Legality of Google Policies to Restrict Competition?

One of the most frequently discussed parts of the Google AdSense Terms of Service page is the part regarding the display of ads from their competitors on the same web page.

Under UK law, could this be deemed as an uncompetitive practice? If so do Google leave themselves liable to a referral to the Competition Commission, who point out that they will receive references if they have:

I would be interested to hear soime viewpoints with regards to this, and also some insight into laws in the US and the EU governing uncompetitive practices.

I may be completely wrong and misreading something, but having gone through a couple of times, I thought I should open this to discussion.

Rob

 

Some more about UK competition law; is Google abusing its monopoly position?

 

Google is under US jurisdiction, so only US law applies.

 

Are there no US laws governing the market position of monopolies?

And is Google, by trading in the UK, and holding offices within the UK, not responsible for at least its UK activities under the UK legal system?

Rob

 

ensure these ads do not mimic Google ads


I think the keyword here is mimic. They don't want people misled by similar looking ads that google does not provide.

 

How is it uncompetitive, you have the choice to do 1 set of ads or another? The competition is over, when you decide which to put up?

 

Anti competitive in that it could be argued that it is abusing its monopoly power, by not permitting its wide network of affiliate sites to participate in its competitors programs, and thus operating against the spirit of free trade.

This isn't necessarily my opinion, I just see the argument that could be pressed and wonder how valid it is.

Rob

 

Not true, Google must comply with local laws just like any other corporation, why do you think the EU is going after Microsoft and forcing them to take media player out of the OS and fining the hell out of them.

Google needs to change this restrictive policy or webmasters are going to dump them as the CPC continues to drop.

 

Hmm last I heard G had about 35% of the search market. Does 35% make for a monopoly? There are also a number of other contextual ad programs out there so they are not a monopoly in that regard either. Maybe biggest market share but not a monopoly.

Also G isn't telling you that you can't use those other ads on your site or belong to other programs, simply that you can't use them on the same page at the same time. So you could set a randomizer and each page load decide which ads to run.

If this wasn't a rull would we see sites with three ads from each of 3 companies and have sites of almost nothing but ads? With a little clever programing you might have the ads being contextual to each other. Have a page with one word and let the ad programs fill in the rest LOL.

 

You better check your facts on paragraph two. I'm pretty certain the wording is site, not page.

 

Rob:

The comparable law in the United States is U.S. Code Title 15: Chapter 1 -- Monopolies and Combinations in Restraint of Trade.

Specifically, Subpart 14: Sale, etc., on agreement not to use goods of competitor.

From my reading of the law, I have no idea how Google can not be in violation.

 

Webmasters might sell their own ad space and so would read the first part about competing services not applying to them. So I think these part about "throughout the site" is just a catch all to say about mimic'ng the look and feel of google ads, as someone else already mentioned. IMHO of course

 

Will.Spencer has logically quoted what would seem to be controlling law on the issue, 15 USC 1, Sec. 14. It is important to note, however, that US law treats "goods" and "services" differently in legally substantive ways. My reading of the passage suggests that it controls "goods", in various forms, but not "services". (Whether something is a good or service, particularly software, can be an issue of its own - with the distinction sometimes resting in whether the item at issue was custom made or produced for general use, though I'm not sure that's the prevailing definition within anti-trust law.) And, aside from my humble observation, the annotations (list of cases applying the cited provision) show at least one case saying that the law is inapplicable to services. If I had to guess, I'd say that AdSense is a service, not a good, and therefore not controlled by the cited law.

So...Will...keep digging. If there were a similar provision addressing "services", that might be of interest. Good initial research though!

 

A monopoly (from the Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a kind of product or service.

Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.

In a monopoly a single firm is the sole provider of a product or service, and/or if they act to limit supply and to limit competition.

 

1. While a true blue US registered Corporation, I think Google is clearly bound by the law of the land where it chooses to do business. So it will be bound by, say, European Union law in Europe; and the various other countries' applicable laws in other jurisdictions.
As we saw with Microsoft, the European competion authorities have the ability to levy a fine of several million dollars a day after their due process has decided there are anti-competive practices by a company. Microsoft (as Google would) then takes a business decision: whether or not to pay the fine and change the business paractices, pay nearly as much in lawyers fees to stall the fine's implementation but carry on with their current business practices, or stop doing buiness there.
2. BTW, to contravene many countries' anti-competition laws, you don't have to be a strict Monopoly (sole supplier); just a single dominant power. You would also have to be shown to be disadvantaging the public by abusing that power by offering inferior goods, service, choice, etc.
[Of course, you could also have a share of under 50%, yet still be found part of a Cartel, where you, with a small number of other firms, effectively control a market but without a single dominant market share by any one firm, but then there would have to be some element of collusion - like price fixing, ...not intense competion between the providers.]
3. I thought this article
http://searchenginewatch.com/reports/article.php/2156451
was, pretty telling.
Once you get past the pretty pie-chart, buried down further is a Table estimatimg Googles share of "Edit Listings at 54% and of Paid Listings at 59% in the USA for March 2005, clearly an overwhelming market share. Apparently Google's market share is that high because it feeds its results to other engines, each with small individual, but noticable cummulative, market share.
4. I have for a longtime now felt that Google's Sandbox policy is a clear restraint of trade by a firm with a dominant market share. But then I would, as I am suffering because of it.
However, it doesn't much matter what I think. If there is no awareness that there is a "problem" or "issue" to be attended to outside of the relativly small number of webmasters affected, Elliott Spitzer is unlikely to be interested. Making Google "fairer" just isn't an important or pressing concern to the public or to the politicians.

I think the best chance of making Google less authoritarian and restrictive would come if it could be shown that the public good was being damaged by restricting freedom of speech - represented by its banning of new sites from appearing in its dominant engine's search results, rather than any great public compassion about stiffling new enterprises. In Google's defense, i just don't see any evidence that is happening.

 

Google's rewriting of the Competitive Ads and Services section of the Google AdSense Program Policies appears to show that they finally started to worry about Restraint of Trade legislation.

Here's the current revision of that section:

Competitive Ads and Services

In order to prevent user confusion, we do not permit Google ads or search boxes to be published on websites that also contain other ads or services formatted to use the same layout and colors as the Google ads or search boxes on that site. Although you may sell ads directly on your site, it is your responsibility to ensure these ads cannot be confused with Google ads.​