Europeans Taking Sweet Time In Resolving Antitrust Case With Google

Google’s antitrust case in the US concluded in January, much to the dismay of companies that had been agitating for tough action by the FTC. It was seen as a near total victory for Google.

Rivals quickly turned their attention to Europe in the hope that, unencumbered by some of the legal issues that inhibited US regulators, it would be willing to impose “meaningful” restraints on Google.

There were some signals from EU Competition Commissioner Joaquin Almunia that Europe was going to take a firm stand on the vertical search or “search bias” issue. Google’s alleged “search bias” toward its own properties has been the central rallying cry among Google’s critics and competitors.

Almunia gave an interview to the Financial Times in which he asserted that Google was “diverting traffic”:

“We are still investigating, but my conviction is [Google] are diverting traffic,” Mr. Almunia told the Financial Times, referring to Google’s preferential treatment of its own vertical search services.

The contention that Google is “diverting traffic” (away from its rivals) is far from clear. The implication is that consumers are being manipulated or deceived by Google search results. That’s really an “empirical question” that should be tested with consumer research. However my view is that users often just want reliable information and don’t necessarily care about its particular source in a large percentage of cases.

Google has submitted its formal settlement proposal to Europe, which Almunia and his team are now considering. According to Reuters (which has only second-hand information) it contains a provision that would involve Google labeling its own properties in search results, a practice it already uses in certain contexts.

The article also suggests that Google would allow the same flexible transfer of ad campaigns (via API) to third party ad networks that it agreed to in the US and recently implemented.

Yet any possibility of swift action in Europe appears to be fading. Competition Commissioner Almunia says there probably won’t be any resolution or settlement until after summer vacation in August. Before then he will reportedly socialize Google’s settlement proposals with Google’s critics and competitors for input.

It may also be that the EU doesn’t actually intend to do anything dramatic against Google and deferring the decision will reduce the spotlight and perhaps diminish some of the high expectations it now faces.