One of the services whose complaint sparked the European Commission’s competition investigation in to Google (NSDQ: GOOG) is leapfrogging the ongoing process by launching a separate, €295 ($419.05/£262.46) million damages claim against it.
Vertical search site builder 1plusV’s Ejustice.fr site was last year one of three complainants to the EC that prompted a full-on, multi-level probe in to Google. It later widened the complaint to include all its topical search sites, including E- Musicpro.com and Eguides.fr. Now it is to file a case Paris commercial court Tuesday, after Google received notice on Monday.
1plusV, using its VSearch platform, builds vertical search engines using a “hybrid” mix of both algorithms and human experts, claiming to produce “more relevant results than just traditional algorithmic search”. Earlier, it had complained that results for its sites, primarily the Ejustice.fr legal search site, were demoted by Google in favour of its own products.
In its latest complaint, 1plusV accuses Google of requiring exclusive links between AdSense and search, of crawling private data including extranets and of favouring Google’s own products in search results.
“Between 2007 and 2010, no fewer than 30 vertical search engines created by 1plusV, some of which had a significant economic potential, have been “delisted”. Some of these vertical search engines have recently been re-indexed by Google robots and, without any change in their content and no explanations. This shows that reasons for the “delisting” were obscure. In all cases, considerable damage was caused to 1plusV.”
“If competition had been able to function normally, the 30 search engines created by 1plusV would have generated an estimate of more than €30 ($42.62/£26.69) million revenue per year.”
1plusV also appears to grumble that an M&A exit opportunity was not open to it: “For example, the vertical vehicle search engine Aardvark, whose philosophy is similar to VSearch, was purchased in February 2011 for about $50 (£31.32) million, eight times its revenues, and would probably be paid more if it were sold today.” It is, therefore, presenting a counterfactual to suggest the theoretical lost revenue.
A Google spokesman responded to the new complaint by saying: “We have only just received the complaint so we can’t comment in detail yet. We always try to do what’s best for our users. It’s the key principle that drives our company and we look forward to explaining this.”
Seven months after the European Commission’s preliminary probe turned in to a full-scale investigation, the U.S. Federal Trade Commission last week opened its own wide-ranging investigation in to essentially the same issue of market dominance.
Bruno Guillard operator Brun Guillard: “It is reassuring to see that the behavior of Google, one year after starting to attract the attention of some European competition authorities, has become a major concern on both sides of the Atlantic. It seems clear that ex ante regulation of search engines will be needed before long.
1plusV will be challenged to prove theoretical losses in this court case. But it’s quite likely the European Commission will order certain Google services be untied, just as it earlier ordered Microsoft (NSDQ: MSFT) unbundle Windows Media Player from Windows and offer genuine web browser choice in the operating system – measures for which it also fined Microsoft hundreds of millions.