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by Stephen Logan on 3rd August 2011
With the news that Google currently has 9 active antitrust complaints in the EU alone, it’s difficult not to sit up and take a little notice. Whilst some grievances, particularly the newer complaints which come from “smaller companies”, may not have much of a basis or relate to issues that can be remedied without massive repercussions, others are a little more serious.
Earlier this year President Sarkozy of France was demanding tighter regulations on major global Internet companies, particularly Google. The basis for complaint was that, whilst making huge amounts of money within individual territories, they remain free from jurisdictional power and exempt from taxes.
Google have also trampled all over a number of search verticals, including the hugely lucrative travel market .By developing their own platform, they can effectively (theoretically at least) eliminate competition within that field. In the past this has seen them run into difficulties with the likes of Foundem and ejustice.fr [see: Should Search Engines Be Regulated to Ensure Search Neutrality].
Companies feel that they are given harsh penalties within search rankings, simply because they compete within the same space as Google. This may well be true, however the search giant has always stringently denied any such claims of wrongdoing, instead pointing to flaws within the sites themselves.
The difficulty for Google comes when proving that a loss of rankings is down to the automated algorithm, rather than manual tampering. Where penalties are applied, such as those levelled at Ciao!, it needs to be as a direct response to genuine contraventions of T&Cs or public complaints – as Google actually claimed.
The bottom line for Google is always the bottom line. If it can make the company bigger and richer, they will look to take advantage. As a business gets larger though, smaller competitors can suffer. This is what regulators and antitrust officials across the world need to monitor. If Google leverages its power as the largest search engine to funnel visitors to its own services and away from others, many of whom may be largely reliant on search visits, then it’s easy to see where issues arise.
In May the company got a kicking from regulators in North America following issues regarding pharmaceutical advertising on AdWords, costing them an estimated $500 million. This highlights just how seriously these issues are taken and how willing antitrust officials are to take action. So what can Google do to avoid trouble?
Well, the only real answer is to be less competitive. But that simply isn’t viable. The business is still growing, they have the knowledge and manpower to deliver quality products across a number of verticals. Legislative amendments such as those proposed by Sarkozy could turn the tide, but antitrust cases are now so frequent that it has almost become a part of how Google operates – and is likely to remain that way for some time. Unfortunately, for many companies they have to accept that they will either succeed in spite of the search engine, be amalgamated within it or severely lower expectations.
The issue of monopolising the market constantly casts a shadow over Google and having 9 antitrust cases live in Europe will do little to diminish those dark clouds. Are Google going against their own mantra and “being evil”, or are they just victims of their own success? Can an ethical company really have so many legal problems hanging over it? It’s an issue that polarises opinion and is likely to continue doing so for some time.