European and US Authorities Investigate Google

on Oct 15, 2012

Internet giant Google (NASDAQ:GOOG) might soon be in tough negotiations with the US authorities with the Federal Trade Commission (FTC) getting closer to bringing an antitrust case against the company.

**FTC Suspects Google of Search Engine Manipulation**
On 13 October Reuters reported that four FTC commissioners have become convinced Google (NASDAQ:GOOG) has used its dominance over the search market to hurt its competitors. The allegations were brought for discussion by the commission after a number of companies complained about Google’s perceived unfair search engine rankings.

With its financial strength growing, the Internet giant has diversified its business into other areas such as online retailing and smartphones – an action seen by some critics as a motive for Google to use its dominant position in internet search against its rivals.

The comparison shopping website Nextag and consumer review website Yelp have accused the multi-billion company of unfairly giving their websites low quality ranking in search results to steer Internet users away from them and toward Google products that provide similar services.

Being a top search result in the world’s No.1 search engine is key for websites looking to generate large user traffics but an increasing number of companies complain they have to buy more and more ads from Google to improve their visibility.
!m[The Internet Giant Under Suspicion of Antitrust Violation and Privacy Laws Infringement](/uploads/story/572/thumbs/pic1_inline.png)Google’s spokeswoman Niki Fenwick denied any wrongdoing: “We are happy to answer any questions that regulators have about our business.”

The FTC is considering other complaints as well including Google’s refusal to share important data that would allow developers and advertisers to compare the value they get on Google to ad spending on Yahoo or Bing.
According to sources from Reuters, an FTC decision on whether to launch an antitrust case is expected to come in late November or early December. Experts predict that if the commission decides to go after the company there could either be a quick settlement or a lengthy and costly legal battle.

**Legal Hurdles on the Old Continent**
The European Union and France’s National Commission for Computing and Civil Liberties (CNIL) are also looking into the Internet giant on the basis of alleged violations of European law.
Bloomberg reported that this year Google changed its system to create a uniform set of policies for all of its products, giving life to concerns from authorities and regulators about the company’s ability to protect the data it collects.
In January the CNIL began a probe into whether the new policies meet the EU’s standards and to “to clarify the implications of these new rules for Google users.” The preliminary analysis of the French watchdog showed that some requirements have not been met and alerted other European privacy authorities to initiate their own investigations.
Google’s co-founder Larry Page received a letter last week from the information commissioners of all 27 European Union states warning him that the company has breached European law. According to the letter, compensation demands may run into the hundreds of millions of euros. The authorities insist that Google should stop aggregating user’s private data from products such as its Gmail, search engine and YouTube.
The company refused to comment on the letter but said: “We are confident that our privacy notices respect . . . European data protection laws.”