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EU Says Google Antitrust Concessions Not Enough To Overcome Concerns

July 18, 2013

redOrbit Staff & Wire Reports – Your Universe Online

Proposals by Google to modify its search and advertising practices have failed to resolve concerns it is unfairly stifling competition, bringing closer the possibility of a legal dispute, the European Commission’s chief antitrust official said on Wednesday.

These proposals “are not enough to overcome our concerns,” said Joaquin Almunia, the antitrust head of the European Commission (EC), according to Reuters reporter Foo Yun Chee.

The remarks followed complaints by Google’s rivals that the search giant’s concessions were inadequate.

Almunia said he has written to Google chairman Eric Schmidt asking the company to rethink its response to antitrust concerns and “present better proposals” to assure regulators it is not thwarting competition.

Google, which currently has about 90% of the European market for Internet search, submitted its proposals in April to assure regulators that the company would not unfairly use its market dominance to suppress rivals.

Following Almunia’s comments on Wednesday, Google spokesman Al Verney said the company remains committed to settling the case, and that its offer “clearly addresses” the four areas of concern laid out by European regulators.

Those areas of concern include the way in which Google favors its own services in search results, its “scraping” of content from other websites, its management of ads accompanying search results and the effect its actions have on marketers’ ability to purchase ads through rival networks.

“We continue to work with the commission to settle this case,” Verney said according to Charles Arthur of The Guardian.

Although both sides of the dispute have said that they are committed to reaching a settlement, the EC could formally file a case if necessary, which would put Google at risk of being fined 10 percent of its worldwide annual revenue for “abuse of a monopoly position.”

In its proposal, Google offered to display links to rivals close to where it displayed its own services on search results pages, and would place “frames” around promotional links to more clearly label results from YouTube, Maps, Shopping and other Google-owned properties.

But lobbying firm Fairsearch, whose members include Google rivals such as Microsoft, Nokia and other smaller European web firms, questioned the effectiveness of such changes, arguing that anything that gave Google’s products more prominence would increase, rather than lessen, its dominance.

“It is clear that mere labeling is not any kind of solution to the competition concerns that have been identified. Google should implement the same ranking policy to all websites,” said Microsoft in a statement in April, according to BBC News.

Fairsearch cited a Consumer Watchdog survey that found more than half of the respondents did not realize that Google Shopping links were paid for. It also pointed to a study of 1,888 British users conducted last month, which found that “Google [services] benefit from better placement, richer graphics and better visuals than it permits competitors,” which resulted in one in five people clicking on Google’s services, while only 1 in 200 clicked on rival services.

This disparity was even greater among mobile phone users, where the smaller screen severely limits the number of results – and rival links – that can be displayed.

Fairsearch concluded that Google’s proposed modifications would have little, if any, impact on the existing monopoly, and may in fact strengthen it.

The EC’s investigation into Google’s practices began in November 2010. It was triggered by a complaint from British “vertical search” company Foundem, which revealed how results for Google-owned properties consistently scored higher than its own, despite no clear differences in the content or quality of the results.

Fairsearch has called for Google to make public the criteria it uses for promoting some search results above others in order to create a “level playing field” for those competing to be at the top of the search rankings, where approximately 90 percent of all desktop clickthroughs take place.

Almunia’s team has been investigating Google’s search dominance since the time of the complaint, and has even hinted that the EC could pursue legal action if Google does not provide a satisfactory solution.

Fairsearch also filed a complaint in March over what it claims is predatory pricing of Google’s Android operating system.


Source: redOrbit Staff & Wire Reports - Your Universe Online



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