ICOMP

There have been numerous recent press articles about the fresh antitrust complaint against Google filed with the European Commission by 1plusV, the parent company of French online business eJustice.fr. eJustice.fr is a vertical search engine specialising in legal research and documentation, with its own algorithm for determining the order of responses. Search queries are free and the site is financed entirely by advertising.

eJustice is not a member of ICOMP and we have not discussed the complaint with them or their advisers, but there is considerable public interest in having a better understanding of the complaints against Google and the current investigation into their behaviour. This blogpost looks at the public information available about 1plusV’s fresh complaint.

As a reminder, the European Commission launched a formal investigation on 30 November 2010 into whether
• “Google has abused a dominant market position in online search [where it has a market share of over 90% in many countries] by allegedly lowering the ranking of unpaid search results of competing services which are specialised in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing service”
• “Google lowered the ‘Quality Score’ for sponsored links of competing vertical search services“,
• “Google imposes exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their web sites, as well as on computer and software vendors, with the aim of shutting out competing search tools”, as well as into
• “suspected restrictions on the portability of online advertising campaign data to competing online advertising platforms”.

eJustice.fr originally complained about Google to the European Commission in March 2010. According to press reports at the time, the main ground of the complaint was that search penalties had been imposed on eJustice.fr in 2007 which had a calamitous impact on the number of people logging on to the site as well as on its advertising revenues. It was also reported in the press that eJustice.fr’s complaint contained allegations that Google placed pressure on eJustice.fr to adopt Google’s algorithm and advertising network.

The fresh complaint states that following the lodging of eJustice.fr’s complaint with the European Commission in March 2010, other sites belonging to 1plusV were de-listed by Google in an act of retaliation. Eight months’ later, following the formal opening of the Commission’s investigation on 30 November, those sites were re-listed (“at a rate of more than 10,000 pages per day”) although no changes to their contents had been made. 1plusV has also provided evidence to the Commission that between 2006 and 2010 Google prevented it from using Google’s AdSense advertising services on sites using 1plusV’s search technology called V-Search. This made it difficult to monetise 1plusV’s innovative technology and free services through search advertising, as well as impeding the development of a innovative and competitive search technology which has had to be abandoned.

1plusV also provided evidence that Google ignored requests by certain websites not to be listed among search results, which gave it a competitive advantage over search engines that did respect those requests. 1plusV has also complained about Google’s practice of publishing millions of links to pages of one of its own vertical search businesses, Google Books, while refusing to list similar pages on competing search engines because of their alleged lack of original content.

1plusV has pointed out that the fact that the rankings of the sites changed (de-listed in March, re-listed in December) although their contents had not been altered demonstrates that Google engaged in both manual blacklisting and manual whitelisting. This is something that Google has consistently denied, as described in a recent article published by James Kanter in the International Herald Tribune and New York Times. It is however at the heart of the European Commission’s antitrust investigation and the new evidence and allegations of retaliation will be enormously valuable.

The key concern of companies like eJustice.fr, as well as many of ICOMP’s members, is that Google’s dominance of search and search advertising gives it an unprecedented control over the gateway to the Internet. This impacts both the ability of online businesses to reach viewers as well as their ability to fund those businesses through advertising. The end result is that customers are deprived of new and innovative products and services.

The concerns about blacklisting and whitelisting go beyond simple measures such as greater transparency and an adequate appeals process – both of which are clearly necessary. They raise fundamental questions about the governance of the Internet and how the rules applicable to search – such as the competition and data protection rules – should be enforced. The conflict of interest between Google’s control of the search infrastructure and Google’s commercial operations where it competes with other users of that infrastructure is at the heart of the concerns about how Google exercises it market power. Any remedies need to ensure the eradication of that conflict of interest.

Regards,

David Wood
ICOMP Legal Counsel

One of the challenges for ICOMP member One News Page’s “Have I Been Penalized” campaign, which seeks to raise awareness of search engine penalties, is that so many website owners assume that dramatic collapses in visitor traffic are normally triggered by the regular reshufflings of Google’s index.

As you know, Google is overwhelmingly dominant in search, commanding around 70% of the global internet search market and an even higher market share across Europe.

When Google reshuffles its web index, which is known colloquially as the “Google Dance” and which occurs roughly once every three months, it can lead to changes in a site’s Google rankings.

Penalties, however, have a much more severe impact on traffic than incremental ranking changes resulting from a Google Dance. To make matters worse, penalties are often imposed in error, causing organic traffic to legitimate websites to dry up almost overnight.

It is clear from the recent research conducted by One News Page that most website owners believe it is the Google Dance that is the primary cause of their site’s severe ranking loss. In fact, of the 1000 UK and US website owners polled only around one in ten (11%) were aware that penalties could be issued by search engines.

Yet as many as a quarter (24%) of website owners said they had suffered large, unexplained falls in their site traffic.

These results highlight how important it is to educate website owners that search engine penalties actually exist.

And if more owners can be convinced about the existence of penalties, they can also be shown why they should be concerned. Because once a penalty is imposed, a site’s organic traffic can fall by 90% or more, almost overnight, destroying what once had been a viable business. And penalties have been known to be left in place for years.

It is clear that more transparency about penalties would be popular among website owners. Our research found almost all owners (94%) would like the leading search engines to be obliged to disclose any penalties.

Many website owners are unhappy about the general lack of clarity from the search engines, not only over how search results are decided, but also other issues such as bid costs for paid search advertising.

The survey shows that over half (57%) of those using paid search advertising had experienced unexplained increases to their bid costs, and almost 9 in 10 complaining that paid search advertising costs lacked transparency.

This meant nearly 70% felt the big search engines could ‘do whatever they liked’ when it came to imposing penalties, and almost two thirds of the site owners said they were already too dependent on them.

We can only agree that there is significant room to give a much fairer deal for entrepreneurial website owners, without whose hard work and risk taking the internet would be a much poorer place.

Regards,

Marc Pinter-Krainer, Chairman, ICOMP “Search” Working Group