Google Offer Paves Way to End Antitrust Clash, Almunia Says

Google Inc. (GOOG) may be able to settle a European Union antitrust probe early next year, the bloc’s competition chief said, after the company bettered an earlier offer to alter how it shows search results.

“We have negotiated improvements until yesterday,” EU Competition Commissioner Joaquin Almunia said at an event in the European Parliament in Brussels today. “If our investigation of this improved proposal is satisfactory, I will continue the commitments route and end up with a formal decision next spring.”

The owner of the world’s largest search engine offered to allow rival search services to bid for the right to show their results to specific queries on Google’s webpage, Almunia said. It has promised to display links to specialized search services along with their logos. Google will commit not to stop online publishers from accepting other online search advertisements.

These commitments may allow the European Commission, the EU’s antitrust authority, to end a three-year probe into how Google promotes its own specialist search services, such as Google News and Google Finance, copies competitors’ travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry. Google made an initial offer earlier this year.

Photographer: Krisztian Bocsi/Bloomberg

Google Inc. offered to allow rival search services to bid for the right to show their results to specific queries on Google’s webpage, EU Competition Commissioner Joaquin Almunia said. Close

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Photographer: Krisztian Bocsi/Bloomberg

Google Inc. offered to allow rival search services to bid for the right to show their results to specific queries on Google’s webpage, EU Competition Commissioner Joaquin Almunia said.

“Given the feedback the European Commission received on our first proposal, they have insisted on further, significant changes to the way we display search results,” Kent Walker, senior vice president and general counsel at Mountain View, California-based Google, said in an e-mailed statement. “We’ve made the difficult decision to agree to their requirements in the interests of reaching a settlement.”

“Significant Improvements”

Almunia said he’d sought a better offer after receiving “very negative” feedback from rivals who examined the company’s previous proposals. While he’d earlier had “serious doubts” that a settlement was possible, he said the “significant improvements on the table” meant regulators could work on a deal. Google and the EU will now finalize the precise terms of a binding agreement, he said.

Google’s latest offer includes a commitment by the company “to support its new proposals with empirical data to show their impact,” Almunia said. Regulators will seek “concrete technical elements on the effectiveness” of Google’s proposal from its rivals before it decides whether the offer will satisfy antitrust concerns. The EU also wants to appoint an independent monitor to check that Google is sticking to the settlement, the antitrust chief said.

Strongest Criticism

Competitors’ strongest criticism of Google’s earlier proposal focused on how competing search services were displayed, Almunia said. The new offer makes links to rivals “significantly more visible” and “a larger space of the Google search result page is dedicated to them,” Almunia said. The links would be chosen by auction. Bidding for each specific query would allow smaller search operators’ results to be displayed, he said.

Google’s offer tightens terms that ensure it can’t harm websites that refuse to allow their content to be displayed on Google’s services, Almunia said. It will also end any restrictions that may prevent advertisers using search advertising terms across different online services.

Almunia told Bloomberg Television last month that Google had submitted a new proposal to address the commission’s competition concerns and help it settle the case. A remedies offer by Google in April to label its branded search services and show links to rival specialized search services was rejected as insufficient by Almunia in July.

Google rivals, including Microsoft Corp. (MSFT), have urged the EU to seek tougher concessions from the company. Competitors and users were able to review Google’s proposed remedies the first time around and are asking the Brussels-based commission to market test the latest offer, which is not public.

The EU is still examining “some aspects” of Google’s Android mobile operating system and hasn’t made a decision on whether to open a formal investigation, Almunia said.

To contact the reporters on this story: Stephanie Bodoni in Brussels via sbodoni@bloomberg.net; Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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