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Google given a month to wriggle out of Euro antitrust smackdown

Ad giant must persuade rivals it isn't cheating in search

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Google must convince its rivals that it competes fairly in the web search market or else face sanctions for alleged "abuse of dominance", a European watchdog warned today. And the clock is ticking.

The ad giant now has a month to come up with a solution to complaints that it favours its own services over its competitors' products in web search results. Google could be fined $4bn - 10 per cent of its revenue - if no deal can be reached and it loses a subsequent legal battle with the European Commission.

Google's executive chairman Eric Schmidt met Brussels' competition commissioner Joaquin Almunia yesterday, but the web giant's big cheese failed to win over Almunia.

It's understood the US Federal Trade Commission - which is conducting its own separate inquiry into Google's search business practices - is set to roll over and show Mountain View its belly. Not so in Europe, however.

"After meeting Eric Schmidt, executive chairman of Google, today in Brussels, I have decided to continue with the process towards reaching an agreement based on Article 9 of the EU Antitrust regulation," Almunia said today.

He added that the talks that have been going on for much of the year and had, at times, proved fruitful.

"We have substantially reduced our differences regarding possible ways to address each of the four competition concerns expressed by the commission," Almunia said.

Almunia highlighted four possible areas of market abuse in May this year:

  • the way in which Google's vertical search services are displayed within general search results as compared to services of competitors;
  • the way Google may use and display third party content on its vertical search services;
  • exclusivity agreements for the delivery of Google search advertisements on other websites; and
  • restrictions in the portability of AdWords advertising campaigns.

Almunia said that the discussions with Schmidt were at an advanced stage and that he expected Google "to come forward with a detailed commitment text in January 2013".

The commissioner continued:

We will then prepare a Preliminary Assessment formally setting out our concerns. The Preliminary Assessment would serve as a basis for Google to present formal commitments which would then be market-tested, leading to a possible decision with binding commitments.

Lobby group FairSearch, which comprises Microsoft and various other complainants who took their gripes about the search market to the European Commission, welcomed Almunia's statement:

"FairSearch applauds European Commission Vice President Joaquin Almunia for seeking to extract a binding set of commitments from Google to end biased search results and other potential legal violations he has identified, and to submit that proposal for market testing before determining if it resolves Google’s abuse of dominance in Europe where the company controls 93 percent of search."

The Register asked Google to comment on this story. It hadn't immediately got back to us at time of writing, however. ®

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