Google should be regulated like telcos and electricity companies, say rivals

Companies who have been assessing Google's planned remedies to anti-competitive practices called on the European Commission on Tuesday to reject them and to consider regulating Internet search.

Google has been under investigation by the Commission since November 2010 after rivals accused the search giant of setting its algorithm to direct users to its own services by reducing the visibility of competing websites and services. It was also accused of content-scraping and imposing contractual restrictions that prevent advertisers from moving their online campaigns to rival search engines.

On April 25 Google proposed specific measures to address these complaints and rivals and interested parties were invited by the Commission to "market test" them. That testing period ends on Thursday.

However, Michael Weber, CEO of Hot Map, said the testing period had not been long enough. "You cannot do a serious scientific study in one month," he said. Weber and others asked the Commission for a two- to three-month extension, but were only granted four extra weeks.

Weber was unimpressed with Google's remedies and said that a formal statement of objections from the European Commission's antitrust department would have been better than the current negotiations.

Google has proposed to label its preferred links to its own sites in search results. But publishers say that this will mislead consumers into thinking these were somehow tailor-made results for search queries and interests, thereby causing even greater harm to competition.

Google also proposes to include links to rival search engines for specialist restaurant search results that generate revenue for Google. Google's paid-for services would be separated from general search and treated more like advertising.

Finally, Google has agreed to remove exclusivity provisions from all future contracts and any legacy advertising contracts and will offer tools to prevent Web scraping by allowing content owners to opt out.

But many complainants who met in Brussels on Tuesday to present their position on the remedies said that search is such an important Internet tool that it should be regulated like a telecommunications or electric utilities.

"Everyone relies on it," said Weber. "Unfortunately no one planning the digital single market thought that a single company would control access to the Internet." Google has 95 percent of the search market in the E.U.

Thomas Vinje, legal counsel and spokesman for FairSearch Europe, which represents some of the complainants, said that in putting Google's remedies forward for market testing, the Commission made clear that it thought they were "palatable" and "worthy of discussion." But he, too, called on the Commission to reject the remedies.

Many complainants said the remedies don't go far enough since they won't apply to redirected searches to new top level domains such as .fly or .hotel.

Others thought that the remedies wouldn't make much difference to Google anyway. "Google will exploit the loopholes. Look at what they do with regard to tax," said Kate Sutton, commercial director of Streetmap.

Meanwhile hundreds of publishers and their trade associations wrote an open letter calling on Competition Commissioner Joaquin Almunia to reject Google's draft remedies completely.

"As a minimum requirement, Google must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display and penalty algorithms," said one of the signatories, Helmut Heinen, president of the Federation of German Newspaper Publishers.

Feedback from the market test will be taken into account in the Commission's final analysis. However, it is the Commission that Google's remedies must satisfy, not any other party involved. If a solution isn't found, the Commission could still fine the company up to 10 percent of its annual global revenue.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.