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EU antitrust probe fishes for Google secrets

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Internet Security Threat Report 2014

The EU Competition Commission has shown it means business in its probe into Google by issuing a hard-hitting and wide-ranging set of confidential questions for customers, rivals and clients of the Californian web giant.

The Commission has sent out three sets of questionnaries: to advertisers, to vertical search companies, and to publishers. We obtained one of the sets of questions, and they give a snapshot into the EU's thinking – and areas of contention.

The Commission revealed it was launching an antitrust probe into whether the Californian online giant had abused its dominant position in paid search advertising six weeks ago. Google enjoys a monopoly position in web searches, which gives it a market dominance of the paid search advertising market in most parts of the world (Russia and China are exceptions). And this is a substantial business; paid search accounts for almost half (48.9 per cent) of all the global online advertising market. Google UK's operation now earns more advertising revenue than ITV and Channel 4 combined. We explored the probe, in context, here.

One set of Commission questions asks vertical search companies, who operate specialist search services, if Google's own vertical search services impact their business. Google is able to cross-promote services such as YouTube, Google Maps, Google Shopping and Google Books from its horizontal search pages, in which it has a monopolist's share of the market. It asks for evidence of "differences of your ranking across different search engines" across Google, Bing and Yahoo! – and in particular, any sudden changes in traffic resulting from horizontal search engines rankings.

The Commission asks:

Is your company aware of the existence of features in Google's natural search ranking algorithm which in your view might penalise the ranking or display of your vertical search website pages a) as compared to competing, non–Google owned, vertical search engines; b) as compared to competing, Google owned, vertical search engines; or c) as compared to other websites which would be responding to the same type of user queries?

The Commission is accepting up to six years' worth of traffic data and back contracts with Google from interested parties.

It also asks for hypothetical business impacts – for example if Google lowered the priority of links to vertical search service providers by three places.

One eyebrow-raising price hike took place in the economic meltdown of autumn 2008, as Google saw clicks rise 18 per cent and revenues leap 31 per cent. Google denied that it had instituted a price increase.

One wrinkle is that it is impossible to tell what the market value of a search term is, at any moment. Google claims to be the truest reflection of this, but in truth each company operates a "black box" pseudo-market – they insist on describing them as auctions – and each search engine forbids arbitrage. You must trust them. Or not.

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