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Even if Google can settle it faces numerous more antitrust probes on other topics in the EU and U.S.

On Monday, Jonathan Todd, spokesman for the European Commission (EC) -- the European Union's (EU) market regulatory watchdog -- revealed that Google Inc. (GOOG) had reached out to the EC and promised to make serious changes to address allegations made by EU antitrust regulators.

I. EU Receives Google's Last Ditch Pitch

Mr. Todd told Reuters in a statement:

The Commission received a proposal from Google and is assessing it.

Google's spokesperson, Al Verney added:

Our proposal to the European Commission addresses their four areas of concern. We continue to work with the Commission to settle this case.

For Google -- who makes the world's most use mobile operating system, search, and internet advertising platforms -- it's been a bewildering ride with European antitrust regulators.  The company has been probed and threatened by the EU for over three years now.
Google fortified
Google has been warding off antitrust accusations from Microsoft, who runs the smaller rival "bing" search service. [Image Source: Fast Company]

The company can largely thank Microsoft Corp. (MSFT) for its EU antitrust woes.  Microsoft has led two key coalitions -- The FairSearch Coalition, whose members also include Expedia Inc. (EXPE) and TripAdvisor Inc. (TRIP), and ICOMP, whose members also include Foundem, Hot-map, Streetmap, and NexTag -- both of which filed complaints about Google, claiming that Google boosts the ranks of its own services when consumers use its search engine.

While this might sound like smart business, Microsoft alleges it's illegal, and it could be right due to Google's dominant position in the search market and the way EU antitrust laws are structured.

Also, Google is accused of "scraping" or gathering results from its competitors’ services using automated scripts to improve the quality of its own results.  Google does not deny doing some scraping; pointing out that Microsoft does the same.  However, given that scraping is a gray area in current antitrust laws, it is possible that Google could be viewed as committing antitrust abuses when it scrapes smaller competitors.

web scraping
Google has also been accused of abusive scraping [Image Source: Google Images/unknown]

Part of the problem is that in the EU Google has traditionally held a much larger piece of the market.  In the EU Google has held as much as 86 percent of the search market; currently it has around an 80 percent market share, according to Reuters.  This is much higher than in the U.S., where its market share is currently around 67 percent, according to market research firm Comscore.

II. More Antitrust Woes Loom for Google

But whether or not Google has abused its dominant position to further its own services like Gmail, Google Docs, Google Flights, and Google Shopping, it's hard not to feel a bit of sympathy for the chaotic way in which antitrust punishments for Google have been handled in the EU.

After being given a "last chance to settle" in May 2012, Google in Feb. 2013 released a full response, which promised big changes as to how it was scraping and ranking search results.  The EC initially accepted that proposal.  But after Microsoft and others claimed that the punishments weren't severe enough, the EC went back on its approval of the Google settlement and demanded more flesh from Google.

EU books antitrust
 The EU "changed its mind" about Google's settlement offer. [Image Source:]

The EC is a pretty fearsome regulator.  It has nailed Microsoft Corp. (MSFTwith multiple fines totaling around $2.8B USD over Windows antitrust abuses, plus pounded Intel with a $1.45B USD fine for allegations of CPU price fixing.  Its policies have been so aggressive that Apple, Inc. (AAPL) opted to settle in the EU over e-book price fixing accusations, while fighting similar accusations in the U.S.

Google is clearly prepared for the worst.  It has set aside $500M USD to pay for potential antitrust fines in the EU.

To make matters worse for Google, the U.S. debate over Google's search engine tactics has yet again resurfaced.  After probing Google, the U.S. Federal Trade Commission (FTC) agreed to a proposal where Google promised to make minor changes and would not face any fines.  The FTC even defended that decision against criticism by Microsoft and others who felt that the punishments were too light.  But recently the FTC has been rumored to be cooking up a fresh probe examining a new angle -- looking at whether Google's acquisition DoubleClick engaged in anticompetitive tactics in the search market.
Google Android
Google is also accused of using abusive tactics to promote its free Android operating system, which accounts for four out of every five smartphones and two out of every three tablets sold.

Google also faces allegation of abuse in the U.S. and EU of so-called "standards essential patents" (SEPs), which are supposed to be licensed under the "fair, reasonable, and non-discriminatory" (FRAND) rules.  Last, but not least, Google also faces a privacy probe in the EU, in which EC regulators have demanded Google make changes by the end of this month.

Privacy is another major issue Google is being grilled on. [Image Source: Inquistr]

In short, even if Google manages to win over the EU with its settlement proposal and escape fines, it still faces at least two more major topics of antitrust investigation in the EU, U.S., and elsewhere.

Source: Reuters

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RE: If You Cant Beat Em
By Alexvrb on 9/13/2013 11:25:21 PM , Rating: 2
Funny, I don't remember too many Googlebots crying when it was MS being hammered over IE (which didn't even have overwhelming dominance by that point).

RE: If You Cant Beat Em
By Reclaimer77 on 9/14/2013 8:55:36 AM , Rating: 2
Yes you did. Are you serious? The only people on here that actually supported that nonsense were a handful of Europeans.

RE: If You Cant Beat Em
By Alexvrb on 9/14/2013 6:29:40 PM , Rating: 1
"Form BS coalitions". Gee who are you referring to here? MS is clearly striking back after Google and Opera pushed for another round of fines for MS a while back. But I didn't see the Googlebots decrying Google's very similar role last go around. Many didn't like the EC's actions, but they gave Google and Opera themselves a pass.

RE: If You Cant Beat Em
By Camikazi on 9/14/2013 10:16:40 PM , Rating: 2
You were not reading if you didn't see people complain. I love Google, I use almost every one of their services and yet I was complaining and pointing out at every chance how it was wrong of them to go after MS and add that stupid browser select thing. From the checking I did on forums so was most everyone else, I'm not sure where you were looking.

RE: If You Cant Beat Em
By Bubbacub on 9/15/2013 4:02:38 PM , Rating: 3
handful of europeans?

more like a handful of unelected european beaurocrats sitting in brussels dreaming of ways to gift themselves more money

RE: If You Cant Beat Em
By harshbarj on 9/14/2013 4:16:04 PM , Rating: 2
The difference is that when you buy a computer you have almost no choice in os (mac is the only other true choice, and I'd even debate that). When you buy a computer it has windows pre-installed. Google on the other hand is a choice, the user chooses to use it.

That's not saying I fully agree with the decision, but I do see their point.

RE: If You Cant Beat Em
By Alexvrb on 9/14/2013 6:43:43 PM , Rating: 2
The recent fines I was referring to only involved RETAIL software. OEM wasn't affected. Oh, and you CAN buy or install other operating systems. Heck lots of people use lightweight almost-PCs now, too - such as Android, Chromebook, and iOS devices.

But frankly, that's irrelevant, since I was talking about the EC fining MS for bundling IE , rather than Windows itself. When an OEM preinstalls Windows and IE, that doesn't apply here either - the EC couldn't quite pull that one off. But Retail copies in the EU have a browser poll. Which is silly, because anyone capable of purchasing and installing a retail copy of Windows is capable of downloading a free alternative browser.

Yet, they repeatedly fined MS for bundling their own browser with their own OS, on retail copies of Windows in the EU. On top of this, MS offered to remove IE entirely, and the EC rejected this. They pushed them into offering a "browser poll" that offers competing browsers. I think retail copies of OS X should come with a browser poll too. :/

RE: If You Cant Beat Em
By spaced_ on 9/15/2013 7:05:31 PM , Rating: 2
Yes I never really understood why the EC went after Microsoft on this issue in the first place. As an example, it's not like Apple and Google don't bundle software with their OS's and no one's restricted by Microsoft from installing another browser in Windows. Users have a choice.

It's completely nonsensical technically and logically speaking to me, but legally speaking is a different matter. Read up on the case, in particular some of the case history between the EC and Microsoft and some of the judgements and it'll start making more sense to you. My fear is the precedent it sets in law. There is no reason why the EC can't do exactly the same thing to Apple or Google or any other company in future simply because they have a large market share. Bring on the iOS/Android lawsuits I guess.

There were a few points in the case that were completely justified though. For example, Microsoft provided financial incentives to PC makers to NOT install alternative browsers . This is clearly anti-competitive.

So, was this Google's fault? Did they lobby for this? Not as far as I know. If you can provide some evidence that'd happily sway my opinion.

But this particular case against Google - another quite stupid one afaict - probably wouldn't exist if it weren't for Microsoft's lobbying. Given all of Microsoft's anti-competitive practices of the past 20+ years, do you really think they're doing it for any other reason than their own bottom line and to gain leverage in the market? Lobbying governmental entities can be far more powerful in the tech industry than innovating, or competing fairly. Particularly when a large majority of the legal industry don't understand what a computer is and you have to compare it to something like a car.

RE: If You Cant Beat Em
By Kiffberet on 9/16/2013 7:47:47 AM , Rating: 2
What you're missing, is that Google are the dominant search engine in the EU. 80% of people use it, and with dominance in a market, comes a whole set of rules, which don't apply to other competitors.

"Users have a choice".

That school of thought doesn't apply, because you might love Google, so why change. Meanwhile, Google sells/shows you things that Goolge wants you to see. It may be all fine and dandy and you never complain, because you don't know that the service you searched for is a Google service. All other services are way down the search list or don't appear, because Google engineers the results to it's advantage.

The law takes a dim view of monopolies or market dominance, and for good reason.

RE: If You Cant Beat Em
By BRB29 on 9/16/2013 8:17:08 AM , Rating: 2
who cares?

Google is not harming the consumers. If they offer me the most refined products for the best bang-per-buck, then I don't care if everything comes from them. This doesn't mean that google is using its marketshare to force consumers. It means that their competitors are not competitive. Last I checked, google was the underdog starting out.

IKEA is knocking many businesses down everywhere they build a store. Does that mean they should go down in flames with lawsuits? No! they gave me decent quality products with smart designs and VERY AFFORDABLE.

What the EU is doing is forcing competitive companies to either help their rivals or slow down. This will end up like Intel where they will stall R&D just because their competitors are nowhere close. It saves them money and keep the lawsuits away.

What's next? Walmart should put Kmart ads in their store windows? It's not fair to Kmart that Walmart is dominating the retail business.

RE: If You Cant Beat Em
By Kiffberet on 9/18/2013 8:16:52 AM , Rating: 2

who cares?

The EU lawmakers care! And they make the rules.

If you don't like them, you have to change them, or go do business in another part of the world.

RE: If You Cant Beat Em
By spaced_ on 9/22/2013 2:08:42 PM , Rating: 2
Yeah this was actually what I was hinting on. It makes no sense to me why you should punish a company for being too successful. If they have abused their position in the market big penalties should be warranted.

However it appears in EU law you will be penalised if you simply have a dominant position in the market. Abuse or no. It seems you are obliged to advertise your competitors products for free as part of your own products as a penalty.

I agree 110% if google skews results in search for their own products they should be penalised but I have seen no real evidence of that and nothing that technically other companies such as Microsoft and Apple do themselves in the same manner.

Other countries or regions penalise companies for anti-competitive behaviour. EU law is different. Companies are also penalised if they become too successful.

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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