'Possible' abuses by Google found
15 December 2010, 13:57
Paris - France's competition regulator has found "possible" abuses by Google Inc in its online advertising practices because of its dominant market position, in a study released on Tuesday that could influence a Europe-wide probe into the company's search services.
The report by the French Competition Authority is not legally binding, and Google dismissed its conclusions as too narrow to have widespread impact. Still, the report presents a new challenge to Google in France, where the search engine is seen by many as too powerful and has faced several legal disputes.
The French regulator said it sees no need for new sector-wide regulations. However, it recommended unspecified, "targeted responses" to address complaints that Google overcharges customers and makes it too hard for other companies to compete. The report was commissioned by the French Finance Ministry following several such complaints.
The regulator's report focuses on ads that appear when users type in search queries, which provide the bulk of the Mountain View, California-based Google's revenue.
It comes after EU regulators last month announced an investigation into whether Google fixes its search results to favor its services over those of rivals. The company could face billions in fines if found guilty in that probe.
The EU's competition commissioner welcomed the French report on Tuesday.
Positive words for Google
Google, in a statement from its European offices, said "search ads are one of many options for advertisers. If the price of search ads rises, advertisers can and do switch to other formats, both online and offline".
The French regulator had positive words for Google: "In and of itself, this dominant position is not reprehensible: it results from a great deal of innovation, supported by significant and continuous investments."
But it went on to say that it had "identified possible exclusionary conduct intended to discourage, delay or eliminate competitors" such as artificially high barriers to entry into the market and technical obstacles.
It also noted "possible operational abuses, whereby the search engine apparently imposes exorbitant conditions on its partners or customers, treats them in a discriminatory manner or refuses to guarantee a minimum degree of transparency in contractual relations".