- Associated Press - Tuesday, November 30, 2010

BRUSSELS (AP) — European Union regulators will investigate whether Google Inc. has abused its dominant position in the online search market by deliberately lowering links to smaller rivals’ sites in its search results.

The EU Commission’s probe announced Tuesday is the first major investigation into Google‘s business practices anywhere in the world and potentially could result in billions in fines, as in the recent cases of Microsoft Corp. and Intel Corp.

Three competitors, one owned by Microsoft, say that links to their services appear too low on Google‘s general search results. They also note that when Google offers similar services, such as online price comparison, it puts its own links higher on the sponsored search results, the ones companies have to pay for.

The EU Commission also will look into whether Google prevented advertising partners from placing ads from Google‘s competitors on their sites.

The companies that lodged complaints in February are United Kingdom-based price comparison site Foundem, French legal search engine ejustice.fr and shopping site Ciao, owned by Microsoft through its own search engine, Bing — which itself has has struggled to win online market share.

The investigation does not imply any wrongdoing by Google, which controls about 90 percent of the online search market in Europe, but shows that the antitrust watchdog is taking the complaints seriously enough to launch an in-depth examination of the company’s practices.

The commission has notified the U.S. Department of Justice of its investigation, which is likely to take “at least a few months,” said Amelia Torres, the spokeswoman for Competition Commissioner Joaquin Almunia.

Google has maintained it is confident that it hasn’t done anything wrong.

“Since we started Google we have worked hard to do the right thing by our users and our industry — ensuring that ads are always clearly marked, making it easy for users and advertisers to take their data with them when they switch services, and investing heavily in open source projects,” Google said in an e-mailed statement.

“But there’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns,” the company said.

ICOMP, a business group whose members include Foundem and which is sponsored by Microsoft, said it welcomed the commission’s investigation. The decision “acknowledges some of the issues stemming from online marketplace dominance,” ICOMP legal council David Wood said in a blogpost. “A thorough investigation is necessary to determine the workings of Google‘s black box.”

The probe could trigger a fine of up to 10 percent of revenue — that would amount to $2.4 billion based on 2009 earnings figures.

Europe’s antitrust regulators are not shy in confronting U.S. corporate giants — they’ve already slapped about $2 billion in fines on Microsoft Corp. and 1.06 billion euros ($1.4 billion) on Intel Corp. Earlier this year it launched an antitrust probe into IBM Corp.’s mainframe business.


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