EC antitrust probe of Google may be just the beginning

U.S. authorities may quickly follow suit, analysts say

The European Commission's announcement that it has launched an antitrust investigation against Google could spur further inquiries into Google's search practices, industry analysts said.

The European Commission announced today that investigators are looking into allegations that Google abused its heavily dominant position in online search to promote the company's other services. The investigation, the EC noted, also will focus on Google's alleged abuse of exclusivity clauses that discourage sites carrying advertisements served by Google from also carrying advertisements served by its rivals.

"The thing about these probes is that they don't happen in a vacuum," said Dan Olds, an analyst at Gabriel Consulting Group. "The EC regulators have watched what the U.S. regulators have said and done in reference to Google, and it helps the EC shape strategies and approaches. It works both ways. I'm sure the U.S. [Federal Trade Commission] is closely looking at what the EC is alleging and will be following the investigation with great interest."

Olds said he assumes that Google's competitors are pushing U.S. authorities to launch their own investigation, and those pleas might carry more weight in light of the EC's investigation.

"The fact that the EC found this a compelling enough situation to justify opening a formal investigation is grounds enough to get the U.S. regulators at least taking a cursory look," Olds said. "And investigators like to investigate -- particularly when the subject of the investigation is probably the highest-profile company in the world."

Augie Ray, an analyst at Forrester Research, noted that Google might be in for a rough ride with the European investigation.

"The E.U. seems to be taking a more aggressive stance than U.S. antitrust regulators, so combating this complaint will get serious attention from Google," said Ray. "It isn't evident to me that Google has done anything wrong, although if they fail to prove that they treat their own sites the same as competitors within their search results, that would be quite damaging. Google reportedly owns around 85% of the search market in the U.K., for example, so if the EC finds [that Google] is giving preferential treatment to their own sites over competitors, that will likely be costly, could force changes and would provide opportunities for competitors."

But even if that happens, Ray said he doesn't think that will affect Google's dominant position or business in Europe.

And that's one of the reasons why Rob Enderle, an analyst at Enderle Group, doesn't think Google will take this European probe very seriously, even though it could spur further investigations.

"Remember that both IBM and Microsoft during their antitrust issues initially thought they could fight through this, and Google appears to be even more arrogant than these other two companies were," he said. "I'm expecting Google to move even more slowly to address this and not recognize the danger any better than their predecessors did."

Enderle added that he doesn't think the EC's action will spur an investigation in the U.S. Rather, he said he would be shocked if one isn't already under way here.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is

Copyright © 2010 IDG Communications, Inc.

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