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Google, Search Engines May Face Closer Scrutiny by EU

Google Inc., owner of the world’s most-used search engine, may face closer scrutiny as European Union regulators take a careful look at allegations of antitrust breaches in relation to Internet searches.

The European Commission, the antitrust agency for the 27-nation bloc, is “examining some allegations of anti-competitive conduct,” Joaquin Almunia, the EU’s competition commissioner, said in a speech today without specifically mentioning Google.

“The work is at an early stage,” said Almunia. “But given the importance of search to a competitive online marketplace, I am looking at the allegations very carefully.”

The comments come five months after U.K. price-comparison site Foundem, French legal search engine and Microsoft Corp. service Ciao from Bing filed an antitrust complaint against Google. No decision has been made yet on whether the commission will start an antitrust investigation of Google, Almunia said during a question and answer session after the speech in London.

Following the February complaint, Google, which has 79 percent of the European search-engine market according to ComScore Inc., said it hoped its arguments would convince the commission not to open a full antitrust probe.

‘Good Case’

“With success comes scrutiny,” Julia Holtz, a senior competition counsel at Google said during a break in the meeting where Almunia spoke. “We have a good case.”

“We’re working with the commissioner and his team to answer their questions, including how Google’s search ranking works to produce the most relevant and useful search results for users,” Google said in an e-mailed statement.

Google, based in Mountain View, California, said it’s “very confident” that its “business operates in the interests of both users and partners, as well as within European competition law.”

“Almunia’s comments show that Google is firmly on the commission’s radar but it doesn’t mean that enforcement action is imminent,” said Matthew Readings, a partner in the London office of law firm Shearman & Sterling LLP. “Intervention in technology markets is not straightforward. The real issue is not so much Google’s current market share, rather how online markets will develop and how contestable they are to competitors.”

‘Manipulated’ Search Results

In his speech, Almunia said antitrust rules must be applied to digital media in the same way they are in other industries.

“If results on a search engine, for instance, are being manipulated, it may well make a difference on the market if consumers know about it,” Almunia said during a speech. “But is transparency enough?”

Almunia, who is in the first year of a five-year term as the EU’s antitrust chief, also said the regulator would push to simplify the licensing of online content, such as music and videos, across the EU.

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