Publishers To EC: We Want More From Google Or We’ll Sue

As we discussed last week, the current Europe-Google antitrust settlement is dead. This is a surprising turn of events considering that it was once described by European regulators as essentially a done deal.

Outgoing European Competition Commissioner Joaquin Almunia confirmed last week in a talk at Georgetown University that a deal could not be finalized before he leaves office in a month.

While it’s still possible that some version of the current “rival links” settlement proposal could be salvaged, that seems increasingly unlikely. The outlook for settlement is partly clouded by the fact that European publishers are becoming more demanding and aggressive in their aims of “curbing” what they see as Google’s abuse of power.

A consortium of European publishers and especially Germany’s Axel Springer, among several other major German publishers, have vowed to sue the European Commission in the EU Court of Justice in Luxembourg if it fails to generate an outcome that satisfies them.

The UK’s Sunday Times quotes legal counsel for two German publisher groups, saying that legal action would occur “If these [Google settlement] commitments are not fundamentally improved.” What “fundamentally improved” specifically means remains unclear. These groups have not floated any concrete proposals to my knowledge (although I have seen one from a non-German source.)

My guess is that these publishers and other Google critics would need to see a solution that generated more traffic to their sites, perhaps monetary compensation from Google (i.e., licensing fees) and/or possibly the removal of Google “vertical” results at the top of the page (e.g., the local pack).

European publishers are frustrated and angry but also see momentum and an opportunity to exact concessions from an entity they regard as a destructive force in their markets. Google Executive Chairman Eric Schmidt recently sought to counter a German newspaper campaign that characterized Google as the “gateway to the internet” by arguing that Google is designed for users, “not websites.”

What’s remarkable about the European Commission’s failure to secure a settlement is that Almunia has near total authority to impose one, which could later be challenged. To some degree Google expected this would be done with the current settlement proposal, even over publisher disapproval.

However sponsored research as well as coordinated and persistent lobbying made it “politically” impossible to impose the settlement.