- Associated Press - Tuesday, November 30, 2010

BRUSSELS | European Union regulators will probe whether Google Inc. has been manipulating its search results to stifle competition, funnel more traffic to its own services and protect its global stranglehold of the online search market.

The European Commission’s move, announced Tuesday, is the first formal investigation by a major regulatory agency into these issues and could potentially result in billions in fines, as in the recent cases of Microsoft Corp. and Intel Corp.

Several competitors, one owned by Microsoft, say that links to their services appear too low on Google’s general search results. They also claim 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.

In addition, the commission will look into whether Google prevented advertising partners from posting ads of Google’s competitors on their sites and whether it was making it more difficult for customers to move data from their advertising campaigns to other ad platforms.

The issue could boil down to whether Google has a right to program its search engine the way it wants or whether it is abusing the market power it has accumulated by processing about two out of three search requests made worldwide.

This much is clear: Google’s own services consistently have ranked at or near the top of its search results. In some instances, there’s clear logic to the rankings because some of Google’s properties, including its mapping service and YouTube video site, are considered to be among the best and most authoritative in their categories.

But other Google services, such as finance and health, that aren’t as widely used or as well regarded also tend to get high rankings in the search results.

Google has steadfastly insisted that it avoids bias in its search results by using a closely guarded formula for determining rankings.

But at other times, Google executives have conceded they sometimes give their own services preferential treatment, and have argued that if users aren’t happy with the results, they can easily migrate to another search engine such as Bing.

The three companies that lodged complaints in February are U.K.-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 has struggled to wrestle online market share away from Google.

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