Google AdWords lacks transparency: French regulator

A company logo is placed on the roof of the Google building in Zurich May 25, 2010.

BRUSSELS (Reuters) - France's antitrust regulator accused Google Inc of a lack of transparency over its keyword advertising service and ordered it to clarify conditions for the product within four months.

The Autorite de la Concurrence was responding on Wednesday to a complaint filed in February by French GPS and smartphone data services company Navx, which alleged the world's top search engine had abused its dominant position by scrapping Navx's AdWords contract.

Such contracts push a paying advertiser to the top of Google search results and are at the core of its $23 billion online advertising operations.

It was not clear why the contract from Navx, whose February complaint was not announced at the time, was canceled.

"Google has implemented the content policy of its AdWords service in a way which lacks objectivity and transparency, resulting in a discriminatory treatment of speed camera database suppliers," the regulator said in a statement seen by Reuters in Brussels.

"Google's practices have suddenly and significantly affected Navx's income, but also and essentially its growth potential," it said as it granted Navx's request for interim measures.

The watchdog ordered Google Ireland and Google Inc to clarify within four months the scope and impact of the AdWords conditions applicable to devices aimed at evading traffic speed cameras and said Navx's AdWords account should be restored within five days.

POSSIBLE FINE

It told the companies to clarify over the next four months the procedures resulting in the suspension of an advertiser's account.

Google can appeal to the French courts against the interim measures. The regulator's in-depth investigation into Navx's complaint is ongoing, with the possibility of a fine against the U.S.-based company.

Google said it was confident of a positive outcome in the case. "The French authorities acknowledge Google's rights to set clear content policies to guarantee that ads are appropriate," the company said in a statement.

The complaint is not the first Google has faced in Europe over the workings of its paid-for searches.

Earlier this year Europe's highest court ruled Google did not infringe trademark law by selling keywords to trigger ads after Louis Vuitton and others said the practice undermined their brands.

The EU's Court of Justice said advertisers were free to buy keywords identical to trademarks of rivals as long as consumers were not confused on the provenance of goods and services.

(Editing by Dale Hudson and David Holmes)