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Friday, February 01, 2013
Google Works With EU To Settle Antitrust Probe

Google has sent to the European Commission (EC) proposals to ally competition regulators' concerns about its business practices, hoping to ending a two-year investigation and avoiding huge fines.

The European Commission said on Friday it had received detailed proposals from Google, which has been under investigation by european antitrust regulators for allegely using its market power to block rivals.

What's left to see is whether the commission will accept the proposals. Other wise, Google may face fines as high as its 10 percent of global turnover, which could mean up to $4 billion.

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'.

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.

Earlier this month, Google won a victory when U.S. antitrust regulators ended their investigation, saying the company had not manipulated its web search results to block rivals.

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