Europe offers to let Google settle potential antitrust
case
By James Kanter New York Times
Posted:
05/21/2012 05:51:10 PM PDT
BRUSSELS -- Google (GOOG) may have abused its dominance
in Internet search by promoting its own businesses at the expense of
competitors, the European Commission said Monday. The executive body of the
European Union warned the company to propose changes in "a matter of
weeks" to its method of answering user queries, or possibly face an
antitrust lawsuit.
Search is the crucial tool that sends consumers to new
restaurants and hotels, cheap airplane flights and local services as varied as
plumbers or baby sitters. In issuing the ultimatum, European regulators sent
their strongest signal yet that they believe Google, which has long said its
search results are neutral, tips the scales in its favor.
"The Europeans are saying to Google: 'Time's up.
Cave in or we'll sue,' " said Keith Hylton, an antitrust expert at Boston
University School of Law.
A Google spokesman said the company disagreed with the
commission's conclusions and said "innovation online has never been
greater."
If Google decides to fight, the case could fuel a
fledging Federal Trade Commission investigation. U.S. regulators have been
working closely with the European officials, speaking by phone at least weekly.
Google is the dominant search engine in the United States
and holds even greater sway in Europe,
accounting for four of every five searches on the
Continent. Joaquin Almunia, the European antitrust chief, said at a news
conference in Brussels that regulators had identified "four concerns where
Google business practices may be considered as abuses of dominance."
He said Google might have unfairly exploited its market
position by displaying links to its own services, like Google maps or images,
when it answers a query, giving preference to them over those of competitors.
He also said Google included material in its own search results that were
copied from competitors' websites.
"In this way they are appropriating the benefits of
investments of competitors," Almunia said, explaining that restaurant
guides and travel sites were particularly affected.
The other two areas of concern involve how Google
conducts its advertising business, including how it delivers search ads on
partner sites.
Thomas Vinje, a lawyer for FairSearch, a coalition of 17
companies including Microsoft, said the group was "pleased that the
commission has identified some serious concerns with Google's anti-competitive
behavior." Antitrust experts expressed surprise at the rare public offer
by the commission, which reflects the delicate balance regulators are trying to
strike as they seek to fix problems in the fast-changing technology marketplace
before proposed remedies lose their relevance.
Almunia's move, some said, was a new phase in aggressive
European antitrust enforcement.
Neither Google nor Almunia described what kinds of offers
or changes in search methods could lead to a settlement in the case. Instead,
each appeared to hold out the prospect that they were prepared to walk away
from negotiations.
Both sides are likely to want to avoid the decade-long
case the commission undertook against Microsoft, which ended up paying $2
billion in penalties and fines.
"The Europeans are moving with the kind of speed you
need to get these issues resolved," said David Balto, a former policy
director at the Federal Trade Commission. "In five years, everyone might
be searching through Facebook."
Al Verney, a Google spokesman, said competition on the
Web had increased sharply in the two years since the commission began examining
the company's practices. He said that showed "the competitive pressures
Google faces are tremendous."
While Google has faced new rivals, most notably
Microsoft, which has plowed billions of dollars into its Bing search engine,
the company's share of the market has been surprisingly durable in recent
years. In the United States during March, Google accounted for 66.4 percent of
searches, up slightly from 65.7 percent in the same month in 2011, and 65.1 percent
for that month in 2010, according to comScore.
In Europe, Google accounted for 79.3 percent of searches
in March, compared with 79.8 percent the same month a year earlier, comScore
estimates.
Some experts said a settlement might be an attractive prospect
for Almunia, partly because of the complexities of the way search engines
operate.
Comments
Post a Comment