Commissioner Almunia’s handling of the Google antitrust case has thus far been very impressive. In a fast moving market, it is better to outline concerns and give a company the ability and flexibility to remedy them on their own before launching a formal statement of objections. We hope that Google takes the opportunity seriously to find effective solutions.

The areas of concern outlined by Commissioner Almunia directly affect small business competitors. It its search product, Google has admitted to scraping the content from its competitors’ sites and featuring it in its own vertical search engines. The use of its dominant market position robs competitors of traffic and advertising revenues. By promoting its own vertical units at the expense of competitors in search results, Google further cements its anticompetitive advantage. This is a concern shared by competitors of all sizes, from small businesses to the largest including Yelp, Twitter, Facebook and others throughout Silicon Valley.

In advertising, Google’s dominant position leaves small businesses without viable online advertising alternatives. By securing exclusive search advertising contracts with many online properties, Google limits the placement opportunities for advertising competitors. At the end of the tail, Google prohibits third-party solutions for cross-platform advertising rendering comparisons of ad performance impossible for startups and small companies. In these situations, small businesses are left with the choice of using the dominant company with the greatest inventory or a competitor that can offer much less. It’s not really a choice.

Because these issues impact small businesses the hardest, it is critical that the EU takes decisive steps to address the Google antitrust problem. Since enforcement actions can have the unintended consequence of benefiting the offending company, the best regulatory solution would involve peer-reviewed or market-tested measures. Commissioner Almunia has taken strides to incorporate these principles.

Successfully addressing Google’s competition issues will have a profoundly positive impact on innovation. It will give small businesses real choices in the online advertising marketplace while protecting their inventions from the predatory challenges of market dominant competitors.

This entry was posted on Monday, May 21st, 2012 at 11:58 am and is filed under Competition, Small Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.