EU Says More Google “Concessions” Needed Before Antitrust Settlement

The vigorous lobbying efforts of Google critics FairSearch.org and Foundem’s SearchNeutrality.org seem to be paying off. Earlier today EU Competition Commissioner Joaquin Almunia told members of the European Parliament that additional “concessions” would probably be required of Google to settle the antitrust investigation against the company and avoid litigation and potential financial penalties.

According to Reuters, Almunia said the following:

After [all the settlement proposal feedback is received] we will analyze the responses we have received, we will ask Google, probably, I cannot anticipate this formally, almost 100 percent we will ask Google: you should improve your proposals

Immediately upon release of the formal EU-Google negotiated antitrust settlement proposal roughly a month ago, Google’s critics decried it as insufficient (in some cases before it was released). For example, last week UK-based vertical search rival Foundem released a white paper that offers a point-by-point rebuttal of the settlement.

The EU exposed the settlement as part of a “market test” (comment period) that was supposed to last roughly a month, but has been extended to June 27.

My understanding is that Almunia and his team carefully negotiated the settlement provisions with Google. They were not seeing Google’s proposal for the first time last month. For that reason I had the impression that the “market test” was something of a formality to socialize the settlement terms among Google’s competitors and legislators in Europe more broadly.

It seems unlikely that Almunia wouldn’t have anticipated the negative reaction to the settlement proposal, given the very public history of rivals’ complaints against Google. (Some of Google’s critics aren’t interested in settlement but want to see litigation and fines.) It’s strange therefore that�Almunia would be acting as though the negative reaction to the settlement is a surprise.

The current Google-EU settlement proposal looks very much like the US version that was approved by the US Federal Trade Commission (FTC) earlier this year. The major difference, where search is concerned, involves the inclusion of links to rival sites in Google search results. That’s intended to address the alleged “search bias” and “traffic diversion” issue (Google’s ability to place vertical content at or near the top of results). This “search bias” question was something the FTC chose to entirely avoid because the issue was a shaky one, legally, for the agency.

The “rival links” provision of the settlement proposal, expected to mollify Google’s search-bias critics, has instead created new controversy. It’s a highly problematic “solution” and one that has drawn fire accordingly. Yet it’s really not clear what search results modifications would satisfy “the market” except fairly radical ones (e.g., eliminating Universal Search entirely), which would be fundamentally unacceptable to Google.

If Almunia’s primary concern is to appease or please Google’s rivals we may see the breakdown of the settlement process. That would likely result in eventual litigation, which would be wasteful and do little to increase search competition in Europe. And I suspect the EU would be probably be on the losing end of that battle.

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