Saturday, May 17th
  • About MoonProject
  • Advertise at MoonProject
  • Sponsored Guest Posts
  • Contact Us
  • Terms and Conditions
  • Apps

MoonProject

  • Home
  • Categories
    • Art
    • Business and Employment
      • Finance
    • Book Reviews
    • Cars
    • Cooking
      • Food
    • Current Affairs
    • Dating/Relationships
    • Fashion & Style
    • Education
      • History
      • University
    • Entertainment
    • Environment
      • Animals
    • Film
      • Reviews
    • Health & Beauty
    • Lifestyle
    • Miscellaneous
      • Fiction
      • Free Giveaways
    • Music
      • Reviews
    • Politics
    • Popular Culture
      • Celebrity
      • Shopping
    • Religion
      • Philosophy
      • Spirituality/Psychology
    • Science
      • Health
    • Sport
    • Technology
      • Apps
      • Gadgets
      • Gaming
      • Internet
    • Television
    • Travel and Places
  • Submit an Article
  • About MoonProject
  • Advertising
  • Login
  • Register
MoonProject Latest: Interested in reviewing restaurants, hotels or travel destinations? For everything 'Hospitality' visit EatSleepTravel.co.uk
You are here: Home » Business and Employment » Predatory pricing

Predatory pricing

July 5, 2012 2:08 pm

The holiday review website Trip Advisor has joined a growing number of internet companies that are complaining to the European Commission about US web giant Google. Trip Advisor belongs now to a group of 12 companies – among them the popular travel firm Expedia – that accuse Google of abusing its dominant market position on the European search engine market, a claim that is currently being investigated by the European Commission.

The companies say Google’s methods are anti-competitive and unfair, since the US search engine offers its users two sorts of search results: unpaid results based on Google’s algorithms and displayed in the main body of the page, and ‘ads’, also known as ‘sponsored links’, which are being paid for and which are displayed on the right side of the page. The essence of the investigation is whether Google is using its search engine to direct users to its own services and to reduce the visibility of competing websites and services, according to the information obtained from Schure Consulting. The investigation looks into whether the company’s system of generating unpaid results unfavorably affects the ranking of other websites, in particular those who offer services that are in direct competition with some of Google’s products.

For example, Expedia claims Google’s flight search services, ­ which were launched in September 2011, exclude any links to online travel agencies. The European Commission received the first complaints about Google in February 2010, when the small French search engine eJustice.fr and the UK-based website Foundem contacted the European Commission in Brussels, Belgium. A number of other web businesses followed and in November 2011 the European Commission decided to investigate the claims. In the US, Google is under a similar investigation; a Senate subcommittee and the Federal Trade Commission are looking into whether the web giant is abusing its market position.

It is expected that EU Commissioner Joaquin Almunia will make a decision within weeks over whether to formally charge Google. Almunia will undoubtedly look at a recent court ruling in France. On 30 January, a French court ordered Google to pay damages of €500,000 for abuse of its dominant position, compensating for losses caused by Google’s policy of providing companies access to Google Maps, its online mapping service, for free.

Both the European Union and French competition law prohibit a company that holds a dominant position on a relevant market from abusing that position. Prohibited abuses include offering products at a price that is below their cost of production (known as ‘predatory pricing’), unless this can be objectively justified. It is not unlikely that Almunia will follow the French arguments and will partly base his decision on the ‘predatory pricing’ principle. After all, Google is offering many of its products free of charge and it is estimated that the company controls 90% of Europe’s search traffic. Since the latest French ruling, it is not surprising many smaller web companies are eagerly awaiting the Commission’s decision, especially because they remember what happened to computer giant Microsoft, which faced similar charges, in March 2004: the EU ordered Microsoft to pay £381 million, the largest fine ever handed out by the EU to one single company. So far.

Tags: EU European Commission expedia google google advertising google algorithm internet Microsoft price fixing search engine trip advisor US
  • Tweet
Author: Michiel Willems Dutchman Michiel Willems LLM MA is based in central London as an international journalist in broadcast and print, specialised in UK current affairs, e-commerce, finance, business and legal news. Michiel studied law and journalism in the Netherlands and the United Kingdom and after gaining experience in Malaysia and India he returned to London in 2008 to embark on a career in writing and reporting. With global study and work experience and an open mind, he currently works in central London as an associate editor, writer, voice over professional and radio reporter. Michiel has developed a great interest in the facts behind the headlines, the stories behind the statistics and the people behind the news. His specialties are writing news stories, features, editorial comments, catchy standfirsts, drop quotes, captions, headers and headlines, commissioning, editing, conducting interviews, managing publications’ flatplans, radio reporting and gathering large amounts of information within a relatively small amount of time. Michiel usually approaches a story from an original, relevant angle and likes to come up with fresh ideas for news stories and in-depth features. He speaks to a wide number of sources across the political, financial, business, legal and e-commerce sectors on a daily basis. Michiel has a broad network of contacts, in the UK as well as overseas, mainly consisting of bankers, lawyers, lobbyists, consultants, entrepreneurs, payment processors, regulators, trade associations, policymakers and politicians.

Like our Facebook Page

Follow Us On Instagram:

[instagram-feed]

Donate

MoonProject needs your donations to keep editing and publishing free of charge. Every little helps!

MoonProject

  • Top Authors
  • Contact Us
  • Advertise at MoonProject
  • Sponsored Guest Posts
  • Categories
  • Submit an Article
  • About MoonProject
  • Terms and Conditions
  • About MoonProject
  • Advertise at MoonProject
  • Sponsored Guest Posts
  • Contact Us
  • Terms and Conditions
  • Apps
search:
© Copyright 2025 — MoonProject. All Rights Reserved Designed by WPZOOM
  • Adventist Youth Agreement