Google On The Right Track To Settle Antitrust Concerns In Europe, Says Commissioner

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It looks like a settlement is looming in a near-three year long European Union antitrust investigation into Google’s search practices. Speaking at a European Parliament event this morning, EU Competition Commissioner Joaquin Almunia said Google has improved its proposals to allay antitrust concerns, including complaints that it presents biased search results which favour its own vertical services over rivals.

“With the significant improvements on the table, I think we have the possibility to work again and seek to find an effective solution based on a decision under Article 9 of the Antitrust Regulation,” he said today, adding: “We have reached a key moment in this case.”

Other aspects of the EU antitrust prove have focused on whether Google has been copying rivals’ content, such as reviews, and incorporating it into its own offerings. And, on the advertising side, whether it is shutting out competing providers and making it too hard for advertisers to port their campaigns to other services.

On the vertical search concern, Almunia said today that Google has made “significant improvements”, noting that rivals’ links are now “significantly more visible” and have “a larger space of the Google search result page… dedicated to them”. He also flagged up that there is space for rivals to display their logo next to the link, and “a dynamic text associated to each rival link to better inform the user of its content”.

Google’s competitors had also complained about the auction mechanism used to determine which of their links were displayed in its search results. Changes to that mechanism are included in Google’s latest proposals to the Commission.

“The new proposal foresees an auction mechanism which includes the option to bid for each specific query,” noted Almunia. “This is important to also ensure that smaller specialized search operators can be displayed.”

On the complaint about appropriating others’ content, Almunia said Google has “improved the granularity of the opt-out that is offered to third party web sites”. There are also tighter measures to ensure Google cannot “retaliate” against websites that make use of the opt-out, he added.

Google has also committed to no longer include in agreements with publishers “any provisions or impose any unwritten obligations” that would require publishers to source their requirements for online search advertisements exclusively from Google in relation to queries from users in the European region. “The new proposal improves the safeguards against possible circumventions,” said Almunia.

Regarding the advertising complaint, Almunia said Google has offered to “cease to impose any written or unwritten obligations that will prevent advertisers from porting and managing search advertising campaigns across Google’s services and competing services”. He added that this new proposal also provides “stronger guarantees against circumvention”.

Almunia also flagged up as a key commitment that Google has agreed to an “independent monitoring trustee” assisting the EC in determining that the principles outlined in its proposals are being implemented.

In terms of next steps, Almunia said the Commission will work with Google on the wording of the proposed commitment text in the coming weeks, adding that he has asked Google to provide data that shows the impact of the new proposals. The EC will also send out requests for information to industry players to get feedback on the draft proposals. This informal consultation process will take the place of another formal “market test”, according to the FT.

“We know the general positions of the complainants and other stakeholders. What we need now is to receive concrete technical elements on the effectiveness of the proposed package in order to conclude whether this new proposal is satisfactory from a competition point of view,” Almunia added.

“If our investigation on this improved proposal is satisfactory, I will continue the Commitments route and end up with a formal decision next Spring. Otherwise, I will be forced to turn to a procedure under Article 7 of the Antitrust Regulation: this would mean sending a Statement of Objections to Google in the coming months, to which Google could formally respond in writing and during an Oral Hearing.”

Almunia ended his speech by reiterating that if a company does not comply with antitrust commitments the EC can impose a fine for that breach, without having to prove an infringement of antitrust rules — noting that such a fine was levied on Microsoft earlier this year, amounting to €561 million.