Google’s EU antitrust adventure enters new phase as major consumer group joins suit

Google (GOOG)

Remember when Google tried to settle its European antitrust investigation and lots of people thought the four-year drama was over? About that…

With many in the European Commission already unhappy with Competition Commissioner Joaquin Almunia’s keenness to settle, a rather large new spanner has been thrown in the works – the European Consumer Organisation (BEUC) has applied to become a complainant in the case, alongside Microsoft and small vertical search outfits such as Foundem.

BEUC is the umbrella body for all the EU member states’ national consumer groups, which has in recent months been involved in the Google case as an observer. It is a venerable and powerful lobby group, and it is not happy with the settlement proposals that have pleased Almunia, arguing that they will not give consumers truly neutral results.

Prominence is not everything

Specifically, BEUC does not like what Google has proposed regarding the way it displays results that point to its own services (other elements of the antitrust case involve the scraping of content from third-party search services, and the locking-in of Google’s ad clients into its platform).

As BEUC Director General Monique Goyens said in a Monday statement:

“Adequate answers have not been found to the problem of Google stacking its search results as suits itself. Users are given the impression their searches are neutrally decided and this problem is exacerbated in price comparison searches. That is why we are becoming formally involved in this process. European consumers deserve a better outcome, the remedies currently proposed by Google do not meet users’ legitimate expectations.”

So what’s the problem? Let’s remind ourselves of Google’s proposal regarding the prominence of rival services in its search results – along with the fact that Google owns more than 90 percent of the European search market, making it a near-monopoly there.

The original problem was that Google puts its own services very much front-and-center in its results, so for example a search for a product might bring up a prominent box steering the use towards Google Product Search, or a search for a café will bring up a Google Maps box. Under Google’s proposals, that would now be accompanied by suggestions from three rival search services:

Google settlement screenshot 1

Hoorah, you might say. However, BEUC’s issue with this solution is that those three prime spots aren’t neutrally assigned. Instead, they are paid-for and subject to auction, while results for Google’s own in-house services are not.

“Very little will change”

“We were quite reassured by previous promises by the Commission to take into account the consumer interest. What we’ve seen however in the last couple of months with the manoeuvrings towards a settlement is that the consumer interest hasn’t been satisfactorily taken into account,” BEUC spokesman John Phelan told me:

“When you have such clear dominance over the market then you need to provide neutral search results. When people enter search requests, they believe they are getting price comparisons which are fair and neutral. We see there will be three rival services placed in picture form, which gives a semblance of competition, but we feel it not an adequate solution because vertical stacking is able to continue and really very little will change.”

Phelan added that making the coveted three promotional spots subject to auction would actually create a long-term risk that users will only ever find results from the companies with the deepest pockets. As Goyens said in the statement: “This kind of online real estate does not come cheap, so affording Google too much discretion to decide who is a ‘rival service’ is weighted in favour of those with the greatest commercial clout.”

If Almunia was planning to announce a formal settlement anytime soon — which is likely as the Commission elections are coming up later this year — chances are pretty high that those plans have now been scrapped. The man has a lengthy and detailed new complaint to sift through. This ain’t over yet.

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