June 6, 2019 / 1:26 PM / 19 days ago

Google's German jobs product anti-competitive, says Springer unit

* Google for Jobs grabs overnight market lead in Germany

* Springer's Stepstone unit has complained to European Commission

* Google threatens Springer's digital classifieds growth plans

* Berlin publisher in talks with KKR to take company private

By Klaus Lauer and Douglas Busvine

BERLIN/FRANKFURT, June 6 (Reuters) - A leading German jobs portal hit out on Thursday at Google's launch of its own job-search product in Europe's largest economy, saying the U.S. company had abused its dominant position to grab an overnight market lead.

Stepstone, owned by publisher Axel Springer, said the number of inquiries it was receiving via the world's leading search engine had declined since Google for Jobs went live in late May.

The potential hit to Springer's jobs arm, which accounted for more than a quarter of first-quarter core profits, threatens its strategy of growing its digital classifieds business to offset weakness in its legacy media titles.

The Berlin publisher is also currently holding talks with U.S. private equity investor KKR with an option to take the company private under discussion.

A spokesman for Stepstone confirmed it filed a complaint to the European Commission last year, ahead of the launch of Google for Jobs, saying Google would give prominence to its own jobs aggregator when displaying search results.

"This is happening through (Google's) market power. We consider this to be anti-competitive," the Stepstone spokesman said on Thursday.

Google, the main operating unit of Alphabet, and other Silicon Valley titans are already facing heightened scrutiny in the United States.

The U.S. Justice Department is preparing an investigation to determine whether Google broke antitrust law by preferring its own products in search results, unfairly sidelining third-parties who stand to lose out by effectively becoming invisible to internet users..

In Europe, the company has been hit by a series of multi-billion-dollar antitrust penalties, most recently a 1.49 billion euro ($1.7 billion) fine for bias in the brokering of search ads.

Google's Berlin-based spokesman did not respond to calls and an email seeking comment.

OPTIMISED

Sistrix, a company specialising in search engine optimisation, says Google for Jobs became the leader in German jobs searches immediately after its launch.

A typical jobs search typed into a Google browser window returns three top 'hits', with links to results from other portals pushed lower down the page, Sistrix's Johannes Beus said in a blog post here

While Stepstone has compensated for the loss of traffic from Google by using social media and other marketing channels, smaller portals could be harder hit, the spokesman said.

Analyst Sarah Simon at Berenberg Bank said the displacement of Stepstone, which has not partnered with Google, could undermine its pricing power with employers because it will not be able to guarantee the same visibility to job seekers.

"With KKR examining the potential to take a strategic stake in Axel Springer, there is clearly some support for the shares," said Berenberg's Simon, who has a hold rating on Springer stock. "However, should that interest fail to materialise, we see further downside."

Springer shares were unchanged in afternoon trading in Frankfurt at 55.45 euros, around the level reached last week when they jumped 20% on news of the KKR talks.

$1 = 0.8906 euros Writing by Douglas Busvine; Editing by Kirsten Donovan

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