Google’s antitrust settlement under attack by rivals
May 13, 2013 8:59 pm
By Richard Waters in San Francisco and Alex Barker in
Brussels
Google’s rivals have called its proposed antitrust
settlement with Brussels too weak to redress the imbalance in the internet
search market – and warned it is likely to have the opposite effect,
discouraging users from visiting rival sites.
The deal, intended to make Google list more competitors’
services, contains loopholes that will undermine its impact, some opponents of
the US search company say.
Their critiques are the first in-depth responses to the
provisional deal the US company struck with Joaquín Almunia, EU competition
commissioner, this year.
Mr Almunia will have to decide next month whether to try
to force Google to make more concessions to head off a possible formal
complaint, following the end of a “market testing” period for the draft
remedies agreed so far.
Attention has focused in particular on provisions
designed to reduce the risk that Google is unfairly steering users to its own
specialised, or “vertical”, services – such as maps, shopping and travel
listings – robbing others of traffic.
In some circumstances, Google has agreed to include links
to rival sites in the panels at the top of its search results pages, which
currently display links to its own services. However, where these panels show
results that advertisers have paid to have included – as happens with Google’s
shopping service – rivals will also have to pay to be included among the new
links.
These paid links are “a potentially catastrophic
escalation of Google’s abuse, providing a new and immensely powerful
anti-competitive tool, which in many cases would hand Google the majority of
its rivals’ profits,” according to Foundem, a UK shopping comparison company
that has been one of the most vociferous critics of the deal.
This provision will encourage Google to convert more of
its services to paid listings, Foundem says.
Another rival, which declined to be named, attacked the
concession as producing “orphan links” that would be too small and lacking in
detail to attract much traffic.
Several critics also said there were flaws in the auction
through which Google was proposing to sell the links. Unlike its regular search
advertising service, companies will have to submit a single bid regardless of
whether their link appears against searches for high-value items or less
expensive ones.
In addition, the auction will not permit the dynamic
pricing that allows regular Google advertisers to adjust their bids based on
results, instead forcing them to submit a single bid that will apply for up to
four weeks at a time.
Among the loopholes identified by rivals is a failure to
address future changes in Google’s search service, such as a potential shift to
voice-activated search on mobile devices. The settlement only covers searches
done through the “Google general search box”, or “input field”.
“We will look carefully at the comments and information
received through the market test,” a spokesperson for the commission said.
Copyright The Financial Times Limited 2013.
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