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EU antitrust probe fishes for Google secrets

Details of APIs, fees, shenanigans sought..

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Advertisers have large warchests which they must decide where to place, and the choices include online or offline media. A monopoly position means setting the cost of doing business.

The Commission wants to gauge the market impact of price increases of 5 or 10 per cent on online advertising, assuming response rates stay the same. It is also probing whether mobile ads are a competitive market.

Google's dominance of web-search advertising isn't mirrored in mobile advertising, where the market is much more competitive. Google enjoyed the largest share with 21 per cent in 2010, before the launch of Apple's own mobile ad network, iAd, which pipes advertisements into apps created by third party developers. Apple has made rapid inroads into this market at the expense of Google, Microsoft, Yahoo! and Nokia.

Ad networks and traditional media agencies have also been solicited for input.

AdWords customers are asked to disclose fishy business including sudden reductions and unprompted changes in AdWords Quality Score – and invited to forward all subsequent communications between the customer and Google.

"How and how swiftly did Google follow up on your request [to explain and/or change the Quality Score reduction in question]? asks the Commission.

The Commission asks what course of action advertisers take when the CTR (Click Through Rate) declines. It is also curious about any correlation between AdWords quality changes and any changes to the customer's page ranking.

Exiting AdWords?

The Commission's questionnaire devotes considerable time to probing the cost and lock-in of Google's AdWords program. It wants to know how much the AdWords API costs a customer. It is also curious about the ease with which advertisers may port their campaign data from AdWords to a rival – and how easily Google permits that to happen. It wants to hear about any hidden clauses that may prevent rapid switching to a Google rival.

It is a fascinating set of questions – but it indicates how serious the EU Competition Commission is about engaging with a new and poorly understood market. Recipients are invited to submit confidential and non-confidential portions. The results will keep the Competition Unit busy for most of the year. ®

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