Foundem confident of EU formal probe into Google

BRUSSELS (Reuters) - British price comparison website Foundem’s chief executive said it was confident EU antitrust regulators will launch a formal probe into Google’s business practices based on its complaint.

A model demonstrates a Nexus One smartphone after a news conference at Google headquarters in Mountain View, California January 5, 2010. REUTERS/Robert Galbraith

The European Commission said last month it was looking into complaints from three companies which Google identified as Foundem, French legal search engine and Microsoft-owned German price comparison site Ciao.

The Commission, which has the task of ensuring that companies do not abuse any dominant position in the 27-member community, can fine firms up to 10 percent of their revenues for violations.

“We are confident the Commission will start a formal investigation. We have a strong case of penalties (imposed by Google against Foundem),” Shivaun Raff, Foundem’s chief executive and co-founder, told Reuters in an interview.

“There are other companies being penalized. Hopefully our case will encourage them to come forward,” she said.

Raff said the world’s largest search engine imposed discriminatory penalties on Foundem that lasted three and a half years, and which led to the demotion of the site in Google’s search results.

“What we are asking for is more transparency about the criteria and rationale for penalties and for Google to introduce a more effective, transparent appeals process,” Raff said.

Google granted Foundem immunity from its search penalty in December last year.

Adam Raff, Foundem’s chief technology officer and co-founder, said regulators should also look into Google’s expansion into other markets.

“Google is leveraging its dominance in search to move into other markets. We call this bundling,” he said. He also dismissed speculation that the company, which is being assisted by Microsoft-sponsored lobbying group ICOMP in its complaint, was acting for the U.S. software company.

Foundem has never received any money from Microsoft and the U.S. software company is not a shareholder, Raff said.

Reporting by Foo Yun Chee; Editing by Rupert Winchester