Google submits anti-trust proposals to EU

In December, the European competition commissioner Joaquin Almunia said that Google and the Commission had ‘substantially reduced’ their differences since talks began in July, but that he expected a ‘detailed commitment text’ in January. Yesterday, on the last day of January, he said that he had indeed received Google’s proposals.

At issue are complaints from other search companies that Google has used its market dominance in Europe to favor its own services in search results, copied reviews from rival websites, and made it difficult for advertisers to move their online campaigns to rival search engines. Almunia declined to comment on the Google presentation, saying only that the EC is now analyzing the proposals.

Google has faced similar accusations in the US, but on January 3 the FTC declared, “This morning... the Federal Trade Commission announced a comprehensive settlement of all of our competition related investigations into Google... Commission staff received over 9 million pages of documents from Google and other parties, interviewed numerous industry participants, and took sworn testimony of key Google executives... We closed this investigation finding that the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification.”

Although the company was cleared of ‘search bias’, it did make a number of commitments. It agreed not to scrape the content of rival websites, it will provide greater flexibility to advertisers, it will allow websites to opt out of other Google services without affecting their search ranking, and it will allow competitors reasonable access to the patents it acquired in the Motorola acquisition.

It is not thought that Google will offer the European Commission much more than it offered the FTC – but Europe is very different to the US. Firstly, Almunia may feel it necessary to be more stringent simply because Google is more dominant in Europe than it is in the US: it handles around two-thirds of internet searches in the US, but more than 90% in Europe. Secondly, European complainants have separate legal recourse if they disagree with the Commission’s ruling. Microsoft, one of the anti-trust complainants may hold back because of its own issues with the EC; but other complainants have already said they will sue the Commission if it fails to act against Google.

This puts the Commission in a difficult position. If it rules against Google, it has the power to issue a fine of up to 10% of global turnover – which could be as much as $4 billion. Google will not accept such action without a fight. But if it is thought to be too lenient on Google, then it might face action from the very European businesses it is meant to protect.

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