EU Decides Google's Settlement Proposal for Antitrust Investigation Isn't Enough
July 17, 2013 2:09 PM
comment(s) - last by
The search company could get stuck with a fine of $5 billion if it can't convince the EU to settle
Google may have gotten out of the U.S. Federal Trade Commission (FTC) antitrust investigation without much of a penalty earlier this year, but the European Commission
isn't giving in so easily
European Competition Commissioner Joaquin Almunia said that Google's proposal for ending the investigation wasn't going to cut it.
"I concluded that the proposals that Google sent to us are not enough to overcome our concerns," said Almunia.
The European Commission opened a formal antitrust investigation into Google's search behavior in November 2010.
In May 2012, the European Commission said that Google should submit changes in how its search results are wired. Google said it would in February of this year.
In April, Google submitted a settlement proposal that didn't change the algorithm used to create its search results. Rather, the company opted to clearly label any search results from its own services. Not only that, but in some instances, Google will offer links from rival search engines.
More specifically, services where Google doesn't make money from search results (like weather and news) would have been labeled as Google services. For places where Google sells ads, links to at least three competitors would've been displayed. For services like Google Shopping, links to rivals would be auctioned.
In addition, the proposal aimed to give websites the option to keep their content from vertical search properties, but stay in general search results. Furthermore, Google wanted to help small businesses move their ad campaigns to other search engines.
While the European Commission
initially accepted this proposal
, Google rivals like Microsoft weren't happy with the proposal. Microsoft said that Google is a determining factor as to what Europeans search, read and purchase online (about 86 percent of Europeans use Google for search) and that its practices are only benefitting itself; not consumers and fair competitors.
It was announced in late April that Google competitors had
one month to comment
on the EU invesitgation, and it looks like Google's rivals voiced their opinions against Google's proposal.
It's not clear when Google has to respond to the EU's latest decision, but the search company could get stuck with a fine of $5 billion if it can't convince the EU to settle.
In January of this year, Google managed to escape a two-year FTC investigation
with no fines
. The investigation looked into Google's possible abuse of search dominance as well by using results to its own advantage.
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RE: I'm confused
7/18/2013 3:50:36 AM
As soon as a company enters monopoly territory they're under scrutiny by the EU. Keep in mind, the EU wanted to agree to the earlier deal, but after bitching by other companies such as Microsoft for being unfair they took another look. Last I checked Microsoft was American as well by the way. You're calling this a shakedown, I'm calling it American companies abusing yet another legal system to stifle innovation and hurt each other. Only difference is this time they crossed the pond to do it.
In addition it's not about Google obtaining such a market share, it's what they do when they have it. Apparently they manipulated search results, thereby abusing the monopoly position they're in. This leads, or has led, to an unhealthy market and yes us Europeans are fan of heavy markets and feel at least some regulation should be in place for this to happen. Here's probably where we have a difference in ideology so that's where the whole argument will stall most likely, but let's see where we end up shall we? :)
RE: I'm confused
7/18/2013 3:54:44 AM
I would also like to add that the money flows into EU funds yes. It would cost way more to find out which individual persons were actually harmed by these practices so in general they flow into the big pot so every citizen in the EU gets to pay slightly less taxes. More efficient way of doing it I suppose, but not the fairest :)
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