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Google Submits Formal European Antitrust Settlement Proposal
Yesterday, right under the deadline, Google delivered its proposal to the European Commission (EC) in an effort to settle potential antitrust claims against the company and head off a formal enforcement action. The proposal was required to concretely address four “areas of concern” identified by the EC.
Briefly, those involve “search bias” and “diversion of traffic,” improper use of third party content and reviews by Google, third party publisher exclusivity agreements and portability of ad campaigns to other search platforms. Google essentially addressed three of the four areas in its settlement with the FTC last month.
While the FTC declined to pursue the alleged “search bias” claim, European Competition Commissioner Joaquin Almunia has bought into the idea and said publicly that the EC will be compelling Google to make changes. Whether the “changes” will involve merely labeling Google products or involve something more aggressive is unclear.
However it’s very unlikely that Google would agree to change its algorithm or radically alter the SERP for the EC. So, we’ll see what sort of accommodation can be reached. Almunia told Reuters that the Commission was currently “analyzing” Google’s proposal but declined to give further details.
The 17 member anti-Google lobbying group FairSearch.org issued the following statement in response to the news of Google’s formal settlement proposal this morning:
A settlement will achieve Almunia’s goal of restoring competition to Internet search and related markets if it delivers positive answers to the following questions:
- Does Google apply the same rules to its own services as it does to others when it returns and displays search results?
- Does Google always provide the user with the most relevant results at the top of the search page, even if those come from non-Google sites?
- Is Google prevented from blacklisting competing companies or categories of companies from appearing in the top search results (for example, online travel agencies or metasearch sites)?
- Is Google prevented from using the quality scores and minimum bids it assigns to each website as a pricing mechanism to exclude competitors from appearing in the top display of search results?
The deal should also include a fast-track dispute resolution mechanism administered by a third-party monitor, to ensure that the settlement ends Google’s search bias and other practices identified by Commissioner Almunia as potential abuses of dominance.
The greater discretion that the EC has over antitrust matters vs. the FTC and the fact that Almunia has accepted the “search bias” argument as fact make the outcome here more uncertain and potentially more challenging for Google.
The EC has the power to impose what would amount to billions of dollars in fines if the matter cannot be successfully resolved.