EU regulators against Google about unfair competition

Foundem and Ejustice.fr complain that Google downplays their sites in its search results, Google said. Ciao From Bing, which has been a partner of Google’s AdSense service, was acquired by Microsoft in 2008. That company’s complaint relates to Google’s terms and conditions, Google said.

“Antitrust authorities tend to maintain the option of looking into something and then dropping it later,” said John Eastwood, a partner at Taipei-based international law firm Eiger Law who’s not familiar with the Google case.

E-mail messages sent after hours to Ciao, Ejustice.fr and Foundem weren’t immediately returned. Ciao originally took its complaint to Germany’s antitrust agency and the case was transferred to the European Commission, Google said.

‘Fact Finding’

“At this stage this is a fact-finding exercise and we’re happy to answer the commission’s questions,” Mountain View, California-based Google said in an e-mailed statement. “We are happy to explain our products and technology, and are very confident that our business operates in the interests of users and partners, as well as within European competition law.”

Google’s AdSense program, which has worked with Ciao, helps Web sites sell space to advertisers. Google received complaints about its business practices from Ciao after it was acquired by Microsoft, Google said. Microsoft bought Munich-based Ciao’s parent, Greenfield Online Inc.

Jack Evans, a U.S. spokesman for Redmond, Washington-based Microsoft, said he hadn’t been notified by the commission.

“We do believe it’s natural for competition officials to look at online advertising given how important it is to the development of the Internet and the dominance of one player,” he said.

Google fell $7.73, or 1.4 percent, to $535.07 yesterday in Nasdaq Stock Market trading. The shares have dropped 14 percent this year. Microsoft, down 7.1 percent this year, declined 40 cents, or 1.4 percent, to $28.33 yesterday.

‘Listen Carefully’

“Though each case raises slightly different issues, the question they ultimately pose is whether Google is doing anything to choke off competition or hurt our users and partners. This is not the case,” Julia Holtz, senior competition counsel for Google, said on the blog. “We always try to listen carefully if someone has a real concern and we work hard to put our users’ interests first and to compete fair and square in the market.”

Google reported three antitrust complaints in Germany last month. Those complaints were filed by Microsoft, two German publishers’ associations and Euro-Cities AG, a map service.

The publishers claimed that Google doesn’t pay for “snippets” of news items it displays on its Google News site, Google spokesman Kay Oberbeck said last month. Microsoft, meanwhile, alleged that a contract with Google on advertising violates competition rules. Euro-Cities claimed Google wrongly displays Google maps for free, preventing competition, Oberbeck said.

Microsoft continues to cooperate with the German government’s investigation into those complaints, Evans said.

Market Share

Google dominates the search-engine market, though Microsoft’s Bing has made gains in the U.S. in the past eight months. Google controlled 65.4 percent of the market in January, according to Reston, Virginia-based ComScore Inc. Yahoo! Inc. ranked second with 17 percent, and Bing was third with 11.3 percent. [BusinessWeek]

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