German watchdog opens inquiry against Google

Jan 19, 2010, 16:52 GMT

Bonn, Germany - German regulators opened a formal inquiry into Google Tuesday after a complaint by Ciao, a shopping community website owned by Microsoft, against the US web search giant.

But the regulators in Bonn had no word on anti-Google complaints by German newspaper owners.

Ciao has been trying to renegotiate its own contract with Google and told the Federal Cartel Office it believed that Google's powers under the existing contract went beyond German law.

Subsequently, Ciao contended that Google had called off the renegotiation talks in retaliation for the complaint to the Cartel Office.

A Cartel Office spokesman confirmed a formal inquiry had been opened because of the latter charge. He said German law forbade any retaliatory action causing economic harm to those laying complaints.

'If it's true, it can be punished,' he said.

Reports say Microsoft is upset at the way Google handles money transactions with Ciao involving Adsense, a Google-managed web mechanism which charges retailers for advertising.

Separately, Google says German newspaper and magazine publishers have written to the Federal Cartel Office demanding that the US company disclose how it ranks news search results and accusing Google of abusing market dominance.

The publishers have not made the complaints public. The Cartel Office said Monday it had asked Google to comment, but had not yet decided if this complaint would trigger a formal inquiry.

Sources say the publishers are concerned that Google may help certain websites score more page views, thus helping them to earn more from online advertising.