Europe Readys Anti Trust Charges against Google

[Brett_Tabke]

[recode.net...]

The E.U. is reportedly plotting a fine as large as $6.4 billion, roughly a tenth of Google’s annual revenue.

[wsj.com...]

Europe’s antitrust regulator plans to file formal charges against Google Inc. for violating antitrust laws, a person familiar with the matter said Tuesday, stepping up a five-year investigation likely to become the biggest competition battle here since the European Union’s pursuit of Microsoft Corp. a decade ago.

[huffingtonpost.com...]

The European Union will accuse Google on Wednesday of abusing its dominant position in Internet searches, opening the U.S. tech company up to a risk of massive fines and enforced changes in its business model, the Financial Times and Wall Street Journal said on Tuesday.

....accuse Google of breaching competition law by diverting traffic from rivals to favor its own services, said the FT, adding that some fellow commissioners had been concerned Vestager was narrowing the probe.

[samwest]

The whole case being discussed by the French is ludicrous, that is like asking Coca-Cola for their recipe (as people enjoy drinking it).

But just like Coca-Cola, they may drink it (they either don't know any better or have no choice), but it's extremely bad for them. What other company operates under such a cloak and has such incredible economic impact? I'm not losing my house because I drank Coca Cola or ate the Colonel's 11 secret herbs and spices. We need to know the in"greed"ients.

For the most part, people are sheep. They blindly consume what is put in front of them. It's always been the governments stand to protect the people. Otherwise we'd wind up with a world full of thalidomide babies. IMHO, unfortunately Google has become to the tech world what crystal meth is to society. It's no longer a search engine, it's a penalty engine used to suppress interests other than it's own.

[diddlydazz]

@Samwest

I am not sticking-up for Google's practices - Quite the opposite

I try and suppress my *thoughts* regarding what Google has become and how disgusted I am with some of their practices (after all, it was the webmaster that introduced Google to the public in the first place) - The phrase "stabbed in the back" comes to mind.

But to request that a company divulges their company secrets is just unacceptable IMHO.

[rish3]

The whole case being discussed by the French is ludicrous, that is like asking Coca-Cola for their recipe (as people enjoy drinking it).

I suspect they understand this. Asking for it both sets a tone, and gets the press writing about it.

[samwest]

@diddly - I agree, it would be unacceptable if the company activities were benign or helpful to society and economics. But when it tilts the playing field to such a degree as they have, it's time to put our collective foot down. Remember Larry's Love Letter? Got your blood boiling yet? They've become a greedy, creepy monster and like MIcrosoft (was), they need to be broken up or they need to lighten up on pushing their own interests with slight of hand tactics. I always thought their black box, non disclosure method was wrong.

I'm not big on allowing the Governments of the world to interfere, but Google has managed to destroy the free internet with their greed worse than any government agency. At this point I'd rather see Gov regulation than the spiral of pay to play greed that's now out of control.

[MrSavage]

To the point that Google should just shut it down in the EU or something along those lines. That's laughable isn't it? Trying to be clever, but think about it. We know what would happen. In fact, that would clearly underscore the power/dominance/control they have. If one change can happen and their is complete chaos in the world, then I would source out alternatives and figure out why everything is tied into that one all important source. Is Google like the sun, the air and the water? Remove it and we will be doomed? Let's not get there thanks. I'm all for some awareness. I don't support knocking down a successful business, but having some caution and open questions/answers is only going to serve everyone well. I guess not for the stake holders, but for everyone else it's a win.

[superclown2]

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System: The following 5 messages were spliced on to this thread from: http://www.webmasterworld.com/goog/3005971.htm [webmasterworld.com] by brett_tabke - 9:52 am on Apr 16, 2015 (cst -5)

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According to the WSJ [wsj.com ] the decision has been made and antitrust charges will now be laid against Google.

[superclown2]

More info here from the BBC [bbc.co.uk ]. It looks like she's throwing the book at them.

This will get messy. I hope none of us get caught in the crossfire.

[rustybrick]

Official: [europa.eu...]

Google's response: [googlepolicyeurope.blogspot.be...] and [googleblog.blogspot.com...]

[samwest]

I hope none of us get caught in the crossfire.

We've all been in the line of fire for over 5 years. It's about time somebody stands up to this monster.

[superclown2]

We've all been in the line of fire for over 5 years. It's about time somebody stands up to this monster

I agree that they need facing up to but they are not all bad for us.

I don't know if you were trading online in the pre-Google days? I was doing all this 13 years ago and until Google came in and cleared up much of the mess things were much worse, believe me. Three hundred dollars to Yahoo just to get your site considered for listing, paying Looksmart Goto, 7search for every organic click, grovelling to ODP editors to include your site on DMOZ, queing behind the spammers on Dogpile, Lycos, Mamma, unmarked paid ads mixed in with organic search results; yes it was a spammer's paradise and I'm not ashamed to say I filled my boots with it alongside everyone else but it didn't bear well for the future. It would be good to see Google cut down to size and some of the more blatant abuses banned but I reckon that a chastened Google, not a destroyed one, is in all of our best interests.

[rish3]

I don't know if you were trading online in the pre-Google days? I was doing all this 13 years ago and until Google came in and cleared up much of the mess things were much worse, believe me.

The beginning phase of the Embrace, Extend, Extinguish plan is always well received :)

[EditorialGuy]

Danny Sullivan has written an in-depth article that analyzes the issues and possible remedies:

[searchengineland.com...]

In the end, the results are likely to be cosmetic changes to save face for the EC, which has to show some kind of pyrrhic victory (however small).

[rish3]

Danny Sullivan has written an in-depth article that analyzes ...
In the end, the results are likely to be cosmetic changes to save face for the EC

Danny Sullivan is a US based SEO. Not sure I'd bet the farm on his analysis, as his background doesn't seem to have much to do with either the EU or antitrust.

There's also an article [nytimes.com] on the New York Times, written by someone with a law degree, and many years of experience covering antitrust cases. It's not nearly as flippant about the potential consequences.

[superclown2]

In the end, the results are likely to be cosmetic changes to save face for the EC, which has to show some kind of pyrrhic victory (however small).

Come over to Europe, feel the depth of feeling about Google, and then write about what the results will be.

My own prediction, speaking as an Englishman, is that Europe will throw the book at Google if they don't toe the line.

'Lobbying' isn't going to cut any ice over here.

Then, after Europe, there are a whole long line of other legal jurisdictions waiting for a lead.

I hope that the guys at Google don't share your misplaced confidence. If they do they'll be in for a very severe shock. Having made a lot of money from Google over the last decade I don't particularly want them to be badly damaged but if it's what's necessary to curb them then so be it.

By the way a pyrrhic victory is one in which the winner loses so much that the victory isn't worth having in comparison. In this battle Europe has everything to gain and nothing to lose except perhaps the displeasure of a soon-to-be outgoing president.

[flatfile]

@rustybrick LOL that "response" reads like a PR statement. Nowhere does Google show that it doesn't favor its own products in the search results. All it's saying is "look at these competitors that we haven't killed yet".

[EditorialGuy]

'Lobbying' isn't going to cut any ice over here.

It already has. (See: Fairsearch.org.)

[nomis5]

Agreed the French idea is stupid especially given there is probably a different algo for every country G has Serps for. Far more complex than just one Coca Cola recipe.

But there is a pattern emerging here, in Europe anyway, of governments not approving of how G operates. If G don't take note they are in serious trouble

[jmccormac]

The French idea is nuts but par for the course with France and its relationship with the Internet.

@Superclown2 Yep. It is amazing how some posters in the US think that US regulations apply to Google doing business in the EU. At this stage it is like Google supporters are grasping at straws. Danny Sullivan's article addressed some of the technical issues but this is now a legal matter. The battle will be fought with lawyers and filings.

@EditorialGuy Still hoping that this is just a flash in the pan? The thing about the EU that most people outside the EU don't seem to understand is that the EC may appear to be a load of rubbish on the side of a hill but when it starts to move it does so as a landslide and no company wants to be under it when it does.

Google seemed to think that it could get away with the kind of thing that it does in the US because it lobbies politicians and has fawning FUDbuddies in the tech media who continually tell the SEO business and public how great and friendly Google is when it is not. Google was fined about half a billion US Dollars for its drugs pushing activities. When Facebook was launching on the stockmarkets, Google came out with that dog and pony show about its Wikipedia scraper claiming it was a "Knowledge Graph" when everyone associated the term "Social Network" with Facebook. Now Google has plundered Wikipedia and has demoted it in the SERPs. A few weeks ago, one of the main domainer business blogs noted that Google was pushing its domain name venture, domains.google.com, to the top of searches for domain name registrations. (It varied between location and user.) This was quite odd because in terms of the domain name business, Google is a mickey mouse operator. The biggest player in the US (and at a global level) is Godaddy with over 50 million domain names under management and the larger registrars tend to have millions of domains.

That rubbish about Google being innovative is just that. Murdering thousands of Mom and Pop websites with clueless "algorithms" that never actually fix the problems with spam is not innovation no matter what Google's FUDbuddies claim. One does not fix a leak in a fuel tank by adding more fuel. And what Google is doing in promoting its own properties in SERPs is no different to the aim of the SERP spammers.

Google is replicating what Yahoo and AOL did before it. It is trying to keep users on its sites and properties. It is trying to be a portal. And it may be doing this at the expense of fair competition with other operators.

Rather than relying on the waffle from people who really don't understand what is going on and who have never dealt with the EU at the legal level (or indeed at any level other than visiting for a holiday), it may be better to read the official document on the charges and procedure:

[europa.eu...]

These are the preliminary conclusions in the Statement of Objections:

Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.

Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google's general search results pages.

Froogle, Google's first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.

As a result of Google's systematic favouring of its subsequent comparison shopping services "Google Product Search" and "Google Shopping", both experienced higher rates of growth, to the detriment of rival comparison shopping services.

Google's conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google's product.

Regards...jmcc

[EditorialGuy]

Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.

Planet Earth to EC: Google's "comparison shopping service" is...get this...advertising. (Just like Foundem, which has been lobbying the EC for years. Mind you, Foundem isn't a real search engine; it's an advertising engine, since all of its "results" are ads.)

Let's say that, worst case, the EC demands that Google replace a percentage of its ads with similar ads for a handful of handpicked competitors like Foundem--either on a revenue-sharing basis or as a gift extorted on the recipients' behalf by the EC. How does that foster competition and innovation? Are "small businesses" going to benefit? Not a chance. It's just robbing Peter to pay Paolo or Pierre.

[jmccormac]

This might come as a bit of shock to you, EditorialGuy, but the EC doesn't care what you think it said. These are the preliminary conclusions in the Statement of Objections. To translate it for you in simple terms:

Google rigged the results.

Google rigs the results in favour of its own properties at the expense of other companies in the market.

Google tried its own product in a relatively fair and competitive market. It crashed and burned.

Google then set about rigging the results to prioritise its own properties at the expense of other companies.

Google's activities stifle innovation, affects consumers and results in unfair competition in the market.

Google has a very high percentage of the search market (90% or so in many EU countries) so this is a very serious issue. To the EC, you are just an irrelevant poster on a forum without any real understanding of what is happening. The Google FUDbuddyism that is so prevalent in the US tech media isn't so prevalent in the EU and most "technology" journalists are mere non-techs who haven't a clue about what is going on beyond the press releases that they recycle. This thing stopped being a technological story and has become a political and economic story with the advent of the EU's legal action. This means that the story will be subject to political, economic and legal analysis of the type that would not be seen in the USA. You seem to have a weird idea that the EU is a single state. It is not. It has many member states and now these member states are going to be under pressure to examine Google's activies in their markets.

Regards...jmcc

[EditorialGuy]

The latest issue of The Economist (a publication based in Europe) has just published a piece titled "NOTHING TO STAND ON: Europe is right to worry that it lacks big digital platforms. But reining in Google is no solution."

The article goes on to say:

"But rather than trying to rein in American firms, European politicians should focus on fixing what is holding back the old world’s most promising platforms: the lack of a common digital market. Today only 15% of consumers shop online across borders within the EU. To set up Europe-wide operations, an e-commerce firm has to jump through numerous bureaucratic hoops, from tax rules to labour laws, in each country....If Europe wants to be America’s equal in the creation of new technological platforms, it needs to recognise the importance of scale. America, with its large and open domestic market, has it. Europe does not."

[economist.com...]

[RedBar]

I think that someone at The Economist needs to learn what actually does happen in European business, that's BS!

[RedBar]

Retail alone:

E-commerce is the fastest growing retail market in Europe. Sales in the UK, Germany, France, Sweden, The Netherlands, Italy, Poland and Spain are expected to grow from £132.05 bn [€156.28 bn] in 2014 to £156.67 bn [(€185.39 bn] in 2015 (+18.4%), reaching £185.44 bn (€219.44 bn) in 2016. In 2015, overall online sales are expected to grow by 18.4% (same as 2014), but 13.8% in the U.S. on a much larger total.

[retailresearch.org...]

Fallacy - Not all the best deals are to be found online.

[jmccormac]

Well Google has one of their own on the board of "The Economist".

[theguardian.com...]

Regards...jmcc

[EditorialGuy]

Jmccormac: Yes, and The Economist disclosed that in its article.

Let's cut to the chase:

The EC's "Statement of Objection" accuses Google of displaying its own ads on its own pages and not promoting competitors' ads.

Not everyone thinks that complaint makes sense.

[jmccormac]

@EditorialGuy, I quoted the EC's Statement of Objections above. It doesn't actually say what you are claiming. Perhaps you should try reading it. There's quite a difference between what the Statement of Objections actually said and your grossly inaccurate claim. Just to illustrate the gap between your claim and the EC statement, here it is again:
Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits. This conduct started in 2008.

Google does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google's general search results pages.

Froogle, Google's first comparison shopping service, did not benefit from any favourable treatment, and performed poorly.

As a result of Google's systematic favouring of its subsequent comparison shopping services "Google Product Search" and "Google Shopping", both experienced higher rates of growth, to the detriment of rival comparison shopping services.

Google's conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google's product.

It is very precise. It is highly targeted. And it is going to cause a lot of problems for Google.

Regards...jmcc

[EditorialGuy]

I quoted the EC's Statement of Objections above. It doesn't actually say what you are claiming. Perhaps you should try reading it.

Your sarcasm is misplaced.

What the EC "Statement of Objections" refers to as Google's "comparison shopping service" is advertising, pure and simple.

Not only that, but it's also clearly labeled as advertising. (That's what the word "Sponsored" means.)

The bureaucrats who wrote the Statement of Objections apparently don't understand the difference between advertising and organic results.

[fathom]

EC can certainly make their own rules but agree no matter how big & deep Google's pockets are an attempt to pick is setting up a dangerous precedence for selective paid or free advertisements at "page top".

I want to freely advertise on your website too but me just wanting that right doesn't mean you did anything wrong.

[rish3]

What the EC "Statement of Objections" refers to as Google's "comparison shopping service" is advertising, pure and simple.

Surely someone as intimately familiar with Google's history knows that "Google Shopping" was not advertising in the beginning, and that the transition was neither pure, nor simple. Don't you remember the Scroogled ads?

[glakes]

I want to freely advertise on your website too but me just wanting that right doesn't mean you did anything wrong.

Such a simplistic response overlooks the fact that Google's search engine is a gateway to ecommerce and information that is relied upon by 90% of end users. This leaves businesses reliant on Google whether they want to admit it or not. And let's not forget Google also owns the dominant mobile operating system, email service, web browser, online video site, etc. How can one monopoly have so many sub-monopolies? It's rather simple how Google does it - they buy into a service and utilize their gateway (search engine) to elevate their interests while closing the door on others.

Think of it this way: I own a railroad with 90% of the railroad tracks, build most of the railroad cars and use those railroad cars to transport mostly products I produce. If you want to buy a widget, chances are it will be mine because this is mostly what I transport on my railroad. This is the same thing Google is doing. The only difference is most people can't comprehend how this influence has shaped our current economy and how it will shape it in the future. But the economic consequences of allowing this monopoly to develop even more sub-monopolies may pale in comparison to how information in the future may be manipulated to shape the realities of the populous. Anyone that wants to place all this trust into a for profit corporation must not be looking at the long-term consequences of inaction. Fortunately the EU appears to be applying a little more logic to the situation than others (including the FTC).