BRUSSELS - Internet search engine Google reached a settlement to end the European Union’s three-year antitrust investigation after it improved an offer to display results from rival search services.
Google will dodge EU fines and any finding that it discriminated against competing sites, a year after the U.S. Federal Trade Commission dropped a similar investigation by saying Google was motivated more by innovation than by trying to stifle competition.
The five-year pledge to the European Commission lets Google add new services or alter its search page as long as it grants three links to rival services next to its own specialized search results such as Google Shopping, the Brussels based EU said.
“No antitrust authority in the world has obtained such concessions,” European Union Competition Commissioner Joaquin Almunia told reporters in Brussels. “The concessions we have extracted from Google in this case are far-reaching and have a clear potential to restore a level playing field in the important markets of online search and advertising.”
The deal will close one of the EU’s most high-profile antitrust cases as the bloc’s antitrust chief seeks similar settlements with OAO Gazprom, Samsung Electronics and Visa Europe before he leaves office at the end of October. Breaking the terms of such a pact carries a penalty of as much as 10 percent of global revenue. Microsoft was fined about $760 million last year for violating an EU settlement.
Google’s EU accord “barely makes any substantive impact” on the company’s core businesses, said Ed Barton, an analyst at Strategy Analytics in Milton Keynes, England. “If it enabled them to do anything which might actually impact the business meaningfully, Google wouldn’t have agreed to it.
“Google Search is way more than a Web page: It is an all encompassing digital platform across online and mobile,” he said. “To keep the audience within the ecosystem, this settlement allows competitors to nibble at one node of that for five years.”
Triggered by complaints from other Internet businesses, the EU’s investigation examined allegations that Google promotes its specialist search services, such as Google News and Google Finance, copies competitors’ travel and restaurant reviews, and has agreements with websites and software developers that thwart competition in the advertising industry.
Criticism from groups representing Microsoft, Expedia and Nokia to previous offers by Google led to the EU seeking more changes before it would accept a settlement. Regulators said they will write to the 18 companies and groups that filed complaints before they finalize the settlement and reject the complaints. The deal will be made legally binding sometime in the coming months.
“I don’t see why from now on I would change my mind” about the suitability of the commitments, Almunia told reporters. He said he saw his job as protecting competition for consumers and not for competitors.
By limiting the input on Google’s latest offer “Almunia risks having the wool pulled over his eyes,” David Wood, a lawyer for a group of rivals including Microsoft, said in an emailed statement. “A settlement without third-party review is a massive failure.”
Mountain View, Calif.-based Google will avoid using content from websites that ask not to be included in its specialized search. It will also drop a requirement that publishers use Google exclusively for search advertising and will allow search advertising campaigns to use competing platforms.
“We will be making significant changes to the way Google operates in Europe,” Al Verney, a spokesman for the company in Brussels, said in an email. “We have been working with the European Commission to address issues they raised and look forward to resolving this matter.” Information for this article was contributed by Gaspard Sebag and Adam Ewing of Bloomberg News.
Business, Pages 26 on 02/06/2014