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Search Neutrality: An Emerging Regulatory Issue

30 Mar 2011
Search Neutrality: An Emerging Regulatory Issue
*** This blog post is taken from the IIEA's March 2010 Digital Policy Newsletter available here ***
The concept of Search Neutrality is based on the principle that search engines should have no editorial policies except for their preference for impartiality, comprehensiveness and relevance.
On 30th November 2010, the European Commission announced a preliminary anti-trust investigation into whether ‘Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services’. Three sites, Foundem (a British price comparison site), Ciao.de (a German online shopping site which was bought by Microsoft in 2008 and is now called Ciao Bing) and ejustice.fr (a French legal search engine) had lodged complaints with the European Commission. This landmark case represents the first European Commission action on regulating the practices of search engines, and the results of this case will fundamentally impact on how search engines operate for years to come.
The dispute centres around the ranking of sites that appear after a user searches on Google. Google utilises an algorithm to determine the order in which sites appear in search results. The core of this algorithm is called PageRank, which analyses links found across the Internet and ranks sites in order of their relevance to a given search.
Foundem claims that from June 2006 to December 2009 its website was purposefully de-listed from Google search rankings.  It alleges that Google made an exception to its algorithm to effectively obscure Foundem from search results, the consequence of which resulted in Foundem being dropped from a rating of “excellent” to a lower ranking of “poor” on the Google search. Google argued that this was due to the nature of the content on Foundem’s website, which mainly comprised content from other websites - similar to the content produced by numerous spam websites.  The downgrading allegedly occurred simultaneously with the introduction of “Universal Search” by Google, a new search algorithm that integrated Google products into the search results.
Foundem argued that despite a number of appeals to Google, the latter refused to alter the search algorithm until December 2009, when Google manually “white-listed” Foundem.
As search engines are increasingly becoming a major conduit for business, any manipulation could have wide ranging implications for competition as Google has an 85% share of the search market globally, and a 95% share in Europe.  However, the network Google uses has remarkably low barriers to entry and setting up a search engine does not require extensive capital, as evidenced by the fact that there are four search engines that enjoy at least 2.5% market share globally[1] and over 100 search engines currently in operation.
It is up to the European Commission, therefore, to decide whether these allegations have any substance or whether Google is merely delivering the most relevant results to its users.
The outcome of this particular case, if it proceeds, will be of seminal importance in how search engines are regulated in the future. It will determine whether Google has abused its dominant position for online searching by decreasing the likelihood that searches will produce results from competing search services by reducing their quality score and by prioritizing Google services such as Google Maps or YouTube for instance and making their service the easiest option.
A comparison could be made between a search engine, such as Google, proposing a particular product or service, such as Google maps, when someone searches for “maps” and the case of an operating system, such as Microsoft, proposing/offering a particular product or service, such as Internet Explorer, by having it pre-installed. In neither case does the company require you to use their service, they just make it the easiest option. 
One proposal to ensure fair practice for search engines is the introduction of the principle of ‘search neutrality’. It is similar to the concept of “net neutrality”, which protects access to the Internet for users and favours openness.  Search neutrality could potentially require search engines to ensure that they do not explicitly favour one company over another.
Search algorithms are designed to discriminate on the basis of assigning value to the production of search results. Proponents of search neutrality want transparency about how the underlying algorithms work and transparency in their application. They argue that all websites should have access to a timely appeal process if they become subject to any new exclusionary penalties from a Google search algorithm.
As the European Commission has also initiated an investigation into the portability of online advertising data and into restrictions which Google places on interoperability, it is likely that this is the beginning of a series of investigations into Google practices which will feature prominently in the work of the Competition Directorate in the coming years. Google’s senior competition counsel argues that Google does not lock in its users or create barriers to entry and says that the company has responded with equanimity to this preliminary investigation.  The European Commission can fine companies up to 10% of global turnover for breaching EU competition rules, allowing fines of up to €1.75 billion. The largest fine given by the European Commission to date was against Intel for €1.06 billion.

[1] http://www.boutell.com/newfaq/misc/howmanysearch.html

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.


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