Experts Say ECs Case Is a Hard Sell

By Clint Boulton  |  Posted 2010-11-30 Print this article Print


Search Engine Land's Danny Sullivan published this trenchant post, providing valid points that skewer the concerns the Commission is fielding from shopping sites.

"A search engine's job is to point you to destination sites that have the information you are seeking, not to send you to other search engines," Sullivan wrote. "Getting upset that Google doesn't point to other search engines is like getting upset that The New York Times doesn't simply have headlines followed by a single paragraph of text that says,  -read about this story in The Wall Street Journal.'"

Google also pointed out in its blog post that a lot of the antitrust allegations and investigations the company faces are steeped in the fact that the company has grown so large.

The search engine controls 66 percent of U.S. search (more overseas), employs almost 24,000 people and is expanding its search ad purview into mobile sectors.

Indeed, Susquehanna Research analyst Marianne Wolk said Google's lion's share of global search queries and search ads have meant it has faced significant regulatory scrutiny for some time and is likely to continue to do so.

"In this sense, today's announcement is not -new news' to most investors," Wolk wrote in a research note Nov. 30.

But size alone does not make one a monopoly; it is the action an entity takes to get there. Google has tried to be cautious in this regard, even as it has misstepped in matters of privacy with Google Buzz and Google Street View.

However, there has been no incontrovertible proof that Google has done the competition wring. Such a finding of guilt by the EC would be incredibly damaging for Google, costing it search partnerships and money.

The Commission-which has fined Intel and Microsoft more than $2 billion for abusing their positions in their respective markets-reserves the right to fine companies up to 10 percent of annual revenues for abusing their market power.  

Wolk noted that fining Google 10 percent of global sales could cost the company $2.8 billion, based on the last 12 months of gross GAAP revenue of $28 billion.

This is a pittance of Google's $34 billion in available cash; the harm to Google's reputation would be much worse.  


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