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Google, this is why you’re under investigation

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Dick DastardlyIt’s hardly a secret that most big businesses hate regulators. They’re often seen as cartoonish villains, meddling in the affairs of others to satisfy their own (bureaucratic) agendas rather than serve the interests of ordinary people.

Sometimes that’s accurate — though not always. Take, for example, the decision last year by European officials to launch an antitrust investigation into Google. It was met with howls of derision by those who felt that it was sour grapes from competitors (including Microsoft) or simply a misguided attack on a hugely successful foreign company. Those concerns were exacerbated even further last month when the U.S. Federal Trade Commission decided to start its own inquiry, with a confidence no doubt spurred on by Europe’s actions.

It’s easy to dismiss the claims against Google as carping by rivals. But for anyone who thinks the EU investigation isn’t warranted, here are a couple of data points worth thinking about.

First, figures from Hitwise suggest Google now accounts for 92 percent of all search traffic in the U.K. That’s an all-time high for the company, signifying complete domination of the market. The figure is actually higher in some other European countries, and significantly more than its North American market share. Google dominates the European market to a degree that is far greater than its successes at home.

Elsewhere, it emerged over the weekend that the Belgian newspapers locked in a dispute with Google were back in conflict again. A consortium known as Copiepresse famously filed a lawsuit against the company in 2006, claiming Google News should not excerpt their articles without permission or payment. The news group won the case, eventually, but it was pretty acrimonious. Now, however, it appears Google is playing hard ball again, saying in order to comply with the court’s wishes it has to remove Copiepresse entirely from its index.

So that’s erasing Copiepresse not just from News, but also from the main Google search engine, too.

Google spokesman William Echikson said the court decision applied to web search as well as Google News and the company faced fines of 25,000 euros ($35,359) per infringement if it allowed the newspapers’ websites to keep appearing.

“We regret having to do so,” he said. “We would be happy to re-include Copiepresse if they would indicate their desire to appear in Google Search and waive the potential penalties.”

Copiepresse argues it’s a willful misreading of the court’s decision and it’s being punished by Google for standing up to it. Whatever the case, it’s yet another mess caused by Google’s power.

Of course, it’s worth pointing out that it’s entirely possible to become totally dominant in a market through simply being better than anyone else. But it’s also worth saying that being investigated by a regulator doesn’t mean the same as being found guilty by them. When it comes to government regulators getting involved in technology businesses, though, the question is not whether it’s possible to control a market — it is whether it’s healthy. And that is less obvious, and therefore why an investigation on both sides of the Atlantic may be necessary.

16 Responses to “Google, this is why you’re under investigation”

  1. It’s funny how a company with the motto “don’t be evil,” can get so constantly lashed by paranoid bloggers who have no evidence to support anything.

  2. Code Monkey

    Kudos to Google. That’s EXACTLY what I would have done if some jackass company tried to extort money from me through the courts. Drop them like a hot potato. The only thing I would have done differently, is that I wouldn’t have told them I was doing it. Just let them find out on their own that they’re no longer showing up in search results.

  3. Steven

    I expected better from a tech site.
    1. A monopoly is not defined as a powerful company. It’s defined by a market that only has one option for whatever good or service is being offered. That’s not the case here.
    1a. Google isn’t a monopoly. Want to search somewhere else? Go for it. There are tons of competitors, some playing in the same field as Google and others playing in niche markets to try and differentiate themselves. There’s no lock-in with Google. People can search wherever they please and they’re choosing to use Google.
    2. Anti-trust is not defined as a monopoly, it’s defined as a use of monopoly power to unfairly play in the market and to limit competition. That’s not the case here.
    3. The Belgians sued Google to get Google to remove them from their results. Google was ordered by the court to remove all Copiepresse stories from, and I quote, “all” their pages or face fines of 25000 euro per article per day. All is a fairly well understood word. Except apparently by those who wish to misunderstand it to their benefit.

    What happened here is not that Copiepresse wanted to really be delisted from all of Google, they wanted to be paid for graciously allowing Google to send web traffic and therefore money in the direction of Copiepresse. That’s not what happened and now they’re crying.

    But lets look at it from a different angle. What did Google have to gain by removing all Copiepresse articles from all their results? Nothing. What do they have to gain by putting them back? Nothing. Hard to see an incentive for Google to be manipulating anything here at all.

    Copiepresse = Sore Winner

  4. I’m not a laywer and I don’t disagree with the general conclusion of the article, but when reading the judgment in question, Google’s interpretation seems to be the correct one. The judge was very broad and non-specific in ordering information to be removed from Google’s servers. It’s not obvious at all that they are allowed to keep the data on the regular search engine. With a 25000 euro/day for non-compliance, it’s not unreasonable for Google to err on the side of caution.

  5. EntrepreNerd

    This is yet another case of a newspaper trying to get more money by doing less, from a company that has more because they do more.

    I will never understand the logic behind this. Why would Copiepresse expect Google to pay them for the pleasure of sending traffic to Copiepresse’s website, where they make money from advertising? This is nothing more than a double dipping money grab that back fired, and I am glad to see it did.

    No single news source is so important, or has content that is so exclusive, that the absence of said resource will damage the usefulness of Google News.

    This is the internet age. Anyone can post a reiterated news article, even those trapped behind a pay wall, by simply crediting and linking the source. Hell, that is all does, and they do just fine. That being said, I do not think Lifehacker would be harmed if a handful of their sources went away. There will always be someone there to fill the need for original content, and there will always be others willing to link to it.

  6. Jack C

    Really? Traditional search dominance in a few markets and news aggregation?

    As this very blog has pointed out on numerous occasions, the value of both the social web and mobile apps are dramatically reducing the importance of search via traditional means. You can’t have it both ways.

    As to the second issue of news aggregation disputes, do I really need to point out why that is a lousy rationale for anti-trust claims?

    There are undoubtedly some really interesting issues to explore on this topic, but the ones outlined really don’t get us beyond the exceptionally tired, “does evil” vs “do no evil” trolling.

  7. Darius M

    I’m sorry, but this article should have had some better examples to show how Google is evil. Having a lot of market share does not really make a company evil. Also, the Copiepresse was a bad example. Google did the rational thing in that situation and Copiepresse came back begging to be listed on Google afterwards.

  8. This article is seriously lacking in substance. This is all it takes to get published on Gigaom? Sign me up!

    I never understood news organizations’ complaints against appearing on Google News. Last I checked, Google News does not publish the entire article from any news site. It just publishes the headline and the top couple of lines. Doesn’t that actually provide more visibility to their articles and ensure that people visit their sites? Why would they not want this? Anything I am missing here?

  9. So what illegal means did Google employ to get 92% market share in the UK? What could they do to see that people use their competitors more often? Start charging people to use their site?

    Newspapers don’t want google to index their stories, yet all they have to do is include simple code on each page to instruct Google not to include it in their searches or news listings. But they are not happy with that, and they want Google to block their site from the news listing, but not from the search engine. This would most likely require Google to deploy additional servers to keep them happy, as it is likely they use the output of their search engine as an input to their news aggregator.

    • Ken, I think you misunderstand what competition law is all about. A company can acquire a dominant market share (in the EU, this can be as low as 45% or so) perfectly legally, and still end up falling foul of the law.

      The law is designed to prevent any single company with a dominant market position acting in ways which are anti-competitive. It makes no judgement about how that dominant position was acquired.

      • Ian, so please answer my second question. They give free access to their site, and they effectively let advertisers determine the price of ads. How are they supposed to reduce their market share if people don’t want to use competing sites? Should they slow down their servers? Give less accurate results? If they raised their prices, they would get even more complaints. What does the EU specifically want them to do to reduce their market share? In what ways are they anti-competitive?

      • How about Google letting Android licensees build their own app markets without threatening to delay certifications of their handsets?

        Or letting app developers sell through third-party app markets without being threatened with burial in Android Market?

        Or respecting Copiepress and European courts in the case mentioned above?

        I trust Google much more than I trust others, but power does breed arrogance, and arrogance breeds mistreatment of others.