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Why Google News faces Anti- trust probe in Italy?
By Amarendra Bhushan for CEOWORLD Magazine Updated:August 27, 2009
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Search engine giant, Google, is being investigated by Italian antitrust regulators over potential abuse of the dominant position held by its news service.
The investigation was prompted by a complaint from the Italian association of daily newspaper and periodical publishers, which claims Google News takes readers and advertising away from other news providers by running other companies’ content.
According to FIEG, if member sites do not want their news to appear on Google News Italia or if their coverage is not picked up they are automatically excluded from Google’s search engine, by far the most used in the world.
The Italian news sites, FIEG observed, receive no compensation for the news picked up by Google News Italia and if they do not appear on a Google search they are denied access to thousands of potential ‘visitors’ who generate advertising income.
Google argues that it helps newspaper websites make money through online advertising and does not misappropriate content.
According to the filing, news companies that refuse to share their news on Google News Italia are excluded from the search engine of U.S. firm Google Inc. (GOOG), which may distort the collection of online advertising revenue.
Fieg also complained that Google’s news site aggregates its content using undisclosed criteria.
“The lack of transparency, according to Fieg, damages those companies that compete with Google in the online advertising market,” the Italian regulator said. The probe is scheduled to end by Oct. 15, 2010, according to the same filing.
A spokeswoman for the Italian regulator Thursday said that parties involved in the case – such as local news companies and consumer associations – can express their views on the matter in the coming months. If the regulator finds Google Italy to be in the wrong, the unit may face a fine of up to 10% of its revenue, which in 2007 totaled EUR13 million.
A spokesperson for Google said the company had been informed of the claim against Google Italy, and it is currently looking at the details of the complaint. “It’s in relation to Google News which drives significant traffic and new readers to newspaper Web sites,” the company spokesperson said.
Ever since Google’s takeover of the online advertising agency DoubleClick in 2008, the search advertising giant has been in regulators’ sights, on concerns that the company has a too prominent position in the online advertising space.
And Fieg is not the first entity to complain that Google penalizes companies who do not fit the online giant’s business model.
A U.K. based price comparison website called Foundem has for years complained that Google unfairly dropped it from its search results because Foundem mainly offers secondary content. Google’s algorithms are tweaked to penalize web sites which do not offer unique content, but as Foundem’s main service is to pull together and compare already existing web sites, it found that is was virtually impossible to get on Google search results.
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