Comments Expected on Google's Proposal to Avoid Massive Fines over Antitrust Allegations from Europe

By Ed Silverstein April 26, 2013

Over the coming days, Google’s rivals will be reviewing its draft proposal of how it can make its search practices more competitive in Europe, after numerous complaints.

The move may allow both sides to reach a settlement in an antitrust case against the company by the European Commission. The allegations were made that Google unfairly favors its own services over those of its rivals.

European officials also began testing to see if the proposals will favor Google’s products in search results. The tests are expected to be finished next month.

“Now we have concrete proposals on the table, which meet the necessary standards for us to submit to the public and to seek feedback on,” Antoine Colombani, a spokesman for the European Union’s competition commissioner, Joaquín Almunia, told The New York Times.

If a settlement cannot be reached, Google may be fined up to 10 percent of its worldwide yearly sales, which totaled about $50 billion during 2012.

Under the plan, Google will change its practices over five years – by such steps as displaying links to its rival search providers. In addition, Google would identify its own services if they list local businesses. And Google would display links to three rival search services. There are several other suggestions from the company, too.

Not everyone is pleased with the current proposal, however.

“Google has taken a year to develop the proposal released today,” Thomas Vinje, an attorney for FairSearch Europe (which includes Microsoft, Nokia and Oracle). He told The Times, “We think it’s only fair that outside experts have more than a month to help the commission market test the long-lasting effects of Google’s proposal on consumers and innovation.”

“Google’s own screen shots in its proposal shows it seeks approval to continue preferential treatment for its own products,” Vinje added.

“Instead of promising to end its abusive practices, Google’s proposal seems to offer a halfhearted attempt to dilute their anticompetitive effects by labeling Google’s own services and throwing in some token links to competitors’ services alongside them,” Shivaun Raff, a co-founder of Foundem, added in a statement to The Times. “Neither measure will make a dent in Google’s ability to hijack the traffic and revenues of its rivals.”

In its proposal Google does not admit any guilt, but says it wants to avoid time-consuming legal conflict.

“Nothing in these Commitments should be construed as establishing a violation of EU competition rules or an admission that Google agrees with the concerns expressed in the Commission’s preliminary assessment,” the Google statement said.  “Google expressly denies any wrongdoing.”

If there is a settlement with European authorities, Google would not have to admit it violated EU competition law.

In addition, the Initiative for a Competitive Online Marketplace (ICOMP) will be among the organizations reviewing Google’s proposal.

“If the proposals don’t clearly set out non-discrimination principles and the means to deal with the restoration of effective competition, plus effective enforcement and compliance, it’s very difficult to see how they can be satisfactory,” the organization said in a statement quoted by The Register.

So far, the EC has said in a preliminary statement, “The commission has … reached the preliminary conclusion that in four areas Google may be abusing its dominant position in the European Economic Area (EEA). Such abuses would be in breach of Article 102 of the Treaty on the Functioning of the European Union," TechZone360 reported.




Edited by Alisen Downey

TechZone360 Contributor

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