Google's new concessions on European search will put rivals' logos into results

Google's new concessions on European search will put rivals' logos into results

Joaquin Almunia says that new commitments on search could avoid legal action by giving rivals greater visibility via auction

Ian Traynor in Brussels and Charles Arthur
The Guardian, Tuesday 1 October 2013 11.56 EDT

Europe's antitrust commissioner signalled on Tuesday that he will seek a settlement with Google over the search engine's business practices rather than pursuing it through the courts over alleged abuse of its dominant market position.

Under commitments offered by Google, specialist search sites that offer rival services - such as Streetmap for mapping or Foundem for shopping - will appear in Google search results pages with their logo and explanatory text. Their position on an internet user's results page will be chosen by an auction system.

That compares with the current setup, where Google's own products such as Google Shopping, Maps and YouTube dominate search results, a situation that triggered an investigation by the European commission in November 2010 following complaints from Google competitors including Microsoft.

The proposal would apply not just to desktop searches but also to mobile phones, which are a growing source of hits for Google, which controls around 90% of the market for search in Europe.

Joaquin Almunia, the commissioner for competition, said on Tuesday that Google had made a fresh set of "commitments" on how to respond to the accusations. He sounded confident that the case could be wrapped up by spring 2014 with the conclusion of legally binding "commitments'' from the internet giant resolving the dispute. Otherwise Google faces the threat of a fine of up to 10% of its global revenue, or $5bn (£3.1bn).

"Google has now improved the commitments it has offered. We have negotiated improvements," Almunia told a meeting of industry experts and lobbyists in the European Parliament. "The new proposal more appropriately addresses the need for any commitments to be able to cover future developments."

He outlined four sets of objections to Google's business conduct, declaring that if left unaddressed, they would force the EU regulator to issue a statement of objections and levy huge fines. His group is holding separate investigations – which are still under way – into whether Google's phone subsidiary Motorola abused the patent system, and whether the free pricing on its Android smartphone operating system counts as predatory pricing. The patent inquiry is "well underway", Almunia said.

The main problem for the commission is the way Google is held to exploit its leading market position to promote its own products and services. The commission also alleges that Google compels other websites and software designers to reach binding deals with the search engine, which limit advertising competition.

Almunia said the Google investigation was difficult and complex because it was the first time Brussels had scrutinised the online search market and because the sector was changing at such speed.

A response from Google in the spring was judged inadequate by its rivals, the commissioner said, and intensive negotiations have been conducted since.

"We have reached a key moment in this case," said Almunia. "Now, with the significant improvements on the table, I think we have the possibility to work again and seek to find an effective solution."

If the negotiations went well, he added, a settlement would probably be reached by next spring. If they broke down, the two sides could slide into more serious dispute within a few months.

"We will work with Google during the next weeks to finalise the precise drafting of the proposed commitment text," Almunia said. "The settlement route remains the best choice. I hope the answers we will receive to our questions will confirm this."

Google confirmed that it had made "difficult" concessions in an attempt to defuse the dispute.

Kent Walker, Google senior vice-president and general counsel, said: "This has been a very long and very thorough investigation. Given the feedback the European commission received on our first proposal, they have insisted on further, significant changes to the way we display search results. While competition online is thriving, we've made the difficult decision to agree to their requirements in the interests of reaching a settlement."


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