Google search practices draw scrutiny of European antitrust officials

European antitrust officials announced Monday that they have found four areas of concern in an investigation into Google’s search practices, saying the search giant has “a matter of weeks” to volunteer remedies.

The findings mean that the clock effectively has started ticking for Google to come up with solutions to the regulators’ concerns — or face formal charges that could result in a hefty fine or restrictions on Google’s behavior.

Pressure is rising on the dominant search engine as the European investigation coincides with a separate inquiry by the U.S. Federal Trade Commission. Many antitrust experts say the E.U. investigation, which has been going on since November 2010, could set the tone for the U.S. probe.

In a letter to Google Chairman Eric Schmidt, the E.U. office responsible for competition policy said it found that the firm appeared to favor its own services — for instance, Web maps or travel reviews — over competitors’ offerings.

“We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence,” said Joaquin Almunia, vice president of the European Commission, the executive arm of the E.U. responsible for competition policy.

The firm also allegedly copied content such as user reviews from competing search engines without permission, which could reduce a competitors’ incentive to invest in original content, according to the E.U.

The antitrust enforcement office said Google appeared to shut out advertising competition and made it hard to use its ad service on other software platforms.

“I hope that Google seizes this opportunity to swiftly resolve our concerns, for the benefit of competition and innovation in the sector,” Almunia said.

Samantha Smith, a Google spokeswoman, said the company disagreed with the E.U.’s conclusions, but would be open to discussion. In the past, Google has argued that it simply offers the best possible search results for users and that sometimes those results are the company’s own products.

“We’ve only just started to look through the commission’s arguments,” Smith said. “Competition on the Web has increased dramatically in the last two years since the commission started looking at this, and the competitive pressures Google faces are tremendous. Innovation online has never been greater.”

In a sign that U.S. regulators are as serious as their European counterparts about pursuing potential charges against the company, the FTC recently hired noted trial lawyer and former federal prosecutor Beth Wilkinson to lead its investigation into Google.

The company has expanded rapidly from its main search engine into more specific services. Competitors who have filed complaints have accused the company of leveraging its dominance in its general search engine to boost the traffic of Google’s other products — for instance, by showing Google Maps above all other results when users search for an address. The result, they say, is that smaller competitors don’t stand a chance against Google.

Foundem, a shopping search site that became one of the first companies to push the E.U. to investigate Google, said it was pleased with Almunia’s announcement.

“Foundem’s goal has always been to ensure that Google exercises its extraordinary market power responsibly, by reinstating the level playing field that is required for innovation and competition to thrive,” Foundem co-founder Shivaun Raff said in a statement.

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
Jia Lynn Yang is a staff writer at The Washington Post who covers policy and business. Before joining the Post, she worked at Fortune magazine.
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