Monday, May 21, 2012

Google Ordered to Mend Its Ways

Photo: siliconbeachtraining.co.uk
(CNNMoney.com) - By David Goldman - In a scolding letter sent to Google on Monday, European regulators outlined their "concerns" about Google's business practices, giving the search giant "a matter of weeks" to shape up or pay up.


The European Commission said it had reached preliminary conclusions based on its 18-month antitrust investigation of Google. It found four ways in which Google potentially violates anti-monopoly laws in the region.
Google (GOOG, Fortune 500) displays links to its own "vertical search services" differently than it does for links to competitors, the letter said. The commission said it is concerned that Google may be giving its own services preferential treatment over rivals'.
Though the letter did not outline specifics, such Google services include local reviews, shopping listings and flight schedules among others, which sometimes compete with companies like Yelp (YELP), Amazon (AMZN, Fortune 500), Priceline (PCLN) and Expedia (EXPE).
The commission also said it is concerned with how Google scrapes content from the Internet to post within some of its own search verticals, including reviews from across the Web. Though it's a common practice among search engines, the commission is worried that it may harm innovation by "appropriating the benefits of the investments of competitors."
The third and fourth issues focus on Google's advertising business.
The commission found that Google enters into quasi-exclusivity agreements with partner sites that display Google advertising, which could hinder competition. The letter also said that Google makes it difficult for AdWords customers to port their ad campaigns to rival services, such as those from chief competitors Yahoo (YHOO, Fortune 500), AOL (AOL) and Microsoft (MSFT, Fortune 500).