Google Inc. (NASDAQ:GOOG) has been accused of becoming a “superstate” by Axel Springer one the largest media publishers in Europe. The attack was launched by Mathias Döpfner, Axel Springer’s chief executive in an open letter published in a reputable German newspaper to Eric Schmidt, Goggle’s executive Chairman. In the letter, he points out that Google has the dominant position not only in search engines but also in video, browsing, email and mobile operating systems.
Axel Springer is in an awkward position because, on one side, it is currently part of a European antitrust lawsuit against Google while on the other it is reliant on Google for internet traffic and advertising revenue. This reliance was driven home when a change made in the algorithm used by Google dropped traffic to one of its subsidiary websites by over 70%. What has enraged Döpfner is that the subsidiary in question is a competitor of Google, and he pointed out it was a bit of a coincidence that this happened.
Another bone of contention is Google’s practice of listing its own products at or near the top of any relevant web searches usually higher than their competitor even if the competitor generally gets more traffic than the Google site. Döpfner states the European Commission saying this is allowable as long as Google offers a paid advertising spot at the top of the search list is unsatisfactory and is in effect “officially sanctioning” a business model.
Döpfner’s solution for this situation is for Google to start producing search results based on transparent quantitative criteria, notifying users when changes are going to be made to the algorithm and how they will affect it.
