By: Arthur Cooper
Submitted: 2010-12-07 14:38:46 | Word Count: 664
The search engine giant Google is currently being investigated—yet again, for fears that it may be violating anti monopoly laws and intentionally stifling innovation and the success of its competitors. Although it originally faced queries in the US based on suspicions that it was violating the Sherman Anti-Trust Act, which is supposed to guard against monopoly, this time it is being investigated by the European Union.
The real concern by various officials around the world shows that in the marketplace, size does matter. Every time Google has set out to acquire different brands, they have come under inquiry. Recently the giant corporation has been subject to rumors related to its $5 million bid to buy Groupon, a highly successful company in its own right that has become the number one comprehensive place where users go to get daily coupons from their favorite vendors. This has officials worried yet again, because the move smacks of corporate market positioning tactics. Groupon is one of the fastest growing companies in history, gaining a market share of 33 million subscribers in just two years. Since Facebook unleashed its own deals initiative last month, with its huge market share, it would have been positioned to give Groupon a run for its money. If Google does acquire Groupon, it would simultaneously squash one strong competitor in the online advertising market, while strengthening itself against another.
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Now the giant has to face broad allegations from European officials that it abuses its market dominance to crush competitors. The very serious charge was brought against it by online rivals, mostly but not all based in Europe, who claim that Google rigged its search results to advance visibility of its own services over those of its competitors. Since the search engine is even more dominant in Europe than it is here in the USA, so this is a real concern to the European online market and to European-based search engine competitors. The EU Commission promised that the investigation would involve an in-depth study of Google’s practices.
As for Google’s response, they claim that they present results based on user’s searches, not to please a specific company. This doesn’t amount to an outright denial, but it sounds as if they are claiming that any of their own services that were prominently featured in search results were legitimate based on the user’s search qualifications. This is not going to make any of their rivals happy, because basically, since their methods for scanning the web for relevant results are so intricate, and they are the search engine, they can always claim that the end product only serves the user. In fact, this is what they have always maintained: that they place users first. Google officials have also implied the company has nothing to hide by stating that they understand why their success makes rivals nervous, which comes across a little tongue in cheek. However, the company has agreed to cooperate with the EU Commission investigation.
There are many different allegations, from whether it lowered the “Quality Score” for sponsored links to make them more costly for rival companies to afford advertising, to whether it gave preferential treatment to its own services in result page rankings. This is an investigation that all online companies should watch because its outcome could mean that their efforts to gain profitability through SEO marketing were being undermined by the biggest medium available to them to reach users. Google’s sheer size means that any alleged monopolistic practices proven by the investigation would have translated to a far reaching loss of profitability for its competitors.
