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From Antitrust Law Daily, September 10, 2014

Almunia sees Google case ending on successor’s watch

By Jeffrey May, J.D.

The European Commission's four-year-old antitrust probe of Google's search practices will likely be among the high-profile investigations landing on the plate of the next EC Competition Commissioner—Margrethe Vestager. Today, European Union President-elect Jean-Claude Juncker announced that Vestager—Denmark's former economy minister—will take the helm of the competition authority, which is the late phases of the Google abuse of dominance investigation.

It was widely thought that the Google case would be wrapped up before the five-year mandate of Joaquín Almunia, EC's current competition commissioner, ends next month. However, earlier this week, it was reported that a third set of commitments offered by the online search and advertising company in January to resolve the matter would not be enough. The EC is now seeking additional concessions from Google.

Today, Almunia told attendees of Georgetown Law School’s Global Antitrust Enforcement Symposium that complainants in the Google matter have raised “serious arguments” about the sufficiency of the third set of commitments. Almunia said that the agency heard from 18 of the 20 formal complainants and noted that they have offered empirical studies to back up their new concerns.

In February, the EC disclosed that it had reached a proposed settlement with Google, which was capable of addressing competition concerns. Although the EC competition authority initially considered the company's concessions to be quite positive, it has now reached the conclusion that some of the aspects of the Google commitments should be modified in light of growing opposition to the settlement. Almunia came to the conclusion after discussing the issues with his team at the competition authority and with EC President Jose Manuel Barroso. According to Almunia, Google is now considering its next steps in the case, and there is no official deadline for Google's response.

Under the settlement proposal, Google agreed to, among other things, display rivals to its own specialized search services (services allowing users to search for specific categories of information such as restaurants, hotels, or products) in its results in a way that was clearly visible to users and comparable to the way in which Google displayed its own services. The proposed remedy was intended to resolve EC concerns that users might not be aware of the promotion of Google’s services within the search results and that traffic could be diverted away from Google’s competitors towards Google’s own services. Google also has agreed to an independent compliance monitor in Europe for five years.

Almunia believes that a resolution is very, very close, but unlikely before the expiration of his mandate in October. However, if Google does not respond with improvements to the settlement, the EC will have to prepare a statement of objections and pursue formal prohibitions, targeting the company's alleged use of its dominance in search to exclude competitors from other markets, such as the market for so-called vertical search services, where Google faces competition from large or small innovative rivals weaken competitors in vertical search markets. Almunia also noted in his remarks that “not all cases can be resolved with commitments.”

While digital markets are an important concern, Almunia also discussed the importance of competition in the energy sector, especially in Europe. One of the high-profile investigations in that sector will be among the probes falling to Almunia's successor. The competition authority disclosed in September 2012 a probe of Russian producer and supplier of natural gas Gazprom for abuse of their dominant positions, market foreclosure, and other anticompetitive conduct. The investigation is continuing. During the last few months, since the situation in Ukraine has “blown up,” commitments discussions have not been possible, Almunia noted.

Further, the next competition commissioner will take over the ongoing car parts sector investigation. In this sector, the EC has already collected almost €1 billion from the recent automotive ball bearings settlement.

Almunia also discussed the competition authority's efforts to enhance openness and transparency during his mandate. Among these efforts was the release in 2011 of “antitrust best practices” to give parties more opportunities to interact with the competition authority and to explain their arguments at an early stage. To facilitate compliance, the EC also introduced new antitrust rules and guidelines to cover a number of issues such as distribution, standards, and exchanges of information.

In addition, Almunia described the evolution of cartel enforcement—his first priority during his mandate—and the development of settlement proceedings for a swifter resolution of these cases. Since 2010, the EC has settled 14 cartel cases in a variety of sectors, involving 65 undertakings and imposing fines for a total of € 4.1 billion. On the topic of fines, Almunia pointed to nearly €9 billion in fines against companies that had formed cartels since 2010.

Against this backdrop, Vestager will take over as Europe’s top antitrust official on November 1.

MainStory: TopStory Antitrust

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