FTC clears Google for monopoly abuse, but will the EU?

GUEST POST: Will Becker is the MD and co-founder of Media Ingenuity, the corporate parent of TotallyMoney.com

Google IceLast week the Federal Trade Commission (FTC) announced that it would not be taking legal action against Google for monopolistic abuses provided that Google changed some of its business practices relating to mobile patents.

Interestingly, it found that Google had not skewed its search results to favour its own ‘vertical search’ products. That seems a strange finding as it is unlikely that the EU’s competition commission will come to the same conclusion at the end of a similar two-year investigation.

Firstly, there’s some decent anecdotal evidence, at least in the UK, that Google’s not averse to pushing the boundaries of biasing results in its favour.  Secondly, by building vertical search capability of its own, and promoting those capabilities in its results in a different way to all other vertical search services, there’s a real danger of consumer detriment.

When Google made a rare acquisition in the UK, paying £37.7 million for minor money comparison site BeatThatQuote.com, the UK financial comparison industry was surprised and understandably worried. Most comparison sites in the UK rely heavily on Google for traffic and nobody wants to compete with Google.

Would Google, with its privileged position to distribute traffic, behave anti-competitively?  My company, TotallyMoney.com, as it happens, doesn’t rely that heavily on Google, but we didn’t believe that Google would abuse its position.  So we were stunned in early 2011 by a brilliant piece of detective work by independent SEO Rishi Lakhani.

It’s relatively technical so here’s a summary: Lakhani observed that Google wasn’t skewing results directly to favour Beatthatquote.com but was skewing what people searched for (a factor in its ranking algorithm) to make more people search for the BeatThatQuote brand alongside ‘car insurance’ and fewer for Gocompare.com with ‘car insurance’.

If confirmed, Google could be pushing BeatThatQuote up its rankings and still say with a straight face to the regulator that it wasn’t changing the rankings in favour of its own subsidiary. Smart, but not smart enough for Lakhani. I wonder what the FTC would have made of it?

Google’s an amazing company. Why shouldn’t we want them to go further and deeper?  Remember, the FTC found that Google was promoting its own vertical search favourably but only in the interests of providing a better search experience.

Well, maybe.  There’s no doubt that Google is squeezing other comparison services out of the search results, at least in the UK – here’s how the results for ‘credit cards’ look today – a prime position for a large format ad for Google’s own card comparison service featuring pictures of leading products that is designed to attract a disproportionate share of traffic.

Isn’t this a better, less disjointed experience than going on to a 3rd party comparison site?  Perhaps more streamlined, but that’s not the same as better. The issue here is that regardless of whether or not it’s a better experience, Google will be in a position to  push its own product anyway.

Most people trust Google to do its usual excellent job of returning the most relevant and most useful result in response to any query… and that’s where there’s a problem. Consumers won’t know that Google is ignoring its usual set of sophisticated signals about the best sites in the case of its own services. In the case of its card comparison service in the UK, for example, it can be argued that it’s not deserving of special promotion.

So consumers could potentially be misled into using a service that’s not as good as those that would have ordinarily ranked above it were it not for Google’s bias… and that doesn’t feel right.

Monty (475 Posts)

Monty Munford has more than 15 years' experience in mobile, digital media, web and journalism. He is the founder of Mob76, a company that helps tech companies raise money and exit. He speaks regularly at global media events with a focus on Africa, writes a weekly column for The Telegraph, is a regular contributor to The Economist, Wired, Mashable and speaks regularly on the BBC World Service.


2 thoughts on “FTC clears Google for monopoly abuse, but will the EU?

  1. Timely interview in the FT today supports Will’s point that the EU does see things differently from the FTC… Excerpt below, via FT/Alex Barker

    What Mr Almunia is determined to change – ideally within months, through a voluntary deal – is the way Google presents its own services in general search results, allegedly to the detriment of consumers and its rivals in restaurant, weather, maps and comparison shopping. “We are still investigating, but my conviction is they are diverting traffic [to their own services],” said Mr Almunia, casting it as a potential abuse of dominance. The view in America is different, partly because of legal culture and partly because Google holds a tighter, 90 per cent-plus market share grip on the EU market, compared to 67 per cent in the US. “The way the US looks at abuse of dominant position is different than the European one,” he said.

  2. Pingback: FTC clears Google for monopoly abuse, but will the EU? - Connected EverywhereConnected Everywhere

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