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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