The European Union's competition commissioner filed a "statement of objections" on Wednesday that brings Google a step closer to facing legal sanctions under European law. The European Commission's specific allegation is a relatively narrow one — that the search giant has broken the law by giving Google Shopping a more favorable position in search results than other comparison shopping services — but the underlying policy issue is much broader. Following the logic of the EU complaint would require a massive transformation of Google's search product.
The key point is that Google doesn't just give prime real estate to Google Shopping results. It unapologetically does it for products like Google Images, Google Maps, and Google News — all of which regularly show up in special boxes near the top of Google search results.
Consequently, if you take the logic of the EC's complaint seriously, then EU regulators aren't going nearly far enough. If it's illegal to elevate Google Shopping over other search results, it should also be illegal to give special treatment to Google's other specialized search products for maps, news, or images.
And indeed, that's exactly what Google's more ambitious critics are pushing for. If they win, it could lead to a dramatic transformation of Google's search product — one that may not be in the interests of customers.
Europe is focused on shopping, at least for now
The European Commission complains that "Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits," and that it has done so since 2008.
The argument echoes charges that American and European regulators made against Microsoft in previous decades. During the 1990s and 2000s, the software giant repeatedly got in trouble for bundling products like Internet Explorer and Windows Media Player with its dominant operating system.
Critics said this gave Microsoft an unfair advantage in these markets, harming rivals such as Netscape and RealNetworks. Now, Google's dominance of the search market is subjecting it to the same kind of regulatory scrutiny Microsoft started getting two decades ago.
So why has the EC focused on shopping, while mostly ignoring the preferential placement given to other Google products? Mark Patterson, a legal scholar at Fordham University, believes European regulators probably focused on shopping because they "have what they think is a smoking gun" — though Patterson says we don't yet know what that is. For example, if the EC had evidence that Google chose to promote its own shopping products despite internal data showing customers preferred results from third parties, that could be a basis for legal action.
Another likely reason for the focus on shopping: a European shopping site, Foundem, has been a leading advocate for EU officials to take action against Google. Foundem's crusade against Google started nine years ago, when Foundem discovered that its pages had been deleted from Google. Foundem has long since been restored to Google's index, but Foundem has been seeking action by EU regulators ever since.
Google promotes its own products all the time
Whatever the motives for the specific focus on shopping, it's clear that the general principle has much wider implications.
If you search for "White House memorabilia," you get a result like this:
Notice the big "Shop for white house memorabilia on Google" box at the top of the results. If you click on the link, it will take you to Google Shopping, where you can browse a selection of White House memorabilia.
But that's hardly an isolated example. Search for "White House photos," and you get results that look like this:
Search for "White House directions," and you get results like this:
Google's search engine hasn't always worked this way. Google called this approach of blending results from different types of specialized search engines into a single page of results "universal search" when it was introduced in 2007.
Google says universal search is good for customers because it helps provide the most relevant search results. But critics say universal search gives Google's specialized search products an unfair and illegal advantage.
Google's critics want the EC to go much farther
Foundem isn't just unhappy with Google's treatment of shopping results. Foundem views the whole concept of universal search as anticompetitive. In a 2010 white paper, Foundem noted that Google Maps displaced MapQuest as the leading online mapping service not long after Google Maps began appearing in search results in May 2007:
Frank Pasquale, a legal scholar at the University of Maryland, agrees with Foundem's critique. "You don't want to create a situation where the dominant interface by which people are trying to find mapping technology is going to squeeze out all of the oxygen for potential rivals," Pasquale says.
Pasquale would like to see regulators force Google to provide a level playing field for a wide variety of specialized search projects, including shopping and maps. In his vision, Google might be required to show results from Google competitors as often as it showed results from Google's own products. He argues that this kind of mandate would nurture the growth of small startups, leading to more innovation in the long run.
But others are more skeptical. Randal Picker, an antitrust expert at the University of Chicago, agrees that it seems arbitrary to single out Google's treatment of shopping while ignoring the treatment of other specialized search products. But he seemed less enthusiastic about what the EU was doing than Pasquale.
One big problem, Picker says, is that even if the EU wins in court, it could be difficult to come up with an appropriate remedy. For example, a few years ago the EU forced Microsoft to add a "browser ballot" to Windows, allowing users to decide which browser to use. But when a technical glitch prevented the ballot from appearing in 2011, no one noticed for more than a year. Similarly, when EU regulators forced Microsoft to distribute a copy of Windows without Windows Media Player installed, it only sold a few thousand copies, compared with tens of millions of copies for the mainstream version. The EU's remedies against Microsoft were toothless, and they'll have to think hard about how to avoid this kind of mistake with Google.
Another problem is more fundamental: getting regulators involved in designing search results could hamper innovation. Google's practice of including results from its other products in search results pages might be bad for competitors, but it's undeniably convenient for many users.
In theory, it should be possible to require Google to display competitors' results in place of Google's own results. But in practice, the increased bureaucracy could deter Google from making beneficial improvements to its search results page altogether.
Disclosure: My brother is an executive at Google.