Google Proposal Doesn’t Yield Results for European Commission


Google Inc.’s (NASDAQ:GOOG) October offer to the European Commission to settle an antitrust case that began in 2010 did not win support from the Commission, which after reviewing the matter, finds the proposed terms unsuitable. Google could be fined as much as $5 billion for blocking competitors links in search results.

European Union competition commissioner Joaquin Almunia explained the Commission’s views in a Spanish radio interview Friday. ”The latest offer as submitted by Google in October, the latest proposals are not acceptable in the sense that they are not proposals that can eliminate our concerns regarding competition,” Almunia said. The Economic Times carried a partial transcript of the interview. The interviewer asked Almunia if the Commission had immediate plans for sanctions against the search giant. ”No, no, no. At this moment, there is little time left, but the ball is still in Google’s court,” Almunia said. However, the ball would soon return to the Commission, ”and then it will be the moment to take decisions.”

The Google probe began in 2010, based on allegations that Google was abusing its position as the dominant online search engine. “The opening of formal proceedings follows complaints by search service providers about unfavourable treatment of their services in Google’s unpaid and sponsored search results coupled with an alleged preferential placement of Google’s own services,” the Commission said in November 2010.

Recently, the Initiative for a Competitive Online Marketplace (or, ICOMP) commissioned an eye-tracking study, conducted by The Institute of Communication and Media Research, at the German Sport University Cologne. ICOMP noted that Google’s attempts at addressing the allegations laid against them in the probe. ”In response to these charges Google has been asked to propose remedies that will stop this abuse and prevent it happening in future. However, Google’s second attempt at providing a workable, fair and effective solution (the first was rejected by the commission and online stakeholders in July) appears not only to fail in halting the abuse, but, as this research shows, actually makes the abuse worse,” ICOMP said in a statement.

ICOMP Legal Counsel, David Wood stated the “results give a clear signal of what we can expect from Google’s rival links proposal — an ineffective remedy and the potential for increased abusive behaviour by Google. Acceptance of these proposals by the Commission will serve to further and irrevocably entrench Google’s dominance. What is more, these new proposals give Google the power to further monetize its abusive behaviour by forcing small and large competitors to pay Google for the right to feature in these ‘rival links’ listings.”

Wood urged the Commission to consider the survey when making a decision about the anti-trust case. Thomas Vinje, a spokesperson for FairSearch Europe, agreed with Wood. “The data proves that Google has no interest in restoring competition or in offering consumers the best search results,” Vinje said in a statement. “The proposal does not fix the problem the Commission identified back in 2012. It hurts consumers.”