Google gets closer to EU antitrust deal over search dominance 'abuse'
Likelier than ever to avoid fines, having to admit wrongdoing
Google is closing in on a deal with competition officials in the European Commission which stops far short of formal sanctions, after the EU's antitrust chief Joaquin Almunia said today that he was negotiating a settlement agreement with the ad giant.
Almunia's office is working on "the precise drafting of the proposed commitment text" with Google over the next few weeks.
The commissioner told the European Parliament this morning that he had concluded that the ad giant's revised offer of concessions on its search biz had "more appropriately” addressed "the need for any commitments to be able to cover future developments".
Earlier this year Almunia said it was likely that Google had abused its dominant position in online search in the EU, where it holds sway over around 90 per cent of the market.
Almunia told MPs from the 28-state bloc that his powers were limited. He said:
My responsibility when enforcing the antitrust rules in this case is to make sure that internet users are provided with choice, so they can decide between services based on their merits, and to preserve incentives to innovate across the board, so that users can benefit from new or better services tomorrow.
Antitrust is not an adequate instrument to impose on Google a specific algorithm or to prevent Google from improving its services if it wishes to do so. Nor, as a competition authority, can the Commission act in this case as a regulator for all the issues arising in the online world or raised by stakeholders regarding Google.
The commissioner has long been clear that his preferred route would be to reach a legally binding settlement with Google that would, in his view, restore competition quicker than if Brussels opted to slap the company with a big fine and allegations of wrongdoing.
Almunia told EU politicos today of some of the changes Google had made to its offer of amends that appears to have made it more palatable to the commission. He said Google had made a "significant improvement" to vertical search.
Many respondents during the market test said that in this Google proposal the links to rivals that would be displayed for certain categories of specialised search services were not visible enough.
In my opinion, the new proposal makes these links significantly more visible. A larger space of the Google search result page is dedicated to them. Rivals have the possibility to display their logo next to the link, and there will be a dynamic text associated to each rival link to better inform the user of its content.
Market test respondents also contested the organization of the proposed auction to determine the rival links that would be displayed on Google's search results page for the most commercial categories of specialised search services.
The new proposal foresees an auction mechanism which includes the option to bid for each specific query. This is important to also ensure that smaller specialised search operators can be displayed.
Almunia added that Google had, with its new offer, done a better job of addressing three other areas of concern that the commissioner had highlighted in his initial "abuse of dominance" claims about the Larry Page-run corporation.
On the practice of content scraping, Almunia said that "Google has improved the granularity of the opt-out that is offered to third party web sites. It also tightens the provision that ensures that Google cannot retaliate against websites that make use of the opt-out."
He was also pleased with a revision to the package of concessions that apparently addresses rigid conditions imposed on web publishers who are prevented by Google from displaying search ads from its competitors.
Google has committed to no longer include in its agreements with publishers any provisions or impose any unwritten obligations that would require publishers to source their requirements for online search advertisements exclusively from Google in relation to queries from EEA [European Economic Area] users. The new proposal improves the safeguards against possible circumventions.
Finally, the commissioner said that Google was committed to putting an end to enforcing - either through written or unwritten obligations - restrictions on advertisers to stop them managing their search ad campaigns on rival platforms.
But will scrutiny of Google be properly independent if deal is reached?
In its original offer in March, Google unashamedly said that it wanted to appoint the "monitoring trustee" who would be required to closely inspect the ad giant to ensure it sticks to its commitments with the commission.
Google had proposed putting forward a list of suitable candidates for the role. That trustee, Google claimed, would be independent from the company but paid by Mountain View to carry out the work.
"The monitoring trustee shall be remunerated by Google in a way that does not influence or impede the independent and effective fulfilment of its mandate," Google said at the time.
Almunia told MPs today that "in a commitment that in my view deserves careful attention, an independent monitoring trustee would be put in place to provide assistance to the Commission in ensuring that the principles outlined in Google's proposals would be implemented in practice."
It's not yet clear if the "careful attention" the commissioner talks of has anything to do with Google hiring the trustee, or whether the individual will, in fact, be truly independent of the company.
Settlement could be agreed by next spring
The commissioner said that he was now at a "key moment" in a case that has rumbled on for nearly three years.
He said Google would "support its new proposals with empirical data to show their impact."
As a next step, I will seek feedback on the improved commitments proposal from complainants and other relevant market participants. To that end, we will send information requests, on the basis of the EU Antitrust Regulation 1/2003, on the improvements that are being proposed.
We know the general positions of the complainants and other stakeholders. What we need now is to receive concrete technical elements on the effectiveness of the proposed package in order to conclude whether this new proposal is satisfactory from a competition point of view.
If our investigation on this improved proposal is satisfactory, I will continue the commitments route [Article 9] and end up with a formal decision next Spring. Otherwise, I will be forced to turn to a procedure under Article 7 of the Antitrust Regulation [PDF]: this would mean sending a Statement of Objections to Google in the coming months, to which Google could formally respond in writing and during an Oral Hearing.
Almunia concluded: "I think the settlement route remains the best choice."
Complainants against Google are now digesting the commissioner's remarks in Parliament this morning. The ICOMP lobby group – which counts Google's bitter rival Microsoft as a member – appeared unsatisfied with Almunia's speech.
Its legal counsel David Wood said, according to tweets from ICOMP: "It's unclear that the revised commitments go nearly far enough to meet third party concerns and restore competition, not least because it's unclear how much detail of the proposed package and supporting data will be made public."
He added: "The Commission's plan to issue Requests for Information would seem much less satisfactory than a second formal market test." ®