Almunia offers Google settlement talks

Last 21 may 2012, Competition Commissioner Joaquin Almunia made a statement on the progress of the on-going investigation into Google’s alleged abuse of dominance in the search engine market, which the Commission was investigating since November 2010 (see Newsletter 6/2010, p. 4 and Newsletter 2/2010, p. 9), following a number of complaints submitted by competing search engines that were specialised on specific topics.

Commissioner Almunia stressed that “these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement.”

The Commission identified four concerns where Google business practices might be considered as abuses of dominance under Article 102 of the Treaty on the Functioning of the European Union.

First, the Commission was concerned that in its general search results on the web, Google might be granting preferential treatment to its own vertical search services that compete with other players, which might be hurt as a consequence.

Secondly, the Commission was worried that by copying content from competing vertical search services, e.g. travel sites or sites providing restaurant guides, and using it in its own offerings, Google’s conduct could reduce competitors’ incentives to invest in the creation of original content for the benefit of Internet users.

The Commission was also concerned that Google was shutting out competing providers of search advertising intermediation services, insofar as the agreements between Google and the partners on the websites on which Google delivered search advertisements appear to result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google.

The fourth concern related to restrictions that Google put on the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. According to the Commission, Google imposed contractual restrictions on software developers which prevented them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.

It appears that Google may avoid a statement of objection, preluding to an even lengthier investigation and potential fines and remedies, if it comes up with an outline of remedies which are capable of addressing the Commission’s concerns and that may be made binding by means of a commitment decision. Any final proposal by Google will be market-tested before it is made legally binding by the Commission. [Gabriele Accardo]