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From Antitrust Law Daily, February 5, 2014

Google’s latest proposed commitments appear to resolve EC antitrust investigation

By Jeffrey May, J.D.

In an effort to resolve a long-running European Commission (EC) antitrust investigation into Google’s business practices with respect to online search and search advertising, the company has agreed to guarantee that, when promoting its own specialized search services on its results page, the services of rivals will be displayed in a comparable way. The EC announced today that Google has offered an improved commitments proposal to end the inquiry that was opened in November 2010.

The latest concessions will not be market tested by industry participants. The EC has already sought feedback from interested parties twice on Google’s previous proposals. According to the EC, the relevant opinions of stakeholders are well-known. However, before a final decision is made on whether to make the commitments legally binding, the EC will consider feedback from the 18 formal complainants in the case.

The most significant commitment offered by Google is its agreement to 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 is clearly visible to users and comparable to the way in which Google displays its own services. The proposed remedy is 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. According to the EC, the independent monitoring trustee will play an active role in advising the EC in how Google will implement the commitments.

The new terms are in addition to earlier concessions that Google has made over the course of settlement discussions:

  • Google will give content providers an extensive opt-out from the use of their content in Google’s specialized search services if they so wish, without being penalized by Google.

  • Google will remove exclusivity requirements in its agreements with publishers for the provision of search advertisements; and

  • Google will remove restrictions on the ability for search advertising campaigns to be run on competing search advertising platforms.

In April 2013, Google made its first settlement offer to resolve EC antitrust concerns that were formally raised a month earlier. After receiving feedback from stakeholders, the EC informed Google that additional improvements to its commitments were required. Google offered changes to its commitments in October 2013. Again, the EC concluded that the company’s revised proposal was not yet sufficient to fully address the competition concerns.

Google’s second improved offer looks promising. The EC appears to have dropped its threats of adversarial proceedings and potentially hefty fines against the company.

“After a careful analysis of the last proposals we received from Google last month, and intense negotiations that managed to further improve what Google sent to us in mid-January, I believe that Google’s new proposals are capable of addressing the competition concerns I set out to them,” said Joaquin Almunia, Vice President of the European Commission responsible for Competition Policy, in a statement. “Therefore, from now on we will move forward towards a decision based on commitments.”

“The concessions we extracted from Google in this case are far-reaching and have the clear potential to restore a level playing-field in the important markets of online search and advertising,” Almunia continued. “No antitrust authority in the world has obtained such concessions. Remember that our colleagues from the FTC in the US investigated the same issues. Whilst it is true that they faced a different market situation, they did not require such far-reaching action from Google.”

Companies: Google, Inc.

MainStory: TopStory Antitrust

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