EU-Google “Rival Links” Antitrust Settlement Provision Creates New Controversy

The US Federal Trade Commission declined to address the alleged “search bias” (vertical search) claim against Google in its settlement with the company earlier this year. It’s a highly problematic issue from a legal standpoint but it’s the one Google’s critics and rivals care most about.

In short they would like to blunt or stop Google’s ability to place its own content (e.g., Maps, Travel, Shopping) at or near the top of search results (Universal Search).

Google’s display of structured content at the top of search results is diverting or siphoning off “their” traffic, they argue. European Commission Competition Commissioner Joaquín Almunia apparently agreed in a January Financial Times interview:

“We are still investigating, but my conviction is [Google] are diverting traffic,” Mr. Almunia told the Financial Times, referring to Google’s preferential treatment of its own vertical search services.

This is the principal area of legal and philosophical divergence between the European and US antitrust settlements.

To address this alleged “search bias” Google and the EU carefully worked out a deal that requires Google “to display links to three rival specialised search services close to its own services, in a place that is clearly visible to users.” Effectively Google will be displaying three links to rival services for a given search query.

In an earlier article I provided examples of how this will probably look when it rolls out in Europe exclusively.

Source: Google EU antitrust settlement commitments document

Yet this Solomonic effort to “spit the baby” and make concessions to Google rivals while still allowing Google to largely maintain control over its own search results has failed to satisfy Google’s strongest critics and competitors. Indeed it has created new problems and controversy.

Vertical shopping site Foundem, which has directly sued Google in the UK, issued a white paper (.pdf) detailing what it believes to be the myriad deficiencies of the EU-Google settlement proposals. The white paper, which heavily criticizes Google’s Universal Search generally, takes aim at the rival links proposal in particular.

Paraphrasing its major arguments, Foundem says:

• Google unfairly has near total control over what can and cannot be included as a rival link
• The provision creates incentives for Google to “monetize” more verticals so that it can charge competitors for rival links (some rival links will be paid and some “organic”)
• Google will profit from the paid rival links program even as it continues to reap the “traffic diverting” benefits of vertical/universal search
• Google will ultimately gain control over more verticals through the program

The objections to the “rival links” provision in the settlement proposal are a microcosm of the larger antitrust complaints against Google. Google’s rivals are jockeying for visibility in Google results. That drama is now recapitulated in the battle over who gets to be a rival link.

Foundem’s “parade of horribles” is unlikely to fully come to pass if the settlement proposal is adopted. More broadly, however, it illustrates the challenges and problems of EU intervention in the search-results page.

The document below discusses the various settlement comments Google has made and how the rival links program will operate.

Google EU antitrust settlement commitments document

Related Entries

• EU Goes Public With Google Antitrust Proposals, “Market Test” FAQs
• Google’s EU Antitrust Settlement Includes Labeling, Mandatory Competitive Links And Third Party Enforcement
• Google (Finally) Gives EU A Formal Settlement Proposal As UK Mapping Rival Files Anti-Competitive Suit
• After Years Of Anti-Competitive Complaints Foundem Sues Google In UK Court
• FTC Closes Google Antitrust Case: “Law Protects Competition Not Competitors,” Not Enough Evidence To Prove “Search Bias”
• From Praise To Outrage: Reactions To Google’s Antitrust Settlement