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Google v Regulators: The battle begins

Rory Cellan-Jones | 16:58 UK time, Tuesday, 30 November 2010

It's been predicted for years - and now it has finally happened. The company that many see as the most powerful force on the internet - and some believe abuses that power - is being investigated by a major competition regulator.

Google sign

 

The EU has launched an inquiry into complaints that Google has favoured its own price comparison services at the expense of rivals. The charge, from companies like Foundem, is that users searching for something like "best price for Canon cameras" see results from Google's own shopping service ranked far above links to rival comparison sites, and that sponsored links also come out higher.

The rivals believe that when Google claims that its search algorithm is a completely objective device, simply hunting down the best results for users, that's hokum. Instead, they say, it's tailored to meet the voracious commercial ambitions of its creator. The case for the prosecution has been rehearsed over the past few months in this blog funded by Foundem.

The inner workings of Google's PageRank system will now presumably be examined by investigators in Brussels, although they will find that it's a moving target, chaging almost every day.

Google appears to have learned from the mistakes of other high-profile American targets of the EU regulators. Instead of greeting the news of the inquiry with outrage and bluster, it has issued a diplomatic statement, stressing that it always does its best to make sure everything in its search business works accurately and fairly but "there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns."

But the search giant obviously thinks the accusations are baseless. Insiders say price comparison sites like Foundem don't come top in searches for a good reason. Someone searching for, say, a hotel room in Barcelona, wants to be taken direct to sites in Barcelona, not to a price comparison site where they can then begin their search again. And the case for the defence is amplified in this post by Danny Sullivan oon his Search Engine Land site.

This is just the very beginning of what is likely to be a very lengthy investigation - and we are a long way from seeing any penalties imposed on Google. But any company which has the power and dominance in a market that the search engine giant enjoys is bound to attract the attention of the regulators. Microsoft, for example, was at war with the competition authorities in Washington and then Brussels for more than a decade.

Now they are turning their sights on a new behemoth. How ironic that it's happening just as Facebook is beginning to challenge Google's status as a web superpower. Perhaps Mark Zuckerberg should start hiring some competition lawyers in readiness for its turn in the firing line.

Comments

  • Comment number 1.

    Nearly all search engines, including Google, rank sites according to their popularity. One of the main factors is how many other sites link to a particular site. For example, if lots of sites link to the BBC, then the BBC will appear high in the search list. This approach makes it very hard for any new business to achieve a high ranking. People won't get to find out about your site and then link to it unless they can find it; and they can't find it because it's not high up in the search list because no one is linking to it. Chicken and Egg.

    It's all the fault of the consumer. Pretty much everyone goes to Google, because it gives them what they were looking for most of the time. Also, it's simple to use and uncluttered. If consumers used other search engines, that use different ranking criteria, they would discover a whole world of the web they've not seen before - and it would also help smaller companies who struggle to break into the webspace due to entrenched existing companies who have been around for years and top google's searches regularly.

  • Comment number 2.

    Heaven protect us from EU bureaucrats meddling with technology companies. The last time the outcome, at vast taxpayer expense, was a pointless screen after installing Windows that allowed users to actually choose not to install Opera. Now another lame duck company has jumped on the bandwagon.

    Google is a commercial enterprise. Of course it is going to promote its own price comparison service over others. Why should it do otherwise? Whatever next: an investigation into software sales sites for promoting products you have to buy and which they can make a profit from rather than freeware?

  • Comment number 3.

    It would be interesting to know whether Google's core search results algorithm is also biased in favour of sites which implement Google Adwords and / or Google Analytics code.

  • Comment number 4.

    Google is, unlike pretty much any other company in the world, caught in sort of Dr Jekyll and Mr Hyde scenario.

    On the one side there is desire to be the most perfect search engine - a goal driven by motivations of the sort normally found in academia.

    On the other is shareholder-driven pressure to be the most profitable advertising company they can be.

    And right now it is the latter that is perhaps winning the battle a little too comprehensively.

    I give the following as an example that does take a little bit of understanding, and I pick the search phrase out of dozens of similar ones that I have spotted.

    Search Google.co.uk for "dyson vacuum" (a popular shopping term). On a typical browser / screen resolution set-up you will get between 3 and 4 "natural" search results and around 10 paid-for results visible without scrolling.

    Fair enough, Google is a commercial enterprise and a roughly 70/30 split is not bad for a virtual monopoly.

    However, if you are seeing the typical results set (i.e. you don't have search customisation turned on, etc) then you'll spot that all the natural search results are for the same website (the maker of the dyson vacuum).

    Again, nothing wrong with the manufacturer appearing at the top of the natural search results - they are almost certainly the most relevant result. But are they the top 4 most relevant results? What about those sites relegated "below the fold" as it is referred to (and which far fewer customers bother to visit)? Are Amazon, Tesco, Kelkoo, and Wikipedia less relevant to users than a 3rd or a 4th link to the same website?

    Almost certainly not (as two are leading retailers of the product and the third a trusted price comparison service). The question really needs to be asked why is this happening (and it is not just this query, it happens for many so-called "brand" searches).

    One possible interpretation of this situation is that it suits Google to only really have one unique natural result in the top 3 or 4 results, because it changes it from 4 vs 10 (natural v paid) to 1 v 10 (unique natural urls vs paid). And with that, significantly more clicks earn some money for Google.

    Again people might argue that this is still somehow "fair enough", but if so I'd leave you with the observation that in their paid advertising terms of service, no domain is allowed to appear more than once because it gives less choice to the customer. It is just a shame that similar concerns for diversity of results are not carried through to the naturals results any longer...

    Whether an EU-led enquiry is the right forum for Google's split personality to be addressed is not something I can comment on knowledgeably. However, it is going to happen somewhere, because fair, relevant results and shareholder returns are evidentially not entirely compatible.

  • Comment number 5.

    I used to think google was great, but now its just too comercialised. Anything you search for it is not giving information, it is just acting as an advertising agency. Example: tried searching for AVCHD codecs, just got loads of adverts for camcorders. At one time google would have turned up loads of techno stuff on AVCHD with the same search.

    Not sure I see the issue here though.

    Why would anyone expect a business to promote its own rivals with equal billing to its own business?

  • Comment number 6.

    There's a surprise, a company favouring its products over its competitors.

  • Comment number 7.

    We have about 200 websites and operated a mini search engine using them. After 5 years of growth, in January of 2009 over 90% of them disappeared from the Google search index at the same time and our earnings dropped to a third of what they were. I do not believe this could be due to any algorithm but rather looks like a manual switch. Google would not discuss this despite many emails. I am therefore glad that they are being investigated at last for manual manipulations of their search results which should of course be based on purely automatic and fair principles.

  • Comment number 8.

    Which search engine should we trust to give us fair and equal access to information? Comment no.7 any answers?

  • Comment number 9.

    If the EU should be investigating anyone its Apple Inc. Their whole product range is designed to make it difficult, if not impossible, to purchase software and content from anyone else other than Apple directly. Apps can only be purchased from their App store and sellers must have approved by them.
    Google's Android platform is totally open to install Apps from anywhere you choose. Imagine the uproar if the next version of Windows was locked so the end user could only buy games and software direct from Microsoft own website. Why does no one else see how corrupt this is??

  • Comment number 10.

    Oh god, it didn't take long for the anti-Apple nutters to get started, did it?

    In fact, just two of Apple's products are served by their app store, and the overwhelming majority of apps are not written by Apple. This is a very different model than that used by Google's Android systems, and consumers are of course free to choose whichever one they prefer. I suspect that for most users, the different app store models are not really the determining factor in which phone to choose. Apple hardly have a monopoly in the mobile phone market, or even the smart phone market. They didn't create the tablet market, and they will soon have serious competition. So there's nothing close to a monopoly, let alone corruption. Nor is this unique. For example, I can only buy Sony approved titles for the PS3, but that doesn't make them corrupt.

    But I do think it's outrageous that the EU can investigate Google for providing an ad-funded search service. If you don't like Google's results (and I often don't), use Bing, or any of the smaller search services. Being a monopoly is not illegal. Abusing that monopoly is. And I don't think Google are abusing their position, merely exploiting it for their own benefit, which is exactly how we should expect capitalist companies to behave.

    Remember that the EU are the clowns who broke up Sky's "monopoly" of football rights. So now, I have to pay an extra tenner a month to ESPN to watch all the football that used to be included in my Sky subscription. Thanks guys.

  • Comment number 11.

    @At 10:00pm on 30 Nov 2010, Arrrgh wrote:
    There's a surprise, a company favouring its products over its competitors.

    Couldn't have said it better myself.

    The only porbelm i find lately in Google is that too often the result is that of another search engine that doesn't actually find what i am looking for. when you click on it in google it directs you to another search with the same phrases you wrote in google and more wrong answers and partial matches. this is the only thing that bothers me with them.

    ranking higher their own sites is normal. and also it's not so easy to get to the top but with propper and relevant text it is actually quite easy to get there. might take 1-3 months, but eventually...

  • Comment number 12.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 13.

    Any reason why the anti-Google campaign this is a part of wasn't mentioned? The case has 0 merit, Google already gave the reason why they are ranked so low back in September when the first case was brought up in Texas from the (and I kid you not) "Google Slayers".

    Basically a bunch of lawyers who happen to all work for a certain tech company in Redmond have launched a bad PR campaign against Google, lots of anti-Google ad's along with ridiculous legal cases to try and back up the FUD.

    This has nothing to do with Google treating people fairly and is simply about a competitor that is quickly become irrelevant thanks to the work of organisations like Google, trying desperately to fight to keep hold of their monopoly. Kind of sad really, I thought they would go down with a bit more dignity...

    Don't get me wrong, Google do need to be regulated as far as holding personal info is concerned, but this case has nothing to do with that.

  • Comment number 14.

    If Google are going to be investigated on any ground it should be to look for the elements of their search algorithm that deliberately give preference to big brands, not because they're refusing to display results from affilates like Foundem (who add in another stage to your shopping process and take a ommision of between 2% and 6% of your purchase).

  • Comment number 15.

    Just did a search for Nikon D3000. The first 5 results are for Amason, Digitalrev, Camerabox, nikon sub domain, and dpreview.

    Then 3 results from shopping results for nikon

    After that it is back to amazon, a photography blog, trusted reviews (which I would not trust with a bargepoll) and so on.

    It is a pretty mixed bag.

    If I do "cheapest nikon" I again top with amazon, but then get various UK companies and one or two price comparison sites.

    Does those results fit with the complaint?

  • Comment number 16.

    I think it has to pointed out who is complaining here.

    Many of the so-called price comparison sites are little more than auto-compiled listing sites designed to give online shopping sites more exposure in search engines - they are not really for the consumer, that is just a front, it is the links that they want.

    Some years ago, google started cracking down on two lots of sites.

    Firstly was the directory listing sites that had no purpose; you could submit to these thousands at a time to give you lots of links to your site and push you up the search rankings when crawled by search engine. These were seen as unfair as they were really only visited by crawlers.

    The second was companies who had one or two core businesses but set up hundreds of "related" sites with loads of links to each other and, most importantly, to the core sites. Again, this was seen as trying to manipulate search results over companies who used a far more legitimate route.

    The shopping review sites are, in some ways, a modern incarnation of that and this probably includes Google's own offering, ironically.

    You get your self listed and then get some sort of review put up their to make your self more searchable. You dont have to, however. Try searching for a review for any product and see how many sites list the product and have "be first to review.."

    But the website has got it self a listing in this way and pushed it self a little higher up the rankings.

    Maybe a nice friendly TV company could do an investigative documentary into how companies market themselves through search engines - what tricks they use which might surprise the average search engine user, what scams SEO companies pull on their clients and so on. (One phoned me up and tried to tell me the highly technical things they would do to my website metatags that would cost me thousands - you know, those two lines of text it takes you 30 seconds to write?)

    I think search engine results are much more useful than they used to be in the early days of Infoseek and the first incarnation of Ask Jeeves where all the top results were paid for, but they can never be perfectly balanced, and I imagine they still can be corrupted and probably are. It would be nice to expose how.

  • Comment number 17.

    6. At 10:00pm on 30 Nov 2010, Arrrgh wrote:

    There's a surprise, a company favouring its products over its competitors.

    Couldn't agree more.

    Google is being taken to court for not promoting its rivals products?

    Can you imagine this happening in any other industry? McDonalds taking Burger King to court because they wont sell Big Macs?

    The entire complaint seems to be based on flimsy logic - I dont imagine it will have anything like the fallout of the EU vs Microsoft fiasco

 

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