On 21 September 2011, the Senate Judiciary Subcommittee on Antitrust opened a hearing to look at the state of competition in online search engines.

The subcommittee is specifically looking at whether Google abuses its market position by fixing its search results to promote its own websites and services. Opening the hearing, the honourable Herb Kohl said “For the last five years or so, Google has been on an acquisition binge, acquiring dozens of Internet-related businesses, including, in health, finance, travel, and product comparison. This has transformed Google from a mere search engine into a major Internet conglomerate. And these acquisitions raise a very fundamental question – is it possible for Google to be both an unbiased search engine and at the same time own a vast portfolio of web-based products and services? Does Google’s transformation create an inherent conflict of interest which threatens to stifle competition?”

In response to the concerns raised, The executive chairman of Google, Eric Schmidt, who gave evidence before the subcommittee on 21st September, said “I can assure you we’re not cooking anything…..Google does nothing to block access to any of the competitors and other sources of information.”

When asked by the subcommittee whether Google was a monopoly company, Mr Schmidt said the search engine giant was “in that area“, adding that it recognised it had a special responsibility because of its position.

The US Federal Trade Commission (FTC) is also investigating the same competition issue and the New York Times reported that FTC officials privately debated this month whether to allow the agency’s Bureau of Competitions to issue subpoenas to Google, and the FTC is now close to moving forward with handing out the court orders. The Financial Times reportedly said that attorneys-general in California, New York and Ohio have also launched antitrust investigations into Google. US law dictates that for any breach to have occurred, an actual detriment to customers must be identified.

Closer to home, Google is also subject to an investigation by the European Commission, launched in November 2010. This followed various complaints by other search engines and companies, most notably Microsoft, all of whom allege that Google gives unfavourable treatment to their services in unpaid and sponsored search results, coupled with an alleged preferential placement of Google’s own services.

Google offers two types of search result – unpaid results that are displayed in the main body of the page and “ads” (previously called sponsored links).

The investigation will try to determine whether Google’s method of generating unpaid results adversely affects the ranking of other organisations, specifically specialist search providers, such as price comparison sites. Google argues that these sites are ranked poorly because the websites duplicate information from other sites.

Finally, the investigation is also probing how Google deals with advertising partners. It has been alleged that Google imposes exclusivity obligations on advertising partners, which Google has refuted.

Whereas an offence is only committed in the US if the authorities can establish that there has been a detriment to consumers, there is no such requirement in EU law. The European Commission will need to examine Google’s actual search algorithm and email trail to determine whether EU laws have been followed. If a breach of EU law has been committed, the European Commission can fine a company up to 10% of its annual global turnover.