Google Inc. (GOOGL) has been asked by Germany to become more transparent by disclosing the details of its secret search algorithm. The latest demand is a part of the ongoing Google antitrust saga in Europe.
German justice minister Heiko Maas, in a bid to protect the country’s consumers, wants Google to reveal how its algorithms create search engine rankings. Per Maas, the step is necessary, given the search giant’s dominance in Europe over both consumers and market operators and impact on economic development.
Google, however, did not agree to divulge its search algorithm for competitive reasons and to prevent spammers from exploiting search results. And it’s extremely unlikely that it ever will because this is the technology what enables it to generate the bulk of its revenues.
Google’s search engine has become an integral part of people’s lives and search algorithms are Google’s most prized secrets that have enabled it to dominate the web search market. It is the source of its income and makes it the world’s best index of knowledge.
For the past five years, Europe has been trying to contain Google's clout in the web search market and Germany has been playing an active role in these efforts. Government officials have been striving to bring about major changes in the way Google carries out its business in the European Union.
As per data from independent research firms, Google’s web search market share is more than 90% in the EU as compared with 68% in the U.S. So EU thinks it’s necessary to figure out measures to ensure that the power is not abused, more so in the light of the National Security Agency (NSA) Internet surveillance scandal.
Edward Snowden’s leaked documents have exerted political pressure on Google. Other than Yahoo (YHOO), Facebook (FB) and Microsoft (MSFT), it was one of the companies to share user information with the NSA, which violated EU’s privacy rules.
In July, Google received more than 70,000 requests, involving around 250,000 EU websites, to erase personal data links from its search engine. The requests come in the wake of the Court of Justice of the European Union’s order that such individuals have the "right to be forgotten (“RTBF”). Google has been hosting meetings to determine public opinion in this regard.
Google has also been trying to settle antitrust allegations against it, but the commission has rejected Google’s proposals to settle the claims.
Google carries a Zacks Rank #3 (Hold).
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