Improved Google commitments (closer to) getting the thumbs up from the European Commission

by Gabriele Accardo

On 5 February 2014, the European Commission issued a press release and a memo concerning the improved commitments proposed by Google (the commitments were made public by Google itself). At a press conference, Competition Commissioner Joaquin Almunia further clarified how the improved commitments finally address the competition concerns raised during the investigation, and stated that the Commission “will move forward towards a decision based on commitments” (see Newsletter 5-6/2013, Newsletter No. 2/2013, Newsletter 2/2010, for additional background).

The Article 9 decision, as such a decision is known, will thus bring to an end the 3-year long investigation into Google’s practices without a finding of an infringement of Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (“TFEU”), and will spare Google from a fine that might top 10% of its annual turnover. However, if Google breaches the commitments (which have 5-year duration), the Commission may impose a fine of up to 10%, like it did last year when it imposed a Euro 561 million fine on Microsoft (see Newsletter No. 1/2013 for additional background).

This third package of commitments focuses on how Google will ensure that rival specialised search services can compete fairly with Google’s services. In fact, as Competition Commissioner Almunia stressed, Google had already made significant concessions regarding the other concerns raised by the Commission:

  • Google will give content providers an extensive opt-out from the use of their content in Google’s specialised search services if they so wish, without being penalised by Google.
  • Google will remove exclusivity requirements in its agreements with publishers for the provision of search advertisements; and
  • Google will remove restrictions on the ability for search advertising campaigns to be run on competing search advertising platforms.

With regards to the concern relating to the way Google displays specialised search services (such as hotel, restaurant or flight search engines) on its own web search results pages, Google proposes to implement a threefold remedy for all its current and future specialised search services and for all search entry points (i.e. irrespective of how the search query is made):

  • Users will be informed by a label of the fact that Google’s own specialised search services are promoted.
  • These services will be graphically separated from other search results, so the distinction with normal web search results will be clear.
  • For the relevant specialised search services, Google will display prominent links to three rival specialised search services in a format which is visually comparable to that of links to its own services. For instance, if the Google links have images, the rival links will have images as well, including on mobile devices.

Accordingly, whenever Google promotes its own specialised search services on its web page (e.g. for products, hotels, restaurants, etc.), the services of three rivals, selected through an objective method (see below), will also be displayed in a way that is clearly visible to users and comparable to the way in which Google displays its own services. This principle will apply not only for existing specialised search services, but also to changes in the presentation of those services and for future services.

A visual representation of how the commitments will change the way we will experience Google’s search engine can be found here.

With regards to the selection of the services of three rivals, where Google does not charge for inclusion in its specialised search service, such as in local search, rivals will not be charged to participate in the rival links. Instead, they will be chosen based on their ranking in natural search. Conversely, where Google charges merchants for inclusion in its specialised search service, such as in Shopping, the three rivals will be chosen on the basis of a dedicated and transparent auction mechanism from the set of sites within the appropriate Vertical Sites Pool that have submitted a bid for the relevant keyword.

However, the winning bids will not necessarily be the bidders with the highest cost-per-click bids. For the purpose of selecting and ranking these sites, Google will multiply the sites’ bids and the relevant position-independent predicted click-through-rate (“pCTR”). The pCTR for a given query will be calculated using solely a machine-learning regression model that will rely only on objective and verifiable explanatory features and will follow standard industry practices for such models as described in the scientific literature.

Interestingly, Competition Commissioner Almunia stated that the Commission’s aim is not to artificially send traffic to sites that compete with Google, but to ensure that users are well informed of the existence of these competing sites and of their relevance to the user’s queries, and are given the possibility to access them. This sends a clear signal to complainants and competitors that argued that Google should not automatically be allowed to show its own specialized search services and should not require them to pay to feature prominently on Google’s page. In this regard, Competition Commissioner Almunia affirmed that the objective of the Commission is not to interfere with Google’s search algorithm, but to ensure that Google’s rivals can compete fairly with Google’s own services, and that the auction mechanism is an efficient way to select rival links. In brief, Google should not be prevented from trying to provide users with what they are looking for, Competition Commissioner Almunia stated. So be it.