Antitrust Law Daily Wrap Up, TOP STORY: European Commission looking for more significant concessions from Google to resolve competition concerns, (Jul 17, 2013)

By Jeffrey May, J.D.

Joaquin Almunia, European Commission (EC) Vice President in charge of competition policy, has reportedly sent a letter to Google Executive Chairman Eric E. Schmidt, seeking additional commitments from the company to resolve EC competition concerns over Google's conduct in the markets for web search, online search advertising, and online search advertising intermediation in Europe. Almunia said at a press conference today that Google's proposed remedies were not enough to overcome the EC's concerns.

The EC is currently investigating Google’s possible abuse of its dominant position through search and advertising practices. In April, the EC announced the terms of a proposed settlement intended to resolve these competition concerns. The EC sought public comment on the commitments to determine whether to make them legally binding on Google. The comment period closed last month.

According to reports, Almunia told members of the European Parliament in May that it was “almost 100 percent” certain that the EC would ask Google, Inc., to improve its proposal to settle the EC antitrust probe related to how Google presents search results.

In response to the EC's “market test” of the Google commitments, a number of interest groups have called on the EC to reject the company's proposed settlement terms. One of these groups, FairSearch Europe, has called on the EC to reject Google's proposed commitments as inadequate.

“Google’s proposed commitments across the board retard rather than promote competition. As we’ve said often, they are worse than nothing,” said FairSearch Europe spokesperson Thomas Vinje in a statement released today. “Google failed to propose effective remedies for scraping content from competing sites, locking advertisers into exclusivity arrangements and limiting the portability of ad campaigns,” he added.

The EC identified four competition concerns in the fields of specialized search services (i.e. services allowing users to search for specific categories of information such as restaurants, hotels or products), and online search advertising:

(1) Google’s web search results favor its own specialized web search services, such as Google News, Google Shopping, and Google Places, as compared to links to competing specialized web search services, potentially making more relevant results less visible to users;

(2) Google uses without consent original content from third party web sites in its own specialized web search services with the potential of reducing competitors' incentives to invest in the creation of original content for the benefit of Internet users;

(3) Google's contracts with third party web sites or publishers, such as newspapers, contain exclusivity agreements requiring the publishers to obtain all or most of their online search advertisements from Google, thereby reducing the choice of online search advertisements they can offer to users of their web sites; and

(4) Google restricts the transfer of online search advertising campaigns away from Google's Adwords to rival search advertising platforms and the management of such campaigns across Google's Adwords and rival search advertising platforms.

To address these concerns, Google agreed over the next five years to the following:

(1) to label and clearly separate promoted links to its own specialized search services so that users can distinguish them from natural web search results and to display links to three rival specialized search services close to its own services, in a place that is clearly visible to users;

(2) to allow websites to opt-out from the use of all their content in Google's specialized search services, without impacting the ranking of those web sites in Google's general web search results, and to provide specialized search services with a method for marking information that cannot be indexed or used by Google, and to provide newspaper publishers with some degree of control with respect to the display of their content in Google News;

(3) to refrain from requiring publishers to source online search advertisements exclusively from Google; and

(4) to refrain from imposing obligations that would prevent advertisers from managing search advertising campaigns across competing advertising platforms.

Google has pledged to continue working with the EC to resolve the concerns.

In the United States, the FTC had conducted an investigation into alleged “search bias” by Google. The agency announced earlier this year that the company had voluntarily agreed to refrain from certain questionable practices, such as unfairly “scraping” content of competing websites and passing it off as its own, and placing unreasonable restrictions on the ability of advertisers to simultaneously advertise on Google and competing search engines.

Companies: Google, Inc.

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