The Federation of German Newspaper Publishers (BDZV) and the Association of German Magazine Publishers (VDZ) have searched Google Inc.’s (NASDAQ:GOOG) proposal to the European Commission, and did not like what they found. BDZV, VDZ, and other publishers in Europe signed a statement saying that if the Commission accepts Google’s remedy for alleged antitrust violations, the result “would be nothing short of absurdity.”
Google has been at the center of an investigation by the European Union (or, EU) since 2010. The investigation has been to determine if Google has been abusive in using its “dominant position” as a search engine to promote its own results.
There are two types of results that appear when a Google search is conducted, the investigators say. The unpaid results are “natural,” and based on algorithms. Third-party, sponsored links will also appear on the page after a Google search. The concern of the commission was whether or not Google had tampered with the unpaid results of rivals, and created a system where its own vertical search services were promoted to the detriment of competitors.
The EU had asked for feedback on Google’s latest offer, submitted at the end of October. Bloomberg published details given by an EU official. The official said Google was willing to lower the minimum price available to bid for a link to appear in specialized searches by 0.03 euros ($0.04).
Additionally, other search sites could be hidden by Google users. Prior to this offer, Google had specified that changes in cost would only apply when a search triggered a Google service response, such as Google Shopping.
FairSearch Europe lawyer Thomas Vinje explained that, “125 copies of the proposal” had been sent “to organizations, along with a group of questions — and the requirement that we all keep everything confidential.” The publishers’ statement criticized this because the commission should have been holding Google to a higher standard, not shopping remedies that do not meet the “significant improvements” called for after the first proposal was received “very negative” reviews.
The publishers take Google to task as well. “Were the Commission to accept these proposals, it would be helping Google advance its business strategy to transition free organic search into paid search. The first search result would still be reserved for Google’s services, while the subsequent results would not be ranked by relevance anymore but according to the price website operators are willing to pay Google.”
The system that would be put in place creates an environment where increasingly higher bids are made to secure a spot in the results. It reduces the level of competition while rewarding “Google’s abusive self-preference” the publishers claim. The publishers are not the only group wishing to see the EU take a hardline stance on Google. A group of companies, including Microsoft Corporation (NASDAQ:MSFT), also do not think Google’s changes merit praise, and more needs to be done. Microsoft has its own search engine — Bing.
The Senior Director of Search at Microsoft, Stefan Weitz, recently acknowledged in an interview with Forbes that, “Bing is not going to beat Google in keyword search any time soon.” This is not stopping the company from developing new search ideas and methods, which could ultimately benefit from harsher restrictions by the EU on Google’s search preferences.
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