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Published: September 5, 2012 at 7:06 pm
Google Inc. (NASDAQ:GOOG) has essentially been flaunting its power over search results in Europe, and apparently Europe has had enough of it. One person in particular has spoken up in a recent interview and declared that if Google doesn?t change its search-results algorithm to be more fair, it was going to face many antitrust lawsuits in the very near future.
The word that was used was ?tsunami.? Not exactly a European word, but it makes a point. A recent article discusses the progress of an ongoing antitrust investigation by the European Commission, which has been in discussions with Google Inc. (NASDAQ:GOOG) to come to a reasonable settlement in terms of Google?s search results, which one British web search company chief executive says has been favoring Google and its various properties ? including YouTube ? prominently in its search results, knocking down competitors lower on the results, even when those competitors had more relevant results.
Shivaun Raff of the British web-search firm Foundem, which has been on a so-far quixotic quest to diminish Google?s stranglehold on the search realm in Europe and was the catalyst behind the EC opening the antitrust inquiry two years ago, said that Google Inc. (NASDAQ:GOOG) may well be staring at ?a tsunami of follow-on litigation??if it does not change its search algorithm to be more fair to the entire market rather than favoring its own interests. Raff claimed that because Google would not be interested in addressing a series of lawsuits from other companies that were adversely affected by Google?s ubiquitousness, the EC is ?in a far stronger bargaining position than many commentators realise. Anyone suggesting that Google will get away with superficial remedies ? is almost certainly mistaken.?
The EC began its investigation in 2010, and addressed four areas where it felt Google Inc. (NASDAQ:GOOG) was abusing its market control in search. Google responded July 2 of this year, the deadline day. The EC is soon expected to discuss the progress of discussions with Google regarding remedies. If Google does not reach a settlement with the EC, Raff said, then the Commission would be forced to take the issue through the courts ? which would then open the doors for affected companies to file lawsuits.
?Unbeknownst to its shareholders, Google?s increasingly anti-competitive practices have been quietly accruing billions of dollars of antitrust liabilities,? said Raff.
Whether this issue progresses to the courtroom will be an issue to watch, especially for interested parties like hedge-fund managers invested in Google Inc. (NASDAQ:GOOG) stock, including Chase Coleman of Tiger Global Management LLC.
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