Google Dodges EU Antitrust Bullet

The European Commission has accepted Google’s latest proposal to settle a probe of its practices pending agreement with the 125 companies and organizations that filed complaints against the Internet giant.

Google last week made its third settlement offer, following a warning from the Commission on Jan. 15 that it would take action if the issue were not resolved soon.

The proposal addresses all four areas the EC’s head of competition policy, Joaquin Almunia, has outlined: hijacking of search results; use of original content from third party sites; preventing content publishers from showing competitors’ ads on websites using Google Ads; and the use of contracts to prevent clients from exporting search advertising campaigns run on Google to competitors’ platforms.

The proposal “can now address the Commission’s concerns,” as it provides users with “real choice between competing services presented in a comparable way,” Alumina said.

“We will be making significant changes to the way Google operates in Europe,” Google General Counsel Kent Walker told the E-Commerce Times. “We have been working with the European Commission to address issues they raised and look forward to resolving this matter.”

What Google Has Promised

Google will guarantee that when it promotes its own specialized search services on its Web page, the services of three rivals, selected through an objective method, also will be displayed in a way that’s clearly visible to users and comparable to the way in which it displays its own services, according to the EC.

If someone in Europe searches on Google for hotels, for example, Google will give equal prominence to its own search results and those of three competitors.

Google already has made “significant concessions” on the Commission’s other concerns, the EC said. It will let content providers opt out of Google’s use of their content in its specialized search services without a penalty. It will remove exclusivity requirements in agreements with publishers for providing search ads. Google also will remove restrictions on letting search ad campaigns run on competing search ad platforms.

These commitments will cover the European Economic Area for the next five years, the EC said. An independent monitoring trustee will supervise Google’s compliance with the commitments.

“Five years is a long time in the tech industry,” Mukul Krishna, senior global director of digital media at Frost & Sullivan, told the E-Commerce Times. “Alumina has kicked the can down the road. Five years later, this is probably going to be a non-issue, and that’s what he’s counting on.”

Fear, Loathing and General Disaffection

“Microsoft is going to be pissed off, and I can understand how upset it would be, considering Google basically got a rap on the knuckles and is getting away with stuff that Microsoft couldn’t,” Frost’s Krishna said. “They had a lynch mob after them in Europe.”

Microsoft repeatedly has filed antitrust complaints against Google, including two just last year.

In August, David Howard, head of Microsoft’s litigation and antitrust division, complained that Google was blocking Windows Phone users from its YouTube app.

In December, one of Microsoft’s front organizations, the Initiative for a Competitive Online Marketplace, joined with other Google competitors to commission an eye-tracking study by the German Sports University of Cologne.

Researchers found that Google’s sponsored results consistently attracted the bulk of users’ visual attention, while alternative search sites did not draw enough visual attention to attract users.

FairSearch.org, whose members include Microsoft, Travelocity, TripAdvisor and other competitors battling Google in Europe, has blasted the latest Google proposal as “worse than doing nothing.”

What Happens Next

The EC next will reach out to the complainants against Google for comment.

They are likely to object, Frost’s Krishna speculated.

“Nobody in their position would say they’re happy,” he pointed out. “They want Google to hurt because that increases their chances of competing with it.”