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Monday, May 21, 2012
Europe Asks Google To Address Antitrust Concerns

The European Commission (EC) has asked Google to outline remedies capable of addressing antitrust concerns,in order to settle an investigation into allegations of anti-competitive behavior.

In November 2010, the EC launched an antitrust investigation into allegations that Google had abused a dominant market position. Google's rivals, including Microsoft, accused the company of manipulating search results and promoting its own advertising services while demoting their rivals'.

EU Competition Commissioner Joaquin Almunia said that if remedies were offered by Google within the coming weeks, the antitrust investigation could be brought to a close.

Almunia's statement comes after Google's willingness to discuss any concerns that the EC might have without having to engage in adversarial proceedings.

The EC's concerns are related to the fact that Google displays links to its own vertical search services in its general search results on the web. Vertical search services are specialised search engines which focus on specific topics, such as for example restaurants, news or products. EC says that Google displays links to its own vertical search services differently than it does for links to competitors and this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.

EC also says that Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. EC is worried that this could reduce competitors' incentives to invest in the creation of original content for the benefit of internet users.

EC's third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements. The agreements result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services.

EC is also concerned about the restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google's auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google. EC says that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.

Joaquin Almunia has sent a letter to Eric Schmidt setting out these four points. "In this letter, I offer Google the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points," Almunia said.

"If Google comes up with an outline of remedies which are capable of addressing our concerns, I will instruct my staff to initiate the discussions in order to finalise a remedies package, "he added. "This would allow to solve our concerns by means of a commitment decision - pursuant to Article 9 of the EU Antitrust Regulation - instead of having to pursue formal proceedings with a Statement of objections and to adopt a decision imposing fines and remedies."

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