Google Being Sued in UK for Bias in Search Results

Google allegedly steers customers away from competitors in search results, according to a new lawsuit filed by Foundem.

Google is being sued in the United Kingdom for allegedly helping its own business by steering customers away from competitors in search results. The lawsuit has surfaced just a week after the U.S. Federal trade Commission cleared Google of similar conduct in the United States, and as European regulators conduct their own investigation.

Foundem, a British shopping comparison Website, filed a lawsuit against Google in London "seeking damages for revenue lost as a result of Google's 'anti-competitive conduct,'" according to a story from Bloomberg. The court documents were filed in October and were just released this week, Bloomberg reported.

This isn't the first time that Foundem has gone after Google in connection with such claims. Foundem helped motivate a 2010 antitrust investigation by the European Union regarding the same kind of alleged behavior by Google. The EU is still considering actions against Google despite the FTC's decision in the United States Jan. 3.

"Foundem said in the lawsuit that it had been unfairly penalized by Google because it offers a competing shopping comparison search service," reported Bloomberg. "It lost Web traffic as a result of being pushed down in Google’s search rankings."

In the United States, Google essentially received a hand slap from the FTC after a 19-month investigation into allegations that the company had been manipulating its search algorithms to favor Google's results over competitors. The FTC ruled that not enough evidence existed to prove allegations from some competitors that Google had manipulated its search algorithms to harm competing Websites and unfairly promote its own competing vertical properties. Instead, the company entered into a voluntary agreement with the FTC to change some of its other business practices.

In light of the recent FTC decision regarding Google, U.S. Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, has sent a letter to the FTC's investigator general, Scott Wilson, asking him to immediately probe media leaks that occurred during the government probe into Google's conduct. Issa argued that the leaks could have unfairly influenced and lessened the government's probe and its results.

Such leaks are barred by law from occurring during FTC investigations until a decision is reached and announced by the agency.

Among the key parts of the FTC agreement with Google is that the search company voluntarily will end some past business practices that could stifle competition in the markets for popular devices such as smartphones, tablets and gaming consoles, as well as the market for online search advertising, according to the agency. Under a binding settlement with the FTC, Google will allow competitors access "on fair, reasonable, and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smartphones, laptop and tablet computers, and gaming consoles," the FTC reported.

As part of that agreement, Google will not seek court injunctions to block competitors from using Google-owned patents that are essential to key technologies used in products developed and sold by competitors, according to the FTC. Many of those patents came from the company's acquisition of Motorola Mobility in May 2012 for more than $12 billion, which included a large patent portfolio of technologies related to mobile and other consumer and business devices.

Now Google will have to see what happens with similar antitrust cases against the company in Europe, where harsher consequences and actions are being considered.

Google was first notified by the FTC of a "formal review" of its business practices in June 2011 after similar reviews began in Europe. At that time, the European Commission—the antitrust arm of the EU—launched an investigation into the company's search practices after vertical search engines such as Foundem, and Microsoft's Ciao complained the company favored its Web services in search results on over theirs. They argued that this put them at a significant competitive disadvantage in the market.

The initial FTC review in 2011 began after the agency heard complaints from Microsoft, Expedia, TripAdvisor, Yelp and other Websites that Google promotes its Web services above those of competitors.

Google denied all such allegations at that time, noting that its search algorithms analyze Website quality and popularity based on links for placement as part of its PageRank system.

In July, Google reached a record $22.5 million settlement with the FTC to resolve charges that Google bypassed Apple Safari browser privacy settings that blocked cookies for their users. The settlement was criticized by the Competitive Enterprise Institute, an industry group, as "a dangerously overbroad precedent that will chill Internet innovation and hurt online startups," the Institute said in a statement at that time.