Google Tries to Stave Off EU Antitrust Fines Regarding Search

By Peter Bernstein April 12, 2013

The European Union, as highlighted in the last few days, has been ground zero for interest in Google’s alleged antitrust practices. This week saw the complaint by the Microsoft and Oracle led FairSearch group’s expansion of its attempts to have regulators reign in Google in Europe by having the European Commission (EC) look at what they claim is Google’s predatory practices that come from illegal leveraging of its Android OS dominance. 

Now comes word that looking to avoid fines that could total $5 billion (based on whatever turns out to be 10 percent of Google’s 2012 revenue), Google has provided the EC with an offer it hopes it can’t refuse, in order to avoid being found guilty of leveraging its 80-percent share of the European search market and having to pay up.  

This is not the first time Google has offered proposals that could put an end to the EC’s investigation which started in November 2010. It offered some preliminary suggestions in January, and according to various reports, has made a formal offer after fine-tuning its proposals based on talks it has been have with the EU’s antitrust authority.

Antoine Colombani, the EC’s spokesman on competition policy, stated that, "In the last few weeks, the Commission completed its preliminary assessment formally setting out its concerns. On this basis, Google then made a formal submission of commitments to the Commission…We are now preparing the launch of a market test to seek feedback from market players, including complainants, on these commitment proposals."

He did not divulge the commitment details.

It should also be noted that speaking in Washington, D.C., this week, EU Competition Commissioner Joaquin Almunia, highly visible in stating his concerns about Google activities in Europe, said, "I am trying to reach a decision ... that will include legally binding commitments based on the Google proposal."  

Almunia also stated that despite findings by the U.S. Federal Trade Commission (FTC) in its investigation of Google abusing its dominance search, this would not influence the EC’s deliberations. And, he added, the EC has made no decision as to whether to launch a formal investigation about the Android issues raised this past week.

The controversy surrounding Google’s search practices ended in January, concluding the company was not doing anything that violated U.S. antitrust laws, but did get non-legally binding pledges from Google that it would end the practice of "scraping" content from other websites for its products and allow advertisers to export analytical data.

Labels may be the answer

Where all of this is heading is that asking Google to clearly label its own services in search as a means for users to differentiate these results from those of rival services is what the company offered, and what the EC may find to be acceptable. The real test will come when the EC puts the “commitments” to a market test. Based on previous remarks from the EC, which some have accused of being too enamored with the arguments of Google competitors, how such competitors react is likely to be influential, but not necessarily the end of all these, as private suits have been filed that mimic the charges in the EC investigation and more are expected as competitors are exasperated with the slow pace of the EC’s actions. 

Other actions

Finally, it must also be noted that in a recent interview with the New York Times, Almunia did reveal that there would be no attempt to regulate Google’s algorithm, and that it was that as cited above regarding the FTC settlement, that there would be selective opting out of content crawling.

In other words, Google won’t be allowed to “involuntarily scrape” competitor content as a condition of inclusion in general search results.

At the end of the day, despite all of the posturing and positioning and differences in the antitrust laws on both sides of the pond, industry observers believe that the EC and FTC solutions will look very similar. The big difference is likely to be around enforcement. Those words “legally binding” pack a lot of punch when it comes to Google’s behavior. 

Only time will tell if it is a blow the EC is going to deliver.

Edited by Braden Becker
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