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EU Antitrust Chief: Google "Diverting Traffic" & Will Be Forced To Change 329

Dupple writes "It looks like the EU is coming close to a decision regarding its investigation of Google. While saying he's 'still investigating,' the head of the European Union's antitrust regulatory body has said that he's convinced Google is 'diverting traffic' and that it will be forced to change its results. From the article: 'Despite the U.S. Federal Trade Commission's move earlier this month to let off Google with a slap on the wrist -- albeit, a change to its business practices, a move that financially wouldn't dent Google in the short term but something any company would seek to avoid -- the European Commission is looking to take a somewhat different approach: take its time, and then hit the company hard.'"
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EU Antitrust Chief: Google "Diverting Traffic" & Will Be Forced To Change

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  • by FireFury03 ( 653718 ) <> on Friday January 11, 2013 @04:33AM (#42555649) Homepage

    What the hell do they mean by "diverting traffic", and why would it not be allowed?

    It looks like they're talking about doing stuff like including results from Google Maps in your web search results (whilst not doing the same for results from Bing Maps, etc.).

    What, exactly, does Google have a monopoly of, and how are they abusing monopoly power in any way?

    They are the dominant search engine, and the EU appears to be deciding that they are using that dominance to help gain dominance in other markets (e.g. the aforementioned maps, amoungst others).

    TFA suggests they have a monopoly on "search" which is nonsensical, since there are many competitors

    They are the dominant search engine. I think you are misunderstanding antitrust legislation:
    - Antitrust legislation doesn't care whether or not you have competitors, it only cares whether you are the *dominant* vendor. As a well known example, Microsoft was found guilty of antitrust violations in their operating system business, but there have always been other operating system vendors. The key was that they were the *dominant* vendor.
    - Antitrust legislation doesn't say there's anything wrong with being the dominant vendor (or even the only vendor). All it says is that if you are dominating the market, you're nor allowed to use that dominance to help you gain dominance in other markets. So going back to the Microsoft example, they were dominant OS vendors, and by shipping certain freebies with the OS (e.g. a web browser) they were unfairly using their existing position to gain dominance in the browser market. Netscape, on the other hand, could never have hoped to do this since they weren't shipping anything which already dominated the market, with which to bundle their browser to compete. The EU is saying Google is using their dominance in the search engine market to push their other products in a way that is unfair to their competition.

    and no barrier to entry

    There's always a barrier to entry - setting up a search engine is going to involve R&D and then a hell of a lot of time and bandwidth to spider the web. However, that isn't what this is about - this isn't about Google doing anything to stop people competing in the search engine business, this is about using their existing search engine position to make it harder for people to compete in other sectors.

    and they give the "product" away for free, so it would hard to claim any monopoly pricing power is even being used or existing.

    No one said anything about pricing. It isn't relevant to this discussion.

    So, all in all, it looks like either a blatant cash grab by the EU, or a bullshit legal attack funded by the likes of Microsoft.

    Or the EU is trying to level the playing field for the smaller businesses. Whilst having everything run by a single megacorp is convenient, historically it has always been better for the consumer in the long run to have many smaller businesses offering services. The EU usually takes the attitude that a bit of short term pain (inconveniencing people by preventing the "convenient" integration of services from a single vendor) is better than the long term pain of having a single megacorp in control of huge markets and no chance for a smaller business to survive.

  • by Grayhand ( 2610049 ) on Friday January 11, 2013 @04:54AM (#42555729)
    I'm into Heirloom fruit and vegetable seeds. After the first of the year I noticed a shocking change in search results. Most heirloom seed companies will give you a list of a list of one to four dozen results for things like bean seeds, Some sites are two to four times that. Some heirloom seed companies are over a hundred years old and most are over a decade old. These are people that grow their own seed and know the subject. Since the first of the year I find the first few pages of search results are what I call scam sites. These are businesses that buy in bulk and sell to yuppies. A year ago the first two pages were virtually all legit sources with maybe one company that bulk sells in the results. Companies that had been in business since the 1800s were showing up on page two or three of the search results. Basically the scam sites were paying a bundle to show up on the first few pages in the search results. I panicked and emailed myself my bookmarks so I could find my favorite websites no matter what happened. Heirloom seeds have become a profitable business so only the ones willing and able to pay the Google search tax even show up on the search results. You may have had a million web hits last year but this year you are five pages in because some start up paid Google to front their site. As a Google user I'm furious and considering any and all options but most of the sheep will simply use the sites willing to pay the blood money to Google. The web is rapidly becoming a place where corporate scam sites are the norm and anyone expecting more is a fool! Just sad to see search engines reduced to advertising and little more.
  • by Anonymous Coward on Friday January 11, 2013 @05:18AM (#42555807)

    No Country Redirect:

  • by Anonymous Coward on Friday January 11, 2013 @06:30AM (#42556037)

    Once again I am pointing out a Troll that got moderated to +5 Insightful:

    Poster said:

    nonsensical allegations

    Both the European Union and Google's own American Government said that they were breaking the law. I take it these super powers have lawyers, economists and stuff like that making arguments based on international law and trade agreements. NOWHERE, and I mean no where in your post do you point out what is a "nonsensical allegation". You don't cite any law, any United Nations charter, any trade agreement, you don't even cite a verse from the Bible (which I was half expecting from you).

    Poster said:

    What, exactly, does Google have a monopoly of, and how are they abusing monopoly power in any way?

    You use the word "monopoly" throughout your post. In fact your entire post is based on YOUR claim that these unfair, greedy Europeans want to make money off of Google because it is a "monopoly". Unfortunately for people who are interested in the TRUTH, the source article by ZDnet does not mention anything about a monopoly or anti-monopoly legislation. So your whole argument is based on a lie and yet you get up-moderated to +5 (I'm hoping and expecting this will change as newer Moderators see through your Bullshit... as is often the case).

    Just out of Interest the comments on ZDnet are highly biased against the EU as well. I get the feeling that most Americans feel that if some negative judgment is made against one of their Corporate status symbols, that this is somehow anti-American, and the result of people who are obviously more stupid than Americans. I will give examples:

    The EC should shut up...
    and follow the American leadership


    ... and Google should being immediately blocking all EU IP's from accessing their system.


    Why is Almunia talking to the press like this ? Abuse of Power or did promises of a large amount of money loosen his lips?


    The EU will use whatever tactics they believe will extract funds form internet companies. If they can't manage to tax them they will fine them to get the money.

      Oh yes, unfortunately I see the same type of people posting the same types of arguments on Slashdot as well. Too bad.

    Unlike the parent poster (who got moderated to +5 Insightful!), I will supply you with a reference to my evidence:

  • by FireFury03 ( 653718 ) <> on Friday January 11, 2013 @07:23AM (#42556197) Homepage

    It looks like they're talking about doing stuff like including results from Google Maps in your web search results (whilst not doing the same for results from Bing Maps, etc.).

    This is not an antitrust violation. It's normal business practice for every search engine.

    Firstly I'm not saying it is an antitrust violation (IANAL and don't have any particularly strong opinions either way anyway), I'm just explaining what the EU appears to be saying.

    However, I'm not convinced that you can say its completely innocent behaviour either. A search engine is supposed to find the most relevant results for what a user is searching for. Google is intentionally adding in results relating only to their own services, even though similar services exist from other companies. Using the maps example, if I search for a business then I'll get:
    1. that business's home page on the web
    2. people talking about that business on the web
    3. a link to google maps showing me where the business is
    In the case of (3), Google has intentionally included a link to a relevant page on a separate service that they also own. They haven't provided a similar link to other map services, such as Bing, Openstreetmap, etc. Whether this is right or wrong is debatable, but it is clear that they are using their search engine to promote their own maps service over their competitors', and this search result appears amoungst all the normal results, not as a "paid advertisement" (which is what happens to all the other artificially promoted responses).

    And yes, you can say that other search engines do the same, but the point is that other search engines aren't in the same dominant position and therefore antitrust legislation doesn't apply to them. This is the same as pointing at things Microsoft isn't allowed to do and saying "well Apple/Ubuntu/Fedora does them" - dominant companies have to play by different rules to everyone else in order to keep the playing field more level.

    You're misusing the Microsoft example. Microsoft wasn't just the dominant vendor, they were actively engaged in anti-competitive practices. At the time they got slapped with antitrust fines you could not buy a computer without windows. It wasn't possible. Any computer you purchased from a store came with their system preinstalled.

    This is untrue. You have *always* been able to buy computers without Windows. There have been several antitrust cases against Microsoft; the one you seem to be referring to was where MS were pressuring OEMs to only supply machines preinstalled with windows by offering them substantial discounts for doing so. There were ways the vendors used to get around this, and so you could still buy machines without Windows, but it was more difficult to do so than it should have been.

    More recently, there was an antitrust case against Microsoft because they shipped IE with the OS by default, in a way that prevented the OEMs from removing it and replacing it with a competing browser. The EU decided that this was unfair since MS were using their dominant position in the OS market to push their browser in detriment to other browser vendors. This is very similar to what the EU is suggesting that google is doing - using their dominance in the search engine market to bundle other products at the detriment to their competitors.

    This is quite the opposite from someone firing up their computer and oh look Internet Explorer is the default browser and Bing is the default search engine and the end user is forced to make an informed choice.

    In your example, someone made a choice to buy a Windows machine and found that IE and Bing were bundled by defaults. So long as they stick with Windows, they have to go out of their way to use a different vendor's browser or search engine.

    Similarly, someone made a choice to use Google and found that Google Maps, etc. were bundled into the search results by defau

  • Web search was what they did for a while.

    The goal always has been, and will be, showing ads and getting companies to pay them to show ads.

    Everything else follows from that. The search is not the product, the eyeball using the search is.

    This is actually precisely backwards from how Google employees and the company leadership -- all the way up to the CEO -- see it.

    Google started as an idea for searching the web, implemented on donated and scrounged hardware in a dorm room and using the university's Internet connection. Eventually traffic rose to a point where it was causing problems for Stanford, so it had to move out, which meant it had to find a way to fund itself. The founders were opposed to using advertising as the revenue source, but couldn't find anything else workable. Even then they didn't find advertising acceptable until they realized that advertising can be useful to the user, if it's relevant and not obnoxious.

    That attitude is still what drives Google. The goal is all of the products that users use. When new ideas come up, the first question is whether or not it's cool and will improve peoples' lives. Whether or not there's a way to monetize it comes up much later. Of course, if there isn't a way for it to be profitable Google probably won't do it, because the bills have to be paid, but generally any product that's sufficiently useful to a sufficiently large number of people will have some way of paying for itself and generating a profit. Advertising is a monetization approach that works for many products, doesn't create a large barrier to usage, and often creates revenues that grow naturally alongside usage (and therefore cost), so it's widely used.

    The point, though, is that products are the goal, and advertising is (usually) the means.

    (Disclaimer: I work for Google, but not as a spokesperson. The above reflects my view of the company's motivations from my perspective inside the company, but is not any sort of an official position.)

  • by MacGyver2210 ( 1053110 ) on Friday January 11, 2013 @10:59AM (#42557531)

    I don't know about other languages and countries, but in the US we have this little "Sponsored Results" label. Barring some large shift in English vocabulary, "Sponsored" is quite equivalent to "Bought and Paid For".

    It also hasn't been illegal to have paid-for results top your search: as a search engine their algorithm and results sorting, etc, are all proprietary. They can keep them as black-box as they like, and as long as the product functions as they want it to, they aren't doing anything wrong. It is THEIR BUSINESS, and is not up for some money-grubbing politicians to cry foul about ad revenue 10 years after the fact.

    So sick of software patents, EU regulation nonsense, China vs Japan, Fiscal Cliffs, Republicans, China vs US, all this crap. Someone start a war against aliens or robots or something, so we can act like one large compassionate human population for a change. It works in the movies....aww, who am I kidding.

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