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Analysis Google says it hides the inner workings of its search engine because it doesn't want websites and advertisers gaming the thing. But what's to stop Google from gaming its own search engine?

That's the issue at the heart of the European Commission's investigation into Google's search and ad practices, formally announced Tuesday morning, and it's a question that extends well beyond the three small outfits that complained to the EU.

Google, you see, is not just a search engine. It's a multi-billion–dollar company that offers countless other internet services involving everything from news search and image search to video hosting, maps, finance, and even price-comparison shopping. And Google's search engine is, well, not just a search engine. Now controlling as much as 85 per cent of the search market, this de facto internet gateway is also a place where Google can deliver its own services to netizens across the globe. YouTube, Google Maps, Google Product Search, and any other Google service — as well as any service Google might build in future years — all have an obvious advantage over competitors.

This is particularly obvious when you consider Google's so-called Universal Search, where Google inserts links from its own services into prominent positions on its search-result pages. But the advantage extends across the length and breadth of the company's search engine, as Google — and Google alone —– has complete insight into how this internet gateway operates. Competing services are largely in the dark.

In its complaint to the European Union — filed in February 2010 —– UK-based price-comparison outfit Foundem accuses Google of "exploiting its dominance of search in ways that stifle innovation, suppress competition, and erode consumer choice." The complaint makes two arguments. It alleges that Google used "discriminatory penalties" to remove certain sites from its organic search results regardless of relevance, and it claims that Universal Search is transforming Google's search engine into an "immensely powerful marketing channel" for its own services.

Speaking with The Register this spring, Foundem founder and CEO Shivaun Raff summed up the complaint: "You have an overwhelmingly dominant search engine. If you add to that that search engine's ability to apply discriminatory penalties — they're discriminatory because some services are manually rendered immune through white lists — and you add the ability of that search engine to preferentially insert its own services at or near the top of the search results, all of that adds up to an unparalleled and unassailable competitive advantage."

Foundem, Raff says, has felt this firsthand. In 2006, algorithmic changes effectively removed Foundem from Google's organic search results and all but prevented the company from purchasing ad placement via Google AdWords. The company spent more than three years fighting for a return to Google's search engine, and it wasn't until Foundem took its story public — but before the EU complaint — that Google agreed to do so. In the meantime, Google introduced Universal Search, and according to Foundem, Mountain View has used the setup to boost its own price comparison service, Google Product Search, to the top of the market.

Google Product Search statistics

Google's ranking of leading UK price-comparison sites across a broad sample of product- and price-comparison–related search terms, as of 29 January 2010. Google Product Search results are shown in red. Other price comparison service results are shown in shades of green (source: Foundem)

Two other vertical-search outfits filed complaints with the EU: Ciao, now owned by Microsoft, and the France-based ejustice.fr. But Foundem is the complainant to go completely public with its story, and the meat of the EU's formal investigation looks to address Foundem's claims: "The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services which are specialised in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services," reads Tuesday's statement from the European Commission.

Foundem has called on the EU to prevent Google from ever discriminating in favor of its own services and to ensure that when Google does displays links from its own services, they're clearly labelled as such. Its complaint also says that Google and other search engines should be more transparent about discriminatory penalties and provide a formal appeals process so that "errors" in results-placement can be quickly addressed.

Which is only reasonable.

The company does not want Google to expose its search and ad algorithms. Foundem realizes that such a move would allow sites to game the system. "We've never argued with the need for penalties. You need to have penalties because spam masquerades as original content. You need some way of removing it. This is a necessary part of any search engine process," Foundem CTO and founder Adam Raff told The Register following the European Commission's announcement. "What is completely unacceptable is when, with such penalties in place, the rationale behind those penalties [is not provided] and there's no mechanism for appeal."

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