European Commission investigates Google’s search rankings

The European Commission has launched a preliminary inquiry into Google’s dominance of the online search market.

The investigation is expected to focus on complaints that the internet giant penalises competitors in online search rankings.

The Commission has sent out formal questionnaires to three companies who made the allegations against Google – the British price comparison site Foundem, French legal search engine eJustice and Microsoft-owned shopping site Ciao.

The complaints suggest that Google demotes competing websites to a lower-ranking on users’ search results.  The companies involved are also keen for the Commission to investigate the terms and conditions attached to Google’s advertising deals.

Google has consistently argued that it does not deliberately discriminate against individual companies or sites but that its search engine produces results based on quality, with sites that simply take content from other sources faring poorly.

Google currently has an 80% share of the European search market, as well as 65% of the US market, according to comScore.

The Commission could impose a substantial financial penalty on Google if the allegations prove to be true, as it has done with other market leaders in the past, such as Microsoft and Intel.

However, in a blog post, Google didn’t sound alarmed: “This kind of scrutiny goes with the territory when you are a large company.”

“We are confident that our business operates in the interests of users and partners, as well as in line with European competition law,” Google added.

The search giant also hinted that the allegations had been deliberately composed by Microsoft, which owns one company and has links with another company involved.  Microsoft recently merged its search operation with Yahoo! in a bid to counterbalance Google’s strength.

However, Google has faced a lot of criticism in recent weeks over many aspects of its business, including its market share, its plans to digitise content from books, whether YouTube is an invasion of privacy, newspaper content on Google News, as well as the company’s 80% share of the mobile phone search market.

Vodafone’s chief executive Vittorio Colao is just one of the people calling for a European investigation. “The fact that 80% of the advertising online goes down one funnel is something that should be looked at in the future debate on net neutrality.”