Report: Google Makes Offer To Europeans To Prevent Antitrust Action

According to an article appearing in Bloomberg this morning, Google has complied with the European Commission’s July 2 deadline and made concessions to address its four antitrust “concerns.” Details of the offer and potential Google concessions weren’t revealed:

Google Executive Chairman Eric Schmidt sent EU antitrust chief Joaquin Almunia a letter responding to the probe, the EU said in a statement. The settlement offer addresses the “four areas the European Commission described” as potential concerns, Google spokesman Al Verney said in a separate e-mail. Details of the proposals weren’t disclosed.

The four concerns laid out in a May letter from Almunia to Google were the following:

1. Google’s “vertical” results: “In general search results, Google displays links to its own vertical search services differently than it does for links to competitors. We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.”
2. Use of third party reviews content: “Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors.”
3. AdSense exclusivity: “The agreements [with publishers displaying Google ads] result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services.”
4. Portability of ad campaigns from AdWords: “We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.”

As we’ve written previously, three out of the four are relatively easy to address. Indeed, Google’s implementation of Zagat reviews should render issue #2 moot. Issues #3 and #4 I assume Google will address fully in its offer to Almunia. The problem issue is #1, which goes directly to Google’s ability to control and develop its own product and search results.

I think Google will make a partial offer of some sort on the “vertical content” issue — I’ve suggested labeling. But Google is going to be unwilling to marginalize or “erase” its own content from SERPs (e.g., Maps, Shopping, Video). Indeed, the new Jelly Bean mobile SERP goes in the opposite direction, burying conventional search results and third-party sites in many instances in favor of new graphical info “cards.”

Almunia is under pressure to look and talk tough to Google but he has signaled he doesn’t want to file an action against the company — in part because of the expense and time involved, and in part because it’s not clear he’d succeed. We’ll update this post if we learn more about what Google has offered.