Google SA faces competition trouble

Johannesburg, 01 Sept 2008

Google SA may face competition scrutiny after online search engine marketing business Entelligence filed a complaint with the Competition Commission on Friday.

Entelligence claims the local arm of the search giant is abusing its dominance in the local market.

According to a statement by Entelligence, Google SA manipulated AdWords costs on the Yellow Pages, which Entelligence currently manages. Yellow Pages Online is owned by TDS Directory operations.

"On 25 June 2008, Entelligence met with Google SA to discuss the maximisation of traffic to the Yellow Pages Web site. Clear actions were agreed upon to jointly cooperate to increase advertising performance. However, that evening Google SA edited the cost-per-click for every Yellow Pages advertisement from 60c to R2, without notifying Entelligence in advance," explains the statement.

The statement goes on to say that Google intended to pitch directly for the account with the Yellow Pages. "Google SA announced that Yellow Pages is in fact a 'named account' that they intended servicing directly as part of their greater strategy within SA."

Entelligence says even after the company engaged with Google SA on the matter, the search giant continued to pursue the business. "The managing director of TDS intervened on 14 August and sent a very clear request to the country manager of Google SA, requesting that it respect the agreement in place between TDS and Entelligence."

The company says Google is now employing a strong-arm tactic against Entelligence. "Google SA has now informed Entelligence that they will inhibit our ability to continue servicing Yellow Pages by refusing to renew our accounts held with Google and that they will prevent us from creating any new accounts in an attempt to service Yellow Pages."

The accounts used to service the Yellow Pages have reportedly been deactivated. "Entelligence estimates that Google holds at least a 90% market share of search engine traffic in SA and approximately 98% of all revenue relating to pay-per-click search advertising in SA is spent on Google and the Google Content Network."

Entelligence MD Sean Riley was not available for comment at the time of publication. Google refused to comment, saying it will only do so once the Competition Commission has ruled.