by Kate
1. December 2010 10:48
The balance of power on the internet might be about to shift with European regulators wanting to investigate whether Google is giving favourable search results to its own services and less favourable results to competitors.
Regulators want to conduct an investigation in which how Google’s search engine mechanics work will be revealed – information that Google’s competitors wouldn't mind getting their hands on.
How businesses rank on Google can dictate whether a business makes it or breaks it these days. This applies to both the individual blogger all the way up the ladder to multibillion dollar companies.
As soon as news of this investigation was released, Google stock tumbled to $26.40 (4.5%) and closed at $555.71. This was the highest drop in shares for one day since mid-July.
The enquiry has come at a really bad time for Google as the company is trying to expand to bring in US$30 billion this year.
While there are no intentions of whatever is divulged between Google and the regulators going further, the executives of Google don’t want to run any unnecessary risk of opening up trade secrets with outsiders.
On Tuesday, Google said that it would try to answer the commission’s questions but if the commission concludes that Google has acted illegally they could face billions of dollars in fines in the region of what Microsoft and Intel faced in their recent antitrust cases with the commission.
This investigation also marks the first time that a government has wanted to investigate Google’s core practices so thoroughly and could lead to similar investigations in the USA.
Google is the search engine superpower, processing two of every three search requests on the internet, despite there being other services like Bing or Yahoo. Google dominates in Europe with 90% of the market in some countries.
The investigation will set out to deduce whether Google has tried to prevent other websites within its network from displaying commercial messages from its rivals and whether Google made it inhibited advertisers from exporting their information to online marketing platforms.