European Commission not convinced by improved commitments offered by Google

by Gabriele Accardo

On 21 October 2013 Google offered improved commitments to the European Commission in order to close the three-year long investigation into four practices that the Commission considered had amounted to a possible abuse of dominance in breach of Article 102 of the Treaty on the Functioning of the European Union. Albeit not made immediately available to the public, the commitments have been leaked by a consumer association in the U.S (see Newsletter No. 2/2013 for additional background). The Commission sent a set of questions to the complainants and other relevant market participants to assess whether the improved commitments would be enough to settle the case without formal charges.

However, news reports as recent as last 20 December 2013 indicate that Competition Commissioner Joaquin Almunia is not happy about the improved commitments, in particular regarding the way Google’s rivals in vertical search are being treated. It appears that Google may have little time left to avoid a statement of objections (i.e. the opening of formal proceedings) by the Commission and potentially huge fines.

At a hearing before the European Parliament held on 1 October 2013, Commissioner Almunia briefly sketched the improved commitments that Google would be like to offer, without disclosing aspects protected by confidentiality, as was stressed by Almunia’s spokesperson.

While Almunia recalled that this is the first investigation in the online search space, he stressed also that this sector is particularly fast moving. Since the investigation was launched in November 2010, the way search results are presented and the kind of services provided have changed many times. Besides, the initial complaints focused on static devices, but in the meantime mobile devices have become more and more relevant, which led not only to the introduction of new search services but also to changes in the way users access and interact with existing services.

According to Almunia, the new proposal sought to more properly address the need for commitments to cover future developments, and in fact it relates to queries entered in Google in whatever form – whether they are typed or spoken – and irrespective of the entry point or the device.

Specialized search. With regards to the first concern, notably about specialised “vertical” search, Google’s improved proposal aims at making links to rival vertical search websites more visible. As in the original proposal, Google shall clearly label its “promoted” links, and even separate them from other web search results by clear graphical features, whereas it shall display links to three rival specialized search services close to its own results, in a place that is clearly visible to users. The three rivals would be selected from a set of sites within the “appropriate” Vertical Sites Pool (i.e. vertical search websites that meet specific standards) that have submitted a bid for the relevant keyword. An improved selection mechanism, which includes the option to bid for each specific query, shall determine the rivals’ ranking and ensure that even smaller specialized search operators can be displayed (i.e. the winning bids will not necessarily be the bidders with the highest cost-per-click bids). Google would allocate a larger space of the Google search result page to the three vertical links, whereas rivals will have the possibility of displaying their logo next to the link, and there will be a dynamic text associated with each rival link to better inform the user of its content.

Content usage. In order to address the Commission’s concern relating to the use of content produced by others, website owners will be able to opt out of display of content crawled by Google’s search user agents for their entire domain or for one or several of their sub-domains. Google commits not use the fact that a site has exercised this opt-out as a signal for determining ranking in generic search results, although it could not exclude indirect effects resulting from a certain parameter that is taken into account by Google’s Generic Search Ranking algorithms. Websites that have opted out may later opt in again. Specific opt out exclusion mechanism appear to be foreseen for “product”, “local”, and “travel” search sites as well as “news” sites.

Exclusivity requirements. Google has committed to no longer include any provisions or impose any unwritten obligations on publishers that would require them to source their online search advertisements exclusively from Google for queries from users based in the European Economic Area. The new proposal improves the safeguards against possible circumventions.

Finally, Google’s improved commitments would allow advertisers to manage search advertising campaigns across Google’s services and port their campaigns to competing services. Stronger guarantees against circumvention mainly relate to technical features of the commitment.

As stated by Commissioner Almunia, the ball is in Google’s court.