Italian Antitrust Authority opens an investigation on Google News Italia

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Google News comes under fire from Italian Antitrust Authority (Italy’s Monopolies and Mergers Commission as it is referred to in the UK) for abuse of a dominant position.

The Italian Federation of Newspaper Publishers (Fieg), claims that anticompetitive business practices by Google News Italia could have repercussions on the search advertising business, because choosing not to appear on Google News would lead to an exclusion from Google’s search result pages.

Why would Italian online newspapers choose not to appear on Google News?

The competition authority stressed out how important it is for websites to appear on Google search result pages in order to attract online advertising, and generate revenue. In result, these anticompetitive business practices by Google News could consolidate Google’s dominant position in internet advertising.

Fieg explains that these actions by Google will severely affect traffic towards the news sites, which will eventually decrease their value in the eyes of the advertisers. The Italian Federation of Newspaper Publishers added that Google Italy doesn’t allow publishers to choose the way in which they want their news to be used on Google’s websites.

Google’s ultimatum offers but a lose-lose situation:

• If the publisher chooses not to appear on Google News, this would mean that they would not generate traffic from Google search results either.
• On the other hand, if the publisher chooses to be on Google News, click-throughs will drop significantly.

A positive solution would benefit Google and Fieg

The quality of search results is in question: relevant Italian papers excluded from Google SERPs would only benefit Google’s competitors in the search field.

Publishing news online and attracting advertisers is the only way newspapers can survive in the digital industry. Google News doesn’t pay any fee to publish Italian newspapers’ articles and is allegedly cutting back traffic from those homepages.

Adsense revenue sharing in a newly structured Google News service could be a satisfactory solution for both parties, but as we have learned from Knol’s failure, implementing an effective system can be a challenge.

This entry was posted on Thursday, August 27th, 2009 at 3:22 pm and is filed under Media News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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