google antitrust

Google's proposed antitrust deal in Europe angers its rivals

Google's proposed settlement of a European Union antitrust case amounts to continuing its discrimination against other search companies—but putting a warning label on the practice, said an industry group.

The search giant has proposed labeling its own in-house services to indicate to users that they are not the result of "natural search." It also proposes including links to rival search engines for specialist restaurant search results that generate revenue for Google. The Internet giant's paid-for services would be separated from general search and treated more like advertising, according to media reports confirmed by a person familiar with the case.

The proposed remedies are essentially "labeling plus" and could make matters worse, said David Wood, lawyer for ICOMP, which represents some of the complainants in the antitrust case.

Shivaun Raff, CEO of Foundem, one of the first to complain to the Commission about Google, said: "The proposals described in the media this weekend sound like they may play straight into Google's hands. At first glance, they read more like an extract from Google's development road-map than a genuine attempt to resolve the Commission's concerns regarding search manipulation."

Accused of manipulating search

Google has been under investigation by the Commission since November 2010 after rivals accused the search giant of setting its algorithm to direct users to its own services by reducing the visibility of competing websites and services.

However there are also allegations that Google may have copied travel and restaurant reviews from competing sites without their permission (so-called "scraping" of content) and that its contractual restrictions may prevent advertisers from moving their online campaigns to rival search engines.

To resolve the latter issue Google has agreed to remove exclusivity provisions from all future contracts and any legacy advertising contracts. This search giant also offers tools to prevent web scraping by including a tool that would allow content owners to opt out.

"It is difficult to imagine a competition case where the stakes for European consumers and businesses could be any higher. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of Europeans discover, read, use and purchase online," said Raff.

In order for the Commission to judge the effectiveness of the proposed remedies, a market test will seek feedback from market players, including complainants. This feedback will be taken into account in the Commission's final analysis. However it is the Commission that must be satisfied with the outcome, not any other party involved. If a solution isn't found, the Commission could still fine the company up to 10 percent of its annual global revenue (US$37.9 billion last year).

Wood said Google has had plenty of time to test how the remedies will work in practice. "Complainants and other third parties should be given the time and opportunity to do the same thing," he said. "It might even be useful to set up tripartite meetings. That would seem to be the best way to test how the remedies will work in practice rather than how lawyers like myself think they will work."

New complaint pending

In January, ICOMP filed a new complaint alleging that Google had attained its dominance by unlawful means in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU), "by illegally blocking rival search engines' access to customers and consumers and forcing its advertising and publishing partners to work with it exclusively."

The previous complaints had alleged breaches of Article 102 of the treaty and so, the organization said, "Unless the Commission addresses the underlying Article 101 problem, any remedies agreed for Article 102 will be ineffective at restoring competition. They would only treat the symptoms, not cure the underlying disease."

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