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Google unlikely to get kid-glove treatment THIS side of pond - Euro biz players

All in Almunia's hands... now

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European web businesses are unlikely to give up the fight against Google's business practices, according to sources involved in the case. Reports at the weekend suggest that Google was close to reaching a closed door settlement with the FTC which would require it only to make voluntary presentational changes, and relieve it from signing a binding consent decree.

But Europe is unlikely to follow suit, says David Wood, who has acted on behalf of litigants in the parallel investigation by the European Commission.

Google's fate is in the hands of Competition Commissioner, Joaquín Almunia, who back in May urged Google to mend its ways in four areas: search neutrality, copying material from search rivals, anti-competitive contracts with advertising partners, and ad campaign portability. In September, he reiterated his view that a revised Google offer of remedies failed to address all the complaints.

The prospect of a rapid US settlement, with Google escaping unscathed, has raised eyebrows.

"Why would the FTC help Google undermine other law enforcement jurisdictions by abruptly closing the Google search bias investigation before the other jurisdictions act?" asked Scott Cleland, author of Search and Destroy: Why You Can't Trust Google Inc and chairman of NetCompetition, a trade body backed by telecomms companies. Cleland highlights what he calls "troubling irregularities".

Wood told us Google's market share in Europe, around 90 per cent or higher in most markets, meant Almunia was obliged to take the issues seriously. He also pointed out that the 20 or so complainants are unlikely to settle for a statement of objections from the Competition Commission which failed to address their complaints.

"The third parties are a formal part of the process, and these third parties have rights," Wood told us. "That's a big difference". If Almunia were to make a quick settlement then the third parties could take the Commission to the General Court. This would lead to the embarrassing prospect of the Commission lining up in the dock alongside the US corporation - against small European businesses.

(Of course, plenty of large European businesses don't like Google one bit either, but search neutrality tends to discriminate against smaller players).

Google's Schmidt was a significant contributor to President Obama's re-election campaign and reportedly spurned a Cabinet post in the new administration. Quite coincidentally, the Chocolate Factory has been the recipient of some of the gentlest of treatment US regulators have ever doled out. Google received a mere $25,000 fine for privacy violations from the FCC, even though it admitted hampering its investigation into Street View, followed by a $22.5m fine from the FTC for hijacking Apple's Safari.

Almunia is expected to meet Google's Schmidt tomorrow. Perhaps the chairman can win him over with his argument from last week, to paraphrase: "this is what capitalism looks like". ®

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