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EU Google Case at "Crucial Passage," Almunia Says in DC

Joaquin Almunia, the top EU official in charge of competition policy, said in a speech Wednesday at Georgetown University Law Center that the European Commission is at a “crucial passage” in deciding how to proceed in its investigation over the search giant’s practice of using its dominance in Internet search to advantage its own products over competitors.

Almunia said he had told Google it must “improve its offer” to address the commission’s concerns, or it will issue a statement of objections, a formal set of charges that could result in a fine and other sanctions on the company. He said the “discussions are ongoing.”

“We will not have to wait a long time to see which of the routes will be chosen,” Almunia said, adding that he will decide on the next step within weeks.

In July, 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.

Google submitted a new settlement proposal earlier in September, Almunia said at the time. The details of the proposal have not been made public. Initial indications were that the newer proposal is not a significant change from the first, according to a recent report from the Financial Times.

FairSearch called Google’s first offer — to label its prominently displayed results and link to three competing sites — a fundamentally flawed solution that does more harm than good. Third party studies commissioned by FairSearch and German publishers have confirmed that Google’s first proposal would drive far more traffic to Google’s own sites than competing websites.

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.

If the latest proposal is fundamentally different, though, it should be market tested again to gather feedback from industry and consumer groups on its effects before the Commission makes a final decision on how to resolve the case.