Google tries to escape burdensome regulatory sanctions and taxes with a proposal to resolve antitrust concerns and a payment to benefit French publishers.

Thomas Claburn, Editor at Large, Enterprise Mobility

February 1, 2013

3 Min Read

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Faced with antitrust scrutiny and the threat of taxes in Europe, Google is trying to make peace with regulators there.

On Thursday, the company delivered, on the last day allowed before penalties could be imposed, a proposal to placate EU competition commissioner Joaquin Almunia. Though specifics have not yet been made public, Google's aim is to resolve the European Commission's antitrust investigation with the least possible disruption to its business. The company's previous proposal was deemed to be inadequate.

The Commission has been looking into whether Google has been abusing its dominant position in the search market by ranking its own services higher in search results than similar competing services. It's also looking into allegations that Google reduced the quality score accorded to competitors' content, thereby reducing ad revenue potential, and that Google's contractual requirements prevent advertisers from placing ads on the websites of these competitors.

Confronted by demands that it pay to publish links to French media content, Google on Friday extended an olive branch, in the form of a €60 million ($81.4 million) Digital Publishing Innovation Fund and a commitment to expand its partnerships with French publishers.

[ See what else Google is up to. Read Google's Project Glass Glimpsed In FCC Documents. ]

"A healthy news industry is important for Google and our partners, and it is essential to a free society," said Google executive chairman Eric Schmidt in a statement. "These agreements show that through business and technology partnerships we can help stimulate digital innovation for the benefit of consumers, our partners and the wider Web."

They also show that content sharing becomes easier when there's cash sharing.

There's further proof that paying for peace works: Google in December resolved six-years of litigation by Belgian publishers to get Google to pay licensing fees for including snippets of their text in Google News and linking to cached copies of articles in Google Search. The deal involves revenue and marketing commitments from Google.

Google did not immediately respond to a request to explain how it plans to address EU antitrust concerns.

In January, Google settled a 19-month Federal Trade Commission antitrust inquiry without being forced to make any major changes in the way it does business.

David Wood, legal counsel for Icomp, a Microsoft-backed trade group, said in a statement that Google's settlement proposal needs to specifically address the issues raised by complainants to ensure fair competition. "Any settlement must include explicit acceptance by Google of its dominance and that it has damaged European businesses through its anti-competitive practices," he said.

About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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