Web giant strikes competition accord
GOOGLE HAS agreed the outlines of a settlement with Europe’s top competition authority, in a deal that would spare the US search giant from formal antitrust charges for allegedly abusing its dominance.
In a big test for how Google handles the mounting regulatory scrutiny it is facing worldwide, the company offered to make significant changes to its business to avoid a lengthy EU legal battle and the threat of multibillion-dollar fines.
While the deal must still be finalised, the talks have cleared an important hurdle that could save Google from the sort of decade-long fight in Brussels that dogged the likes of Microsoft and Intel. The details of Google’s concessions are unclear, but they address four specific concerns in an earlier warning by the EU.
The breakthrough came after Google said it would in principle extend the remedies it had offered to make for PC-based search to cover mobile search services too.
Joaquín Almunia, the EU’s competition commissioner, made this a key demand in the final days of talks, reflecting the growing popularity of smartphones. Mr Almunia concluded that Google’s proposed concessions were a sound basis for moving to advanced talks on a pre-charge settlement, people involved in the talks said.
A two-year Brussels investigation had identified problems with the way Google favours its own products in search results and demotes potential competitors. It also “copies” content from rivals without permission, shuts out competition with its advertising agreements with other websites and restricts advertisers from moving their online ad campaigns to rival search engines. The Google proposal covers all these areas. It is likely Brussels will keep open a separate investigation into the dominance of Google’s Android mobile phone and tablet operating system.
In coming months, Mr Almunia and Google will aim to put the finishing touches to the technical details of the settlement that, once complete, will be shared with the 20-strong camp of companies that complained about the internet group. These complainants – including Microsoft, eBay and TripAdvisor – have pushed Brussels to take tough action against Google and will probably make their concerns clear if the remedies are seen as cosmetic.
As Europe’s competition enforcer, Mr Almunia has favoured reaching settlements over protracted battles, particularly in the fast-moving tech world where innovation often outpaces the legal process and remedies become obsolete.
Google appeared eager to avoid the type of decade-long feud that Microsoft fought in Brussels, which damaged its reputation and cost it dearly in antitrust fines.
Mr Almunia’s office declined to comment. Before the decision was made, Mr Almunia told the Washington Post: “What was Google’s motto at the beginning? ‘Don’t be evil’? I hope it continues to be important.”
The EU has the power to levy fines of up to 10 per cent of turnover and can impose sweeping changes on a company found to be abusing its dominant position. A precharge settlement includes no fine and would usually not require the firm to admit any wrongdoing.
Google is still under investigation in the US, Korea and India. The pact with the EU is expected to be an important benchmark. – Copyright The Financial Times Limited 2012