Is Google abusing its dominant position in online advertising and content delivery? On the very day when Google participated in a celebration of the free flow of information, a European Commission vice president warned that his office is within weeks of filing a formal Statement of Objections.

European Commission Vice President Joaquin Almunia, as part of his regular public statement this morning,  warned that Google may be responsible for at least four classes of antitrust violations. In Europe, that means blocking or disallowing competitors from lawful means of providing alternative services. Google appears to be cornering the market in search-driven advertising, Almunia said, not only by favoring links to its own services over those to competitors, but by crafting the format of AdWords campaigns so as to attain "de facto exclusivity."

Agreements between Google and its advertising partners, Almunia said, mandate that partners must "obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers... This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters."

Another of Almunia's charges has a familiar refrain: that Google shows bias toward its own services when reporting search results in certain categories. Of course, when you query Google for anything that has a geographic location, you get a map from Google Maps. Taken as a whole, though, Almunia's allegations suggest something more sinister: that Google is rigging the online advertising market by systematically weighting the pages its users are likely to choose.

For instance, Almunia alleges that Google copies content from vertical search services. Given his charge that competing services are weighted down, this suggests that Google may be copying competitors' content in the interest of demoting it in the user's mind, even if subliminally. The implication is that Google knowingly traps online advertisers into a system that generates greater value specifically to keywords that Google can most directly promote, and that it has made its AdWords system so distinct from competition that marketers can't afford to campaign through multiple services.

"We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising," Almunia said.

Almunia expressed his concerns in a letter to Google Chairman Eric Schmidt, giving his company "a matter of weeks" to address his concerns with a remedies package. European and American news services stated that he asked for a settlement; however, he did not use that word (which, in the U.S., would imply an exchange of money). More accurately, Almunia is seeking action on the part of Google that would enable him to forgo the first step in formal antitrust proceedings.

In a statement to ReadWriteWeb, Thomas Vinje, counsel for the advocacy group FairSearch EU, emphasized the part of Almunia's grievances that the vice president himself chose not to emphasize: the part about weighting search results. "Any settlement between Google and the E.C. would need to restore lost competition and remedy the anticompetitive effects of Google's conduct in both specialized and general search," Vinje said. Frequent readers will remember Vinje as the attorney for the advocacy group EPIC, which in 2007 scored points with then-European Commissioner for Competition Neelie Kroes in her antitrust campaign against Microsoft.

 


Photo credits: European Commission