Bloomberg News

Google Sued Over Searches as European Probes Advance

April 11, 2013

Google Inc. (GOOG:US), operator of the world’s largest search engine, was sued in London by a U.K. Internet company for promoting its own maps over those of competitors in what it claimed was “Google’s cynical manipulation of search results.”

Streetmap, a provider of Internet maps, filed a complaint in London March 15, according to court records. Google’s actions have made its products “harder to find,” the U.K.-based company alleged yesterday in a statement. It’s at least the second such lawsuit filed against Google since June.

Streetmap said its complaint mirrors an antitrust probe by the European Union into whether Google favors its own services over competitors in search results.

“We have had to take this action in an effort to protect our business and attract attention to those that, like us, have started their own technology businesses, only to find them damaged by Google’s cynical manipulation of search results,” Kate Sutton, commercial director of Streetmap, said in the statement.

Google has submitted an offer to the EU that will soon be shown to rivals and customers as part of settlement talks to end the probe into claims its search results discriminate competitors. EU Competition Commissioner Joaquin Almunia told reporters in Washington today its goal is to “secure legally binding commitments” from Mountain View, California-based Google as part of the settlement negotiations.

Search Choice

“To avoid abuse we need to guarantee that users of the search engine have a choice and that search results have the highest possible quality,” Almunia said.

Tom Price, a spokesman for Google, declined to comment today on the allegations, saying in an e-mailed statement that he hadn’t seen the Streetmap complaint.

The company also faces accelerating EU probes by privacy regulators.

In June, Google was sued in London by a U.K. Internet company that previously filed a complaint with EU regulators, sparking the antitrust probe.

Foundem, a U.K. shopping comparison website, sought damages for revenue lost as a result of Google’s “anti-competitive conduct,” lawyers for Foundem said in court documents.

Foundem said in the lawsuit that it had been unfairly penalized by Google because it offers a competing shopping comparison search service. It lost web traffic as a result of being pushed down in Google’s search rankings.

Price, the Google spokesman, declined to comment on the suit when it was made public in January.

Microsoft, TripAdvisor

Almunia has sought a deal with Google to end the antitrust probe without imposing fines, while competitors such as Microsoft Corp. (MSFT:US) and TripAdvisor Inc. (TRIP:US) have tried to pressure regulators to force Google to change its business practices.

Google at the end of January submitted an initial offer to settle the antitrust probe after Almunia asked it to address allegations that it promotes its own specialist search-services, copies rivals’ travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry.

Almunia said he wants to resolve the Google probe by the end of the year and won’t make a decision on whether the proposals are acceptable until he’s had them market tested.

The U.S. government ended an investigation into Google in January, saying there was no evidence the company’s actions harmed consumers.

Al Verney, a Brussels-based spokesman for Google, said the company is working with the European Commission.

EU Probe

The EU in 2010 began investigating claims Google discriminated against other services in its search results and stopped some websites from accepting competitors’ ads after receiving complaints from Microsoft and others.

While Redmond, Washington-based Microsoft and partner Yahoo! Inc. (YHOO:US) have about a quarter of the U.S. Web-search market, Google has almost 95 percent of the traffic in Europe, Microsoft said in a blog post in 2011, citing data from regulators.

Internet traffic can be diverted by manipulating the order of search results, said Susan Athey, a professor of economics at Stanford University’s Graduate School of Business and a Microsoft consultant, in a blog post on Microsoft’s website last month.

Site Moves

When a site is moved from the first position to the 10th position in a series of search results, it typically will lose about 85 percent of its traffic, she said.

“Impartiality of search results will become all the more important in the years to come, given that screen sizes on smartphones and tablets are smaller than on traditional PCs,” Athey said.

“Smaller screens mean there is even less room for competing services to appear in Google’s mobile search,” she said.

Google faces possible fines on another front in Europe, after six European Union data protection regulators started “coordinated” enforcement measures over the company’s failure to fix flaws in a new privacy policy.

A joint decision April 2 followed a deadlock at a March 19 meeting between Google and the data watchdogs, France’s National Commission for Computing and Civil Liberties said in a statement on its website. It’s now up to national regulators to pursue the company according to their own rules and powers, CNIL said.

Privacy Investigations

Google faces privacy investigations by authorities around the world as it debuts new services and steps up competition with Facebook Inc. for users and advertisers.

Google last year changed its system to create a uniform set of policies for more than 60 products, unleashing criticism from regulators and consumer advocates concerned it isn’t protecting data it collects.

“Our privacy policy respects European law,” Verney, the spokesman for Google, has said. “We have engaged fully with the data protection authorities involved throughout this process, and we’ll continue to do so going forward.”

The U.K.’s privacy watchdog said in a separate statement it started an “investigation into whether Google’s revised March 2012 privacy policy is compliant with the Data Protection Act.”

The case is Streetmap.eu Ltd. v. Google Inc., case no 13-1013, High Court of Justice, Chancery Division.

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • GOOG
    (Google Inc)
    • $537.5 USD
    • 2.67
    • 0.5%
  • MSFT
    (Microsoft Corp)
    • $47.98 USD
    • -0.72
    • -1.5%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus