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The European Commission, including Joaquin Almunia, on Dec. 18 gave Google a month to come up with proposals to address search bias.

Virginia Mayo, Associated Press

Google fighting a two-front regulatory war

  • Article by: THE ECONOMIST
  • December 23, 2012 - 5:05 PM

"Have you been duped by a bad search?" asks scroogled.com, a cheeky website that urges people to post gripes about the quality of Google searches on a related Facebook page.

Scroogled was set up by Microsoft and encourages you to use Bing, Microsoft's competing search engine, instead.

Partly at Microsoft's urging, regulators in America and Europe have spent the past couple of years looking into whether Google has abused its dominant position in the online-search market on both sides of the Atlantic to advance its commercial interests at consumers' expense.

Its rivals are hoping that Google will be forced to make changes to its search activities that will severely hamper its business. They may well be disappointed by the eventual outcome in America. The Federal Trade Commission is considering a settlement with Google that would barely touch the company's core search business.

The Web giant's foes want the FTC to rein in Google's habit of promoting its own services, such as travel-related offerings, ahead of those from competing sites in search results. The deal being discussed would not do that.

Google has volunteered to let other websites opt out of having snippets of their content, such as consumer reviews, displayed on its pages. It also has offered to stop making exclusive deals with other sites for use of its search ads and services. In a third concession, Google has said that it will make it easier for advertisers to shift data generated by ad campaigns run on Google to other search engines.

Addressing another FTC concern, Google seems willing to license patents deemed essential for wireless communications to other firms on fair, reasonable and nondiscriminatory terms. The company acquired thousands of patents when it bought Motorola Mobility, a maker of mobile telephones.

Google's foes want the FTC to insist that Google stop favoring its own businesses. Some have already been lobbying the Department of Justice to take up the case. Nonetheless, Herbert Hovenkamp, an antitrust expert at the University of Iowa who has done work for Google, reckons that it is "highly unlikely" to go any further than the FTC.

Things are also coming to a head in Europe. On Dec. 18 the European Commission said that it wanted Google to address the charge of search bias and gave it a month to come up with proposals to do so.

This presents Google with a dilemma. If it caves in to the Europeans' demand and ends up producing two sets of search results, one for America and another for Europe, it will highlight the differences between them.

Customers are bound to notice, and that could give more ammunition to Google's opponents in America. If the firm refuses to budge, however, it could end up mired in a nasty and protracted legal battle in Europe that could leave it well and truly scroogled.

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