Almunia to Decide on Next Steps in Google Competition Probe in ‘Coming Weeks’

Joaquin Almunia, the top EU official in charge of competition policy, said Friday that he is nearing a decision on how to resolve the European Commission’s nearly three-year investigation into Google’s search and other business practices.

Friday, Almunia said in a speech in Florence, Italy that he will determine in the “coming weeks” whether to turn Google’s latest proposal into “legally binding commitments” or pursue a formal complaint against the company and charge it with violating EU competition laws by abusing its dominance in Internet search and search advertising.

He summarized his objective in the case as follows:

“It is my responsibility to ensure that Google does not abuse this gatekeeper role in the EU to push its own services against those of competitors who may be just as innovative.”

Almunia told Bloomberg TV earlier last week that Google submitted a new offer to settle the probe. The details of the proposal have not been made public.

In July 2013, Almunia rejected Google’s first offer and asked for a new proposal. This came after Google’s draft settlement offer was widely criticized by business and consumer organizations during a ‘market test’ to gather feedback on its impact.

FairSearch spokesman Thomas Vinje in July called Google’s first offer to label its prominently displayed results and link to three other sites a fundamentally flawed solution: “Google’s proposed commitments across the board retard rather than promote competition; they do more harm than good.”

A survey commissioned by FairSearch to test Google’s first proposal found that it would attract the vast majority of searchers to the company’s own specialized Internet search products, and discourage them from visiting other sites.

In a mock-up of Google’s proposal, one in five desktop Internet users clicked on Google’s commercial web services, such as “Google Shopping”, but only one in 200 clicked on those of its rivals. Only 1 in 1,000 of those surveyed clicked on links to rivals in a mock-up of Google’s mobile version of its proposal.

The study also found that more than half of those surveyed did not realize Google Shopping is entirely paid content.

However, according to a report from the Financial Times on Friday:

“Those involved in the talks say the revisions fit within the broad outlines of the draft deal, which requires Google to list more of its competitors’ services, rather than comprehensively rewrite the terms to achieve a more radical outcome.”

FairSearch’s Vinje said last week, “Given the failure of Google to make a serious offer last time around, we believe it is necessary that customers and competitors of Google be consulted in a full, second market test.”

A settlement would achieve the goal of ending Google’s abuse of its gatekeeper role on the Internet if there are positive answers to these questions:

• Does Google apply the same rules to its own services as it does to others when it returns and displays search results?
• Does Google always provide the user with the most relevant results at the top of the search page, even if those come from non-Google sites?
• Is Google prevented from blacklisting competing companies or categories of companies from appearing in the top search results (for example, online travel agencies or metasearch sites)?
• Is Google prevented from using the quality scores and minimum bids it assigns to each website as a pricing mechanism to exclude competitors from appearing in the top display of search results?

If Google’s new proposal to the European Commission offers only cosmetic changes to its first proposal, formal proceedings by the European Commission may be the only way to get Google to end its anti-competitive practices. The case is too important to consumers’ ability to benefit from European businesses contributing to the Internet to simply end the case without an effective solution.