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Brussels throws antitrust settlement lifeline to Google

Almunia urges Schmidt to offer quick fix or face possible 'abuse' charges

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Google has been given the chance to settle an antitrust investigation of the company's business practices in Europe, competition officials in Brussels confirmed today.

The EU's competition commissioner Joaquin Almunia said this morning that he would consider "proposals of remedies" from the internet giant if it quickly addressed four areas of concern about Google allegedly stifling its rivals in the search market.

He sent a letter to Google chairman Eric Schmidt asking him to respond to those concerns within "a matter of weeks".

Almunia outlined what aspects of Mountain View's biz might be characterised as "abuses of dominance".

First, in its general search results on the web, Google displays links to its own vertical search services. Vertical search services are specialised search engines which focus on specific topics – for example restaurants, news or products.

Alongside its general search service, Google also operates several vertical search services of this kind in competition with other players.

In its general search results, Google displays links to its own vertical search services differently than it does for links to competitors. We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.

Our second concern relates to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation.

In this way they are appropriating the benefits of the investments of competitors. We are worried that this could reduce competitors' incentives to invest in the creation of original content for the benefit of internet users. This practice may impact for instance travel sites or sites providing restaurant guides.

Our third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements. Search advertisements are advertisements that are displayed alongside search results when a user types a query in a website's search box.

The agreements result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services. This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters.

Our fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google's auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google.

We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.

Almunia said that competition in the search market would benefit from Google swiftly offering up proposals as a remedy to those concerns.

Google had not immediately responded to The Register's request for comment at time of writing.

But Almunia also appeared to be issuing a final warning to the world's largest ad broker, which has indicated to the commissioner that it does not want to "engage in adversarial proceedings".

"Should this process fail to deliver a satisfactory set of remedies, the ongoing formal proceedings will of course continue, including the possible sending of a Statement of Objections," the competition commissioner said.

Brussels' officials opened an investigation into allegations that Google stifles competition by favouring its own search products in Europe in November 2010.

In April, a spokeswoman at Almunia's office told El Reg that a Statement of Objections would be the "natural next step" if the commissioner's conclusions were damning.

Sources had previously suggested that a 400-page Statement of Objections document would land on the lap of Google CEO Larry Page by the end of the first quarter.

It's unclear if Almunia's update on the Google case today means that he has weakened his stance against the company, or indeed emboldened it. After all, the four areas of concern strike at the heart of Google's business. Whether the search giant complies to proposing "remedies" that satisfy the competition commissioner remain to be seen, however. ®

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