EU-Google deal


GOOGLE HAS entered the lexicon as a verb for a reason. You are probably among the roughly 90 per cent of Europeans who use it when you need information. But that market dominance has exposed it to increased scrutiny on antitrust grounds. In Europe and the US, regulators are looking at whether it uses its vast market share to benefit other aspects of its business, and to limit access to rivals’ services.

The European Commission, which has been investigating the giant for two years, set out a menu of items that it felt Google needed to tackle. The announcement this week by competition commissioner Joaquín Almunia that it had come to “a good degree of understanding” with Google indicates that the company has addressed the most critical concerns. Google said little, other than to acknowledge that it would continue to “work cooperatively” with the EC. But the company must be breathing a sigh of relief at the fading prospect of having to pay billions of euro in potential fines over these issues.

Even more significant will be Europe’s clear indication that it wishes to act relatively quickly to resolve problematical issues. This is a shift from previous regulators, such as Almunia’s predecessor “Steely” Neelie Kroes, who locked horns in legal battles with Microsoft on antitrust concerns over many years.

However, investigations are a two-way street, and Google no doubt learned from Microsoft’s tactics. Faced with antitrust accusations in the US in the 1990s, and later in Europe, Microsoft usually opted to go straight to the courts rather than negotiate, leaving a cloud of uncertainty hanging over its operations for years.

This week’s announcement suggests Google feels it is better to look for common ground and work towards concessions. Not that it is entirely in the clear – Almunia said the EU would like to see Google enact any European agreements on a global basis. And there are signs the EC may pursue investigations in other areas against Google. It is highly likely, however, that Google will see the European deal as a blueprint for placating US regulators. The company also showed willingness to respond to one of Almunia’s other concerns by swiftly announcing it would extend adjustments to its PC-based search to mobile devices as well.

A successful conclusion to this initial investigation will be a promising sign that European competition issues can be more readily and rapidly addressed in the future, to the benefit of consumers and businesses.

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