Foundem’s Recent Letter to the FTC

January 3rd, 2013 No comments

On December 31 2012, Foundem co-founders Adam and Shivaun Raff wrote to the FTC’s Commissioners and investigative team. The following is an excerpt from that letter:

We first came to you in May 2010 as an innovative vertical search company that had been deterred from entering the U.S. market by Google’s anticompetitive penalty and self-preferencing practices. We are writing to you now in response to recent reports that the FTC might conclude its antitrust investigation into Google without addressing these anticompetitive search manipulations. In our view, this would be a catastrophic mistake. It is no accident that search manipulation was the issue that sparked the U.S. and European investigations; its insidious, anticompetitive impact outweighs all of Google’s other anticompetitive practices by a considerable margin. While virtually undetectable to users, Google’s search manipulations lay waste to entire classes of competitors in every sector where Google chooses to deploy them.

Foundem is the company that first brought Google’s search manipulations to the attention of regulators on both sides of the Atlantic, and it has remained engaged with the ensuing investigations throughout. From this vantage point, we are concerned that the FTC’s reluctance to litigate against these abusive practices may stem more from misconceptions about the mechanics and financial incentives underlying the abuse than from the constraints of U.S. antitrust law.

In the familiar bricks-and-mortar world, Google’s anticompetitive behaviour would have been obvious to all. But, in the unfamiliar and seemingly impenetrable world of internet search, Google’s ability to get away with these practices has often depended on its ability to confuse, obfuscate, and intimidate.

…It is difficult to conceive of an antitrust case where the stakes for U.S. consumers and businesses could be any higher. Google has been dominant in the U.S. search and search advertising markets for more than a decade, and there is no sign of this changing anytime soon. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of Americans discover, read, use, and purchase online. The importance of deciding whether or not Google is allowed to manipulate this unparalleled and virtually unlimited power to its own financial ends cannot be overstated…

Categories: Google Tags:

For Google, All Roads Lead to Remedies

September 4th, 2012 No comments

In May this year, the European Commission issued Google with a public ultimatum. Keen for a "quick resolution" to the concerns it had identified during its eighteen-month antitrust investigation into Google’s business practices, Commissioner Almunia gave Google six weeks to propose "an outline of remedies", with a view to a negotiated settlement, or else face a formal “statement of objections and [the adoption of] a decision imposing fines and remedies.”

The main concern listed by the Commission was that of search manipulation: Google manipulating its search results to promote its own secondary services while demoting or excluding those of its competitors—a practice first described in Foundem’s Complaint to the Commission in November 2009.

By the end of July, Google had conceded enough ground to convince Commissioner Almunia to “proceed with technical meetings to explore the possibility of a settlement”. Note that the settlement procedure being offered to Google (under Article 9 of the EU Antitrust Regulations) can only be used in cases where the Commission’s investigation has already concluded (albeit provisionally) that an infringement has taken place.

We have now passed a crucial tipping point. From here, there are only two possible outcomes, and both involve binding remedies—either committed to voluntarily by Google through a settlement agreement or imposed on Google by an infringement decision. While the process can switch between these two paths at any time, both lead inexorably toward binding commitments designed to end Google’s anti-competitive practices. But, there is an important difference between the two paths: an infringement decision would offer greater assistance to those seeking compensation for past damage.

Google has been remarkably successful over the last several years. Its revenues have soared from $6 billion in 2005 to $37 billion in 2011. But, unbeknownst to its shareholders, Google’s increasingly anti-competitive practices have been quietly accruing billions of dollars of antitrust liabilities. It is impossible to know how many companies have been harmed or destroyed by these practices—it could be hundreds or even thousands—but whatever the number, the consequence of abuse on a grand scale is liabilities on a grand scale.

European businesses that have been harmed by Google’s anti-competitive practices would be able to rely on a formal infringement decision by the Commission when seeking compensation through their own courts. Without an infringement decision, many of these companies (lacking the substantial body of evidence that Foundem’s case brought to regulators) might hesitate or struggle to bring civil actions.

Google needs to reach a settlement with the Commission in order to avoid the tsunami of follow-on litigation that would surely follow an infringement decision. This unspoken need to avoid a guilty verdict at virtually any cost, together with the overwhelming evidence of Google’s anti-competitive practices currently locked behind closed doors, puts the Commission in a far stronger bargaining position than many commentators realise. Anyone suggesting that Google will get away with superficial remedies (a clear and conspicuous label here, a more transparent FAQ there) is almost certainly mistaken.

Today we are publishing a proposed framework of remedies. We suggest that these remedies are reasonable, practical to implement and enforce, and go a long way toward ending many of the abusive practices identified by the Commission’s investigation.

Whatever the final form of the remedies adopted by the Commission, they are likely to have a dramatic impact on Google’s power to stack the deck in its own favour. The success or failure of Google’s secondary services, in travel search, price comparison, social networking, and so on, will once more depend on its ability to innovate, rather than on its ability to hijack the traffic of its competitors.

With the right remedies, users themselves should not see much immediate difference—just a quiet return to the Google search results of old. The richness, variety, and relevance of users’ search results will improve, and the rate of innovation in areas long suppressed by Google’s anti-competitive practices will increase. The potential for appropriate remedies to restore competition and rekindle the growth of the digital economy cannot be overestimated.

Categories: Google Tags:

Would the Real Search Neutrality Please Stand Up

June 4th, 2012 No comments

The following was first published on May 30 2012, as an Op-Ed for ORGZine (the Digital Rights magazine of the Open Rights Group)

As the gateway to the Internet for the vast majority of users, Google has unparalleled influence over which content and services people discover, read, and use. Before Google’s need for growth compelled it to look beyond horizontal search, this unfettered market power wasn’t necessarily a problem. Google tended to focus its efforts on providing the best possible search results for its users, even though that usually meant steering them to other people’s websites as quickly as possible. Starting around 2005, however, Google began to develop a significant conflicting interest—to steer users, not to other people’s services, but to its own growing stable of competing services, in price comparison, travel search, social networking, and so on.

By manipulating its search results in ways that systematically promote its own services while demoting or excluding those of its competitors, Google can exploit its gatekeeper advantage to commandeer a substantial proportion of the traffic and revenues of almost any website or industry sector it chooses. As a result, there is now a growing chasm between the enduring public perception of Google as comprehensive and impartial and the reality that it has become increasingly neither.

The debate about net neutrality has tended to focus exclusively on the issues of equal access to the physical infrastructure of the Internet (the network), while ignoring the issues of equal access to its navigational infrastructure (the search engines). If we are to protect equal access to the Internet for users, established businesses, and the innovative start-ups that will power the next wave of growth of the digital economy, we must broaden our horizons beyond network neutrality to include the equally important principle of search neutrality.

In October 2009, we defined search neutrality as the principle that search engine results should be driven by the pursuit of relevance and not skewed for commercial gain. Search neutrality is particularly pressing, because Google’s 85% share of the global search market (90% in the UK and 95% in much of Europe) places so much market power in the hands of a single US corporation. And there is ample evidence that Google is already abusing this power. Our European Competition Complaint against Google, submitted in November 2009, describes how Google leverages its overwhelming dominance of horizontal search to unprecedented and virtually unassailable advantage in adjacent sectors.

Despite being one of network neutrality’s most enthusiastic advocates, Google is fighting against the growing calls for search neutrality. In December 2009, we posed a question to Google: how can discriminatory market power be dangerous in the hands of a network provider, but somehow harmless in the hands of an overwhelmingly dominant search engine? So far, Google’s response has been evasive. Because it is difficult for Google to argue against the actual principles of search neutrality—the same principles it has long advocated for network providers—it has contrived an imaginary and fundamentally distorted version to argue against instead.

Clearly, no two search engines will produce exactly the same search results; nor should they. In many cases there is no “right” answer, and no two search engines will agree on the optimum set of search results for a given query. But any genuine pursuit of the most relevant results must, by definition, preclude any form of arbitrary discrimination. The problem for Google is that its Universal Search mechanism, which systematically promotes Google’s own services, and its increasingly heavy-handed penalty algorithms, which systematically demote or exclude Google’s rivals, are both clear examples of financially motivated arbitrary discrimination.

Despite Google’s concerted efforts to derail the search neutrality debate, by arguing vehemently against a form of search neutrality that no one is advocating, the real search neutrality has become an increasingly important focal point for those concerned about the insidious power of search engine bias. Most recently the EPP Group, Europe’s largest coalition of MEPs, declared search neutrality a core component of its Internet Strategy, and BEUC, the European Consumer Organisation, wrote an open letter calling on the European Commission to protect the principle of search neutrality.

In the traditional bricks-and-mortar world, Google’s anti-competitive practices would be obvious to all. In the seemingly impenetrable world of Internet search, however, Google’s ability to get away with these practices has often depended on its ability to bamboozle people: our video deconstructing Google’s recent testimony to the US Senate Antitrust Subcommittee provides the first public glimpse of the extent to which this strategy unravels in the face of informed scrutiny.

Google’s standard reply to the observation that it has a monopoly in search is to point out that “competition is just a click away”. But, Google operates in a two-sided market–with users on one side and websites on the other. While it is true that users have a choice of alternative search engines, the key point is that websites do not. As long as nearly all users continue to choose Google—as they have consistently done for the last decade—then businesses and websites have no alternative search engine by which to reach them.

The competitors Google is referring to when it says “competition is just a click away” are rival horizontal search engines like Yahoo and Bing, but the businesses being harmed by the anti-competitive practices described in our Complaint are not these rival horizontal search engines; they are the thousands of businesses that compete with Google’s other services—in price comparison, online video, digital mapping, news aggregation, local search, travel search, financial search, job search, property search, social networking, and so on.

The unique role that search plays in steering traffic and revenues through the global digital economy means that Google is not just a monopoly; it is probably the most powerful monopoly in history. Given the absence of healthy competition among search engines, and Google’s growing conflict of interest as it continues to expand into new services, there is an urgent need to address the principles of search neutrality through thoughtful debate, rigorous anti-trust enforcement, and perhaps very careful regulation.

Adam and Shivaun Raff,
Co-Founders of and

Categories: Google, Search Neutrality Tags:

Google Faces EC Ultimatum

May 21st, 2012 Comments off

We welcome today’s news that the European Commission has written to Google, outlining its preliminary conclusions that Google may have abused its dominant position and seeking a swift resolution to the issues it has identified. The Commission has effectively delivered an ultimatum to Google, offering the company “a matter of weeks” to propose its own remedies or else face a formal Statement of Objections and the hefty fine and imposed remedies that would almost inevitably follow.

Foundem’s Complaint, filed in November 2009 and updated in February 2010, was the first to document how Google systematically manipulates its ostensibly neutral search results to promote its own services while simultaneously demoting or excluding those of its competitors. We are pleased that the Commission has affirmed Foundem’s Complaint, listing search manipulation as its first concern.

Foundem’s goal has always been to ensure that Google exercises its extraordinary market power responsibly, by reinstating the level playing field that is required for innovation and competition to thrive. We have always emphasised the need for a swift end to Google’s anti-competitive practices, and we are pleased that the Commission is pursuing a path that could result in the particularly rapid deployment of binding remedies.

With the imposition of remedies now all but inevitable, it is crucial to devise pragmatic and robust measures that restore a healthy competitive Internet, without thwarting the ability of dominant players like Google to innovate. This will require thoughtful and nuanced consideration, and we look forward to participating in this important process.


There is a growing chasm between the enduring public perception of Google as comprehensive and impartial and the reality that it has become increasingly neither. Before Google’s need for growth compelled it to look beyond horizontal search it really could focus on fulfilling its promise to provide the best possible search results for its users, even though that usually meant steering them to other people’s websites as quickly as possible. But, starting around 2005, Google began to develop a significant conflicting interest: to steer users, not to other people’s services, but to its own growing stable of competing services.

By manipulating its search results and ad listings in ways that systematically promote its own services while demoting or excluding those of its competitors, Google can exploit its gatekeeper advantage to commandeer a substantial proportion of the traffic and revenues of virtually any website or industry sector it chooses. This power to directly cut off a competitor’s access to customers is rare in competitive relationships, and it has created the far reaching and profoundly troubling conflict of interest that lies at the heart of Foundem’s Complaint.

Foundem has spearheaded the campaign to bring Google’s anti-competitive practices to light and subject them to public and regulatory scrutiny on both sides of the Atlantic. Our evidence to the Commission included search-ranking scattergrams demonstrating the breathtaking extent of Google’s preferential treatment of its own price comparison service over its rivals, as well as traffic charts demonstrating the resultant dramatic drops in visitor numbers to Google Product Search’s leading competitors. This study was the first of its kind and probably remains the most compelling illustration of the anti-competitive power of Google’s Universal Search mechanism. US Senator Lee focused extensively on a scattergram from one of Foundem’s more recent studies during last September’s Senate Antitrust hearing into Google.

Crucially, the businesses being harmed by the anti-competitive practices described in Foundem’s Complaint are not Google’s rival horizontal search engines such as Bing or Yahoo. They are the thousands of businesses that compete with Google’s other services—in price comparison, online video, digital mapping, news aggregation, local search, travel search, job search, property search, financial search, and so on.

In the traditional bricks-and-mortar world, Google’s anti-competitive practices would have been obvious to all. In the seemingly impenetrable world of Internet search, however, Google’s ability to get away with these practices has often depended on its ability to bamboozle, deflect, and obfuscate. Behind closed doors, Google’s confuse-and-conquer strategy has been unravelling for well over a year; Foundem’s video deconstructing Google’s recent testimony to the US Senate Antitrust Subcommittee provides the first public glimpse of the extent to which this strategy crumbles in the face of informed scrutiny.

Additional Information

Categories: Google Tags:

The Google Bamboozle: Deconstructing Google’s Written Response to the Senate Antitrust Subcommittee

November 11th, 2011 No comments

Last Friday, November 4, Google Executive Chairman Eric Schmidt submitted his written response to questions posed by the Senate Antitrust Subcommittee, following his testimony before the Committee in September.

Foundem’s Video deconstructing key elements of Mr Schmidt’s testimony before the Senate Antitrust Subcommittee in September 2011 (See here for the original full-length version of this video)

In a traditional bricks and mortar world, Google’s anti-competitive practices would be obvious to all. But in the unfamiliar and seemingly impenetrable world of Internet search, these practices are often predicated on Google’s ability to bamboozle, confuse, and obfuscate.

Behind closed doors, Google’s confuse-and-conquer strategy has been unravelling for over a year. Now, Mr Schmidt’s public testimony and written answers to the Senate Antitrust Subcommittee provide the first public glimpse of the extent to which Google’s paper-thin defence crumbles in the face of informed scrutiny.

A few of Mr Schmidt’s written answers seem gratuitously evasive. Many are markedly at odds with Google’s existing documents and prior statements. And some are just plain wrong.

The significant inconsistencies and inaccuracies in Mr Schmidt’s testimony at the hearing have only been amplified by those in his written answers. Taken together, the two misleading and often contradictory accounts seem to reveal a company beginning to sense that it has already lost the argument.

We suggest that our recent video (above), which deconstructs several key elements of Mr Schmidt’s testimony, is essential viewing for anyone wanting a better insight into some of the breathtaking semantic acrobatics of Mr Schmidt’s testimony and written responses.

The following are just two examples of Mr Schmidt’s problematic written answers following the hearing:

Is Google Product Search a Price Comparison Service?

During the hearing, Senator Lee referred extensively to a Foundem study examining the comparative Google rankings of the US’s leading price comparison services, including Google’s own Google Product Search. In the hearing, Mr Schmidt ducked several of Senator Lee’s questions about the troubling findings of this study with the bizarre claim that Google Product Search is not a price comparison service.

In our blog post immediately following the hearing we demonstrated the fallacy of this claim with evidence that included a screenshot of Google’s own description of Google Product Search as a “price comparison service”.

Senator Lee’s post-hearing follow-up question:

On September 28, 2011, a search query on Google for “UK product search” returned Google Product Search as the first result, described as “Google’s UK price comparison service.”
Is Google Product Search a price comparison service?

Mr Schmidt’s written response:

Google product search is a type of thematic search that allows consumers to compare prices and see which websites are selling a particular product.

In other words, “Yes.”  As Mr Schmidt will be aware, all price comparison services can be described as “a type of thematic search that allows consumers to compare prices and see which websites are selling a particular product.”

It is difficult to understand how Mr Schmidt could have been so confused about this straightforward point during his original testimony. Google’s systematic favouring of its own price comparison service through Universal Search is an issue that has been central to formal antitrust investigations on both sides of the Atlantic for well over a year.

Does Google Favour its Own Services?

Although Mr Schmidt now concedes that Google Product Search is in fact a price comparison service, his written answers duck many of the same questions again – but this time by claiming that Google Product Search and other specialised Google services are not in fact “services”.

Senator Lee’s post-hearing follow-up question:

Are Google products and services subject to the same search-ranking algorithmic process as all other organic search results?

Mr Schmidt’s written response:

…what is crucial to understand is that thematic search results are not separate “products and services” from Google…Because of this, the question of whether we “favor” our “products and services” is based on an inaccurate premise. These universal search results are our search service—they are not some separate “Google content” that can be “favored.”…

Even if this were true, it would make no difference to the correct answer to the question. Whether Google Product Search, Google Maps, Google News, Google Places, Google Travel, Google Finance, and so on, are considered “services”, “products”, “off-shoots”, “sub-sections”, “sub-categories”, “thematic collections of search results”, “bananas”, or “hoojamaflips” makes no difference; as long as Google owns them, and profits from driving traffic to their pages, then what Google now chooses to call them is entirely irrelevant.

But of course, it isn’t true. Because these Google services are in fact “services”, no one should be surprised to learn that Google has consistently and repeatedly referred to them as such in all manner of places and circumstances. For example:

“The Google Product Search service is provided AS IS and Google expressly disclaims to the fullest extent permitted by law all express, implied, and statutory warranties regarding the information included therein. Under no circumstances shall Google be liable to any user on account of their use, misuse, or reliance on the Google Product Search service.“

Google’s About Google Product Search page, as of November 8 2011


“The Google Maps service includes search results such as business listings, images, and related information provided by third parties.”

Google’s Terms of Service for Google Maps, as of November 8 2011

Even Search Engine Land (which many have accused of being fervently pro-Google) was moved to take issue with Mr Schmidt’s claim:

“Google most certainly does have separate products and services, despite what Schmidt repeatedly told Congress today. It’s disingenuous, at best, for him to claim that YouTube, Google Maps, Google News and other Google products that appear as universal search results aren’t actually separate products. They are.”

Search Engine Land, November 4 2011

Unfortunately, Mr Schmidt repeatedly restates this claim to avoid answering several of Senator Lee’s related, post-hearing questions. For example:

Senator Lee:

Does Google display Google [Product Search] results within its natural search results without any label identifying them as Google results or as otherwise distinct from true “search results”?

Mr Schmidt:

As stated in my response to Question 1, universal search results are not separate “products and services”; they are our “true” results.


Senator Lee:

What has Google done to let its users know that its natural search algorithm gives preference to Google’s own products and services?

Mr Schmidt:

As described in my response to Question 1 above, I believe that the premise of this question is incorrect.

We suspect that, in time, Google will reflect on this period with a sense of shame and regret.

If Google can justify promoting its own services through Universal Search while demoting its competitors for the lack-of-original-content that is a defining characteristic of all search services, then why does it not simply stand up and say so?

We are quite certain this is a debate Google will ultimately lose. But it is a debate that should have started two years ago. It is time for Google to come clean and start arguing its position based on facts rather than on forever shifting fiction.

Categories: Foundem Tags:

Annotated Highlights of the Senate Antitrust Hearing into Google

October 31st, 2011 No comments

Following on from our earlier posts around last month’s US Senate Antitrust hearing into Google, this video, comprising annotated highlights of the hearing, is intended to provide some background and insights into the more important inaccuracies and inconsistencies of Mr Schmidt’s testimony:

Categories: Foundem Tags:

Fact-Check Follow-Up

September 22nd, 2011 No comments

Some of Senator Lee’s questioning in yesterday’s hearing centred around a study conducted by Foundem in April this year. This study of Google’s US search rankings for hundreds of product- and product-price-comparison-related search terms was a follow-up to Foundem’s earlier study of Google’s UK search results (included in Foundem’s submission to the FCC and in Foundem’s EU Antitrust Complaint filed last year). The graphical output of this study demonstrates the breathtaking extent to which Google’s Universal Search mechanism consistently places Google’s own price comparison service at or near the top of nearly all product- and product-price-comparison related searches.

Foundem’s contention – which is based on Google’s own descriptions of its Universal Search mechanism – is that Google uses different algorithms and relevance signals to rank its own services than it does to rank everyone else’s.  Because Google applies a different standard to its own services than to everyone else’s, Google can systematically favour its own services to whatever extent it chooses.

Many of Mr Schmidt’s answers to Senator Lee’s probing questions on this subject seemed to hinge on the surprising assertion that Mr Schmidt does not consider Google Product Search to be a price comparison service:

“There’s a conflation of two different things going on in this study…there’s a difference between sites that do product comparison and sites that offer products themselves. Google Product Search is about getting you to a product, and so we tend to look for the product as opposed to the product comparison in this particular case. Which is why the product is more highly ranked than the result of a product comparison site. If you did the same study with all of the other product sites you would find a very different result.

…Things like the companies that are mentioned there are price comparison shopping; they are different animals if you will. They are important, but they do different things. Google Product Search is about searching for specific products. In that sense Product Search does something similar to what PriceGrabber, Nextag and Shopper does, which is why the confusion exists. … It’s an apples to oranges comparison.”

Eric Schmidt, September 21 2011

In our earlier blog post we pointed out that this assertion raises an obvious question: namely, if Google Product Search isn’t a price comparison service, why does Google consistently insert this service at or near the top of the vast majority of Google’s price-comparison-related search results?

But more importantly, Google Product Search is a price comparison service. The following screenshot (taken this morning) shows that Google itself describes Google Product Search as a price comparison service (as does Wikipedia and ComScore):

Mr Schmidt also downplayed the anticompetitive impact of Google’s preferential treatment for Google Product Search (and other services) by suggesting that the inserted links were merely links to vendor sites, not to Google’s own service.  But this is not the case.

The following screenshot, for example, shows a Universal Search result for Google Product Search similar to the one featured in the screenshot from yesterday’s hearing.  In this example, and in the one from yesterday’s hearing, all four of the featured links are links to Google’s own Product Search service, not to vendors:

Categories: Foundem Tags:

A Quick Fact-Check on Some of Mr Schmidt’s Testimony Before the Senate Antitrust Sub-Committee

September 21st, 2011 No comments

The Senate Antitrust Sub-Committee used one of Foundem’s scattergram graphs in its hearing earlier today. Senator Lee asked Mr Schmidt a few questions around the data. We believe that Mr Schmidt’s answers may have been misleading in several ways.  For example:

  • Mr Schmidt suggested that the data was comparing "apples to oranges". Mr Schmidt implied that Google Product Search is some kind of "product search", not some kind of price comparison service. This is strange. Most people would consider Google Product Search to be a price comparison service. We wonder what Mr Schmidt would consider to be Google Product Search’s competitors, if not price comparison services?
  • Also, if Google Product Search is not a price comparison service, then it begs the important question: why did Google Product Search show up so consistently at or near the top of Google’s search results for the hundreds of product-price-comparison-related queries shown in Foundem’s graph? Why does Google’s Universal Search mechanism so consistently place Google Product Search at or near the top of most price-comparison-related searches, if Google Product Search is not a price comparison service? For example, hundreds of the data points shown in Foundem’s graph were for queries of the form: "compare prices [MAKE MODEL]" and "best prices [MAKE MODEL]".
  • Mr Schmidt also suggested that if a user clicked on these prominently placed Google Product Search links it would merely take them to a vendor site. This is not true in most cases. In the vast majority of cases a click on these links takes users to Google Product Search – Google’s own ad-supported service – not to a vendor.

The data in the above chart was collected on April 15 2011.  Some examples of the 650 product- and product-price-comparison-related searches illustrated include: “Canon PowerShot S95”, “best prices Canon PowerShot S95”, “compare prices Canon PowerShot S95”, “Canon PowerShot S95 prices”, and so on for a wide variety of products.

For a more complete description of some of Foundem’s analysis and arguments around the anti-competitive power of Google’s Universal Search mechanism, see our comment to the FCC.

And, for our latest thoughts on some of the issues underpinning the current antitrust investigations into Google, please see our recent article, "Penalties, Self-Preferencing, and Panda: Why Google’s Behaviour Makes Antitrust Sanctions Inevitable".

Categories: Foundem Tags:

Debunking Google’s “Original Content” Mantras

January 31st, 2011 No comments

We note with interest Google’s recent announcement that it has changed its search algorithms to further target “sites that copy others’ content and sites with low levels of original content” (Matt Cutts, Google’s Head of Search Quality, 28 January 2011)

Is this simply a commendable attempt to punish spam and reward the authors of original content, or does it mark an escalation in Google’s ongoing disadvantaging of rival vertical search services?

Google recently used similar language to try to justify Foundem’s three year exclusion from Google’s search results:

Google says it "de-indexed" [Foundem] because much of its content – about 87% – was copied from other sites, which it says leads to automatic downgrading in its search results. (The Guardian, 30 November 2010)

But, as Google is well aware, copying, organising, and presenting the content of others is a defining characteristic of any search service, including Google’s own.

The following extract from Foundem’s submission to the European Commission speaks to the heart of this issue:

Google – the Godfather of Spam?


The Original Content Fallacy

Google tends to emphasise the value of content, while downplaying the value of service. Its “original content” mantras are convenient for Google, first, because Google requires 3rd party content to hang its ads on, and second, because these mantras help to foster the view that rival search services have little inherent value.

Accusing a search service of having little or no original content is like accusing a library of not writing its own books. While accurate, it is clearly missing the point of the valuable service that a library provides. Besides, the same accusation can be levelled at Google. But when KinderStart did just that in 2006, Google’s attorneys objected vigorously:

“According to KinderStart, Google’s search results function solely to link a user to third party websites and contain no original content. But Google’s search results are original content, expressing Google’s opinion of the relative significance of websites”, Google Attorneys, 2006[1].

Clearly, exactly the same argument applies to Foundem or any other legitimate search service. Moreover, by gathering all of the relevant information about a product, flight, house, or job from dozens of suppliers and presenting it all on one sortable and filterable page, any high-quality vertical search site clearly provides a valuable service, whether or not it authors any original content of its own.

Google’s relentless obsession with original content—whether feigned or genuine—has serious consequences:

· It inevitably leads to cases like Foundem’s, where the appeals of an unjustly penalised search service can be repeatedly ignored by a succession of Google employees—all indoctrinated with the false belief that only original authored content adds value.

· It encourages legitimate sites to overreach their area of expertise to write ‘fake’ reviews, ‘fake’ buying guides, and ‘fake’ blog posts, in the pursuit of this Google-mandated original content. To the uninitiated, this may sound like crazy talk (surely this fakery is rare), but the production of essentially ‘fake’ content and the acquisition of essentially ‘fake’ natural links has become the mainstay of mainstream SEO.

Google is Conflicted about Web Spam

Another unfortunate consequence of Google’s increasingly relentless focus on content over service is the proliferation of Web spam.

Thirty percent of Google’s revenues come from its AdSense programme[2], which extends the reach of its advertising network across millions of third party websites and has played a crucial role in Google’s meteoric growth. AdSense allows any site (spam included) to efficiently monetise its traffic by simply copying and pasting a few lines of JavaScript. This ease of integration, coupled with the fact that Google does little to vet its AdSense publishers, has made AdSense one of the driving forces behind the explosion of Web spam. So much so, that the acronym MFA (Made-for-AdSense) was coined to describe the millions of spam sites, comprising “original” but low-quality content, that are thrown up every year simply as vehicles for Google ads.

“If Google wants to organize the world’s information they shouldn’t fund a large portion of the world’s information pollution.” (Aaron Wall, November 14 2007[3])

It is important to realise that Google has a serious conflict of interest with these Made-for-AdSense spam sites, because it has a substantial stake in their revenues.

It is also worth noting that Affiliate marketing is one of the few viable alternatives to AdSense as a means of monetising Web sites. Most sites looking to monetise their traffic can choose between revenue-bearing AdSense ads or revenue-bearing Affiliate marketing links. Currently, both methods are used by legitimate and illegitimate sites alike.

Despite Made-for-AdSense spam sites outnumbering thin-affiliate spam sites by some considerable margin, Google harps on relentlessly about “thin-affiliate” sites but barely mentions the far more prevalent problem of Made-for-AdSense sites.

Google is Also Conflicted about the Quality of its Own Search Results

The vast majority of Google’s revenues come from users clicking on the sponsored links to the right and above Google’s search results[4]. But users don’t go to Google for its sponsored links.

Users only really look to sponsored links when their search results don’t have what they’re looking for. For any ostensibly free search engine, there is an inevitable tension between the need to produce good enough search results to attract users and the need to ensure they are bad enough that users regularly resort to clicking on the sponsored links to find what they are looking for.

If Google’s search results were perfect, its revenues would plummet. It is inconceivable that this inconvenient truth has not occurred to Google’s strategists. It is therefore sensible to question Google’s motives whenever it claims that preserving the quality of its search results is its top priority.

Google tries to characterise its business model as somehow purer than that of vertical search because it does not earn revenues directly from its organic results. The reality may be quite the opposite. There is something inherently peculiar about a business model that is characterised by the need to be good but not too good. And this, of course, is hugely exacerbated by the distinct and persistent lack of healthy competition among horizontal search engines.

- Foundem EU Submission, August 2010

Debunking Google’s Search-Within-Search Fallacy

“Google is a search engine. A search engine’s job is to point you to destination sites that have the information you are seeking, not to send you to other search engines”.
(Danny Sullivan, The Incredible Stupidity Of Investigating Google For Acting Like A Search Engine, Search Engine Land, 30 November 2010[5])

This spurious argument is never far away when Google (or its unofficial spokespeople) are defending Google’s disadvantaging of rival vertical search services.

The following extract from Foundem’s submission to the European Commission addresses this issue:

Of course, horizontal search engine results like Google’s should not feature the search results of other horizontal search engines. It would be a recursive nightmare, for example, if Google featured Bing, which featured Google, which featured Bing, and so on. Fortunately, this scenario is as unlikely as it is undesirable.

The real question is whether horizontal search engines like Google should feature results from vertical search and price comparison services. The answer is clearly ‘yes’, first, because they can, and second, because users routinely search for these services on horizontal search engines. For a horizontal search engine to deliberately exclude these services would be to deliberately frustrate many of its users.

Indeed, by routinely inserting its own vertical search services into prominent positions in its Web results through Universal Search, Google now emphatically endorses the view that vertical search and price comparison services are often exactly what its users are looking for.

- Foundem EU Submission, August 2010

In conclusion, original authored content is not a legitimate requirement for a search service. Search services such as Google and Foundem are not intended to provide this kind of original content; they are intended to efficiently search and summarise the content of others. Yet, according to Google, it penalised Foundem for allegedly failing to meet this spurious requirement – a requirement that none of Google’s own search services fulfil. The notion that Google can penalise a search service for a lack of original authored content has very serious anti-competitive implications for the future of innovation in search.

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Foundem is Nobody’s Puppet

March 8th, 2010 No comments

The questions journalists have been asking Foundem over the last week or so suggest that Google is working behind the scenes to portray Foundem as some kind of Microsoft puppet.

Here we set the record straight by outlining how Foundem came to file a formal complaint against Google with the European Commission.

About Foundem

Foundem is a small, innovative UK technology company founded in 2005. Its husband and wife co-founders, Adam and Shivaun Raff, had an idea that they hoped could transform vertical search from a bespoke, niche-by-niche, task into a broad, scalable, niche-independent one. After graduating from Edinburgh University with a degree in computer science, Adam had 15 years experience at the leading edge of High-Performance Computing—first with Supercomputer pioneers Cray Research and later with the European Centre for Medium-Range Weather Forecasts. After graduating from King’s College London with a degree in computer science with physics, Shivaun had 15 years experience managing complex software development projects for a number of blue-chip companies. Their combined training and experience allowed Foundem to progress rapidly from a patented idea, to a fully developed technology, and finally to a competition-beating service—all with just one additional developer.

Foundem’s unique technology allows it to compete across a broad spectrum of verticals, including product price comparison and travel search, with just a tiny fraction of the resources of its competitors. In December 2008, for example, The Gadget Show, the UK’s leading technology television program, tested the UK’s twelve leading price comparison sites and named Foundem the best. In September 2009, the UK’s leading consumer body, Which?, tested the UK’s leading flight search engines and placed Foundem third (the American travel search specialist Kayak placed eighth).

Now that Foundem has emerged from its three-and-a-half-year Google search penalty, it can once again focus on ensuring that its technology fulfils its potential to deliver far more comprehensive vertical search to a far broader array of verticals than is currently possible using traditional methods.

The Chronology

Much has been made of Foundem’s membership of ICOMP (the Initiative for a Competitive Online Marketplace—a trade association sponsored by Microsoft).

Foundem’s Google penalties, and its ensuing campaign to have them overturned, started two-and-a-half-years before Foundem had even heard about ICOMP:

June 2006

Foundem’s Google search penalty begins. Foundem starts an arduous campaign to have the penalty lifted.

August 2006

Foundem’s AdWord penalty begins. Foundem starts an arduous campaign to have the penalty lifted.

August 2007

Teleconference with Google AdWords Quality Team representative.

September 2007

Foundem is “whitelisted” for AdWords (i.e. Google manually grants Foundem immunity from its AdWords penalty).

January 2009

Foundem starts “public” campaign to raise awareness of this new breed of penalty and manual whitelisting.

April 2009

First meeting with ICOMP.

October 2009

Teleconference with Google Search Quality Team representative, beginning a detailed dialogue between Foundem and Google.

December 2009

Foundem is “whitelisted” for Google natural search (i.e. Google manually grants Foundem immunity from its search penalty).

Foundem has never received any money from Microsoft, and Microsoft does not own any of Foundem’s shares.

Throughout Foundem’s protracted campaign to have its Google AdWord and Search penalties lifted, it acted entirely independently and on its own. In addition, Foundem’s initiative, its op-ed in the New York Times, and the research and arguments comprising Foundem’s Universal Search FCC filing were all entirely conceived and implemented by Foundem alone.

Since Foundem’s first meeting with ICOMP in April 2009, ICOMP has been of invaluable assistance to Foundem in three areas. First, it provided opportunities to meet others with similar experiences, as well as with European regulators and policymakers. Second, it provided insight and assistance in the production and framing of the legal components of Foundem’s European complaint. Third, it provided emergency PR support during the recent Google-induced media maelstrom. Without ICOMP’s superb support team, calmly fielding dozens of requests for comment and queuing up seemingly endless press interviews, we would very probably have drowned.

In summary, it is highly misleading to suggest that Microsoft (or ICOMP) initiated or in any way controlled Foundem’s European complaint or any of Foundem’s other initiatives.

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