimatum because they believe Google tips the scales in its favor with its search results. Search has become a critical component of the internet, directing consumers to the services and information that they desire. European antitrust chief Joaquín Almunia said that regulators had identified “four concerns where Google business practices may be considered as abuses of dominance.”
Google may have unfairly exploited its market position by displaying links to its own services when answering a query. This could demonstrate that Google was giving preference to their own products over those of competitors. Another area of concern involves how Google conducts its advertising business.
Google was also accused of including material in its own search results that was copied from competitors’ Web sites. Restaurant guides and travel sites were particularly affected. Mr. Almunia said, “In this way they are appropriating the benefits of investments of competitors.”
Google has long said its search results are neutral. A Google spokesman stated that the company disagreed with the commission’s conclusions and said “innovation online has never been greater.” Regulators are trying to strike a delicate balance as they try to fix problems in the fast-changing technology industry before proposed remedies lose their relevance.
If Google does not comply, the company could possibly face an antitrust lawsuit. In Europe, antitrust fines can reach up to 10% of a company’s annual global revenue. Google’s 2011 revenue was nearly $38 billion. The case could also inspire a Federal Trade Commission investigation if Google decides to fight. European officials and United States regulators have been working closely. Google is the dominant search engine in the United States.
Paul Lugard, an assistant professor at the Tilburg School of Economics and Management in the Netherlands, said that there may be a need to act swiftly, but there are concerns that “this form of highly unusual public encouragement in the full glare of the media puts even more pressure on companies like Google to settle early rather than contest charges that they really do think are groundless.”