Google Settles EU Antitrust Case, Rivals Whine

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Google has agreed to settle a European Union antitrust investigation launched three years ago by promising to change the way it operates its search business. After twice rejecting Google's proposed changes to its search business practices last year, the European Commission, the EU executive body, now finds Google's concessions adequate to avoid a legal challenge.

For Google, the agreement eliminates the prospect of a costly antitrust battle in European courts. The company still faces separate antitrust inquiries related to its Android business and to the way its Motorola Mobility unit, which is being sold to Lenovo, sought injunctions over industry-standard patents.

In January, Google settled an antitrust inquiry conducted by the Federal Trade Commission, to the dissatisfaction of FairSearch.org, a lobbying group supported by Oracle, Microsoft, Nokia, and various search industry competitors. Unsurprisingly, FairSearch.org offered a similar assessment of the Commission's decision.

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"The European Commission has tentatively accepted a proposal by Google which is worse than doing nothing," said Thomas Vinje, FairSearch Europe Legal Counsel, in a statement.

On Wednesday, the Commission said that Google has guaranteed that when it promotes its own specialized search services, such as Google Shopping, on search pages, it will also promote the services of three rivals, "selected through an objective method." The picture below shows how that promise might make Google's mobile search results look -- the green shaded ads point to a competitor of Google Shopping.

Competitors that wish to be represented through these links will have to bid on them if Google normally charges for inclusion, as it does with Google Shopping. Vinje objects to the use of "an auction mechanism that requires participating companies to hand the vast majority of their profits to Google."

But Joaquín Almunia, vice president of the European Commission responsible for competition policy, stressed that the Commission is concerned with fair competition rather than interfering with Google's search algorithm or dictating its business practices. "Our concern was that, given the favorable treatment of Google's own services on its page, competitors' results which are potentially as relevant to the user as Google's own services -- or even more relevant -- could be significantly less visible or not directly visible, leading to an undue diversion of Internet traffic," he said in prepared remarks.

Google will be monitored for compliance for five years. The company has also agreed to concessions similar to those made to the FTC. It will allow content providers to withhold their content from Google's specialized search services without retribution. It will remove exclusivity requirements from its publisher advertising agreements. It will also remove its restrictions preventing advertisers from automating the export of data to competing ad platforms.

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