Sep 032010
 

By AMIR EFRATI

Google Inc. said the Texas attorney general’s office is conducting an antitrust review of the Web giant’s core search-engine business, another sign of growing government scrutiny of the company.

In a blog post Friday, Don Harrison, a deputy general counsel at Google, said Texas Attorney General Greg Abbott has inquired about allegations by several small companies that Google unfairly demoted their ranking in search results or the placement of their advertisements on the search engine.

“We look forward to answering their questions because we’re confident that Google operates in the best interests of our users,” Mr. Harrison said.

Mr. Harrison said Google is sometimes asked about the fairness of the search engine and why some websites are ranked higher than others.

“Given that not every website can be at the top of the results, or even appear on the first page of our results, it’s unsurprising that some less relevant, lower quality websites will be unhappy with their ranking,” he said.

Google said the Texas attorney general was inquiring into complaints by three companies – Foundem, SourceTool and myTriggers — which have each claimed separately that Google unfairly demoted their search rankings to eliminate them as competitors.

SourceTool, a business search engine based in New York, and myTriggers, a price comparison site based in Columbus, Ohio, have filed private antitrust suits against Google. The European Commission is also conducting a preliminary inquiry into the complaint by Foundem, a British price comparison site.

In its blog post announcing the Texas inquiry, Google noted pointedly that all three of the complaining companies have links to Microsoft Corp., either because they are represented by the same attorneys or because they are part of a Microsoft-funded lobby group.

In recent years, Microsoft has actively tried to rally opposition to Google. The company has admitted helping direct the complaints of small companies that feel aggrieved by Google to antitrust authorities. But the owners of Foundem, SourceTool and myTriggers have all strongly denied that they are acting on behalf of Microsoft. Microsoft has said Google is attempting to deflect attention from its antitrust problems by pointing the finger at it.

In launching its own antitrust inquiry, the state of Texas has moved ahead of the federal agencies charged with enforcing U.S. antitrust laws: the Justice Department and Federal Trade Commission. Both agencies have conducted antitrust reviews of Google’s transactions.

The Justice Department, for example, moved to block Google’s advertising deal with rival Yahoo Inc., forcing it to abandon the deal. This year, the FTC approved Google’s $750 million purchase of mobile advertising company AdMob. But neither agency has so far launched a monopolization inquiry that targets Google’s core business of search advertising.

Write to Amir Efrati at amir.efrati@wsj.com

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