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Google settles and wins in Brussels

Although Google is now — for the first time in the company’s history — giving in to proposed constraints on how it presents its search results, the company is clearly the winner in a three-year investigation involving both US authorities, the EU commission, and what can be called effectively the ‘litigants’: rivals Microsoft, Expedia, and other big tech affected heavily by Google’s search algorithms.

Under the terms, contained in a draft deal formally submitted this week, Google will be under affective constraint to not only label its own specialist search services, e.g. product searches, with an effective “from Google” label, but also to provide alongside these searches “visible” links to rival search engines. This anti-trust agreement is contingent on whether or not Google draws revenue from any particular search service. For example, Google’s news results will only need to be labelled, i.e. marked as provided by Google, whereas product results e.g. travel or restaurant searches – which crucially link to sites characterized by much advertizing – require notable and explicit separation from other results and at least “three” “visible” links to rival search engines.

However, although the legally binding (for five years) agreement and its forced changes will ensure a different front-end interface, and possibly a radically different search experience, the fairly common charge that Google manipulates search results to manifest more business and revenue has yet to be proven, and has yet been acted on by authorities.

Google handles almost 90% of all search queries in the EU, and the company has been hard-pressed in recent times to account for its completely dominating monopoly and market position, and whether or not it is abusing its market power.

‘Litigants’ and the big corporations calling for Google’s figurative head have claimed that they have suffered in their respective markets due to Google’s search methodologies and algorithms unfairly favoring Google’s business interests in those particular markets; a typical example of flouting anti-trust law, charging the firm with the creation and perpetuation of an unequal playing-field. However, the high standards of proof in international competition law have meant that Google has been — in conjunction with an extremely effective legal department – above and beyond any serious attempt to break down the company’s huge monopoly on both national and international internet searches, and the advertising revenues this activity brings in.

Although a trustee will handle compliance in the new agreement between Google and international governing bodies, it is unlikely that corporations will cease in their seemingly constant stream of allegations against the firm. That Google manipulates its search results is yet to be established by legal authorities. Nevertheless, it is completely consistent with standard probabilistic reasoning to claim that Google would be acting irrationally if it didn’t manipulate its search results in order to facilitate market(s) activity conducive to higher revenues.

Check out MarketLine’s research on Google  – click here

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