Bloomberg News

Google Given Weeks to Submit Remedies in EU Antitrust Probe

May 21, 2012

Google Inc. is under growing pressure from global regulators probing whether the company is thwarting competition in the market for Web searches. Photographer: SeongJoon Cho/Bloomberg

Google Inc. is under growing pressure from global regulators probing whether the company is thwarting competition in the market for Web searches. Photographer: SeongJoon Cho/Bloomberg

Google Inc. (GOOG:US) was told by the European Union’s antitrust chief it has a “matter of weeks” to resolve a probe and avoid possible fines over allegations that the operator of the world’s largest search engine discriminates against rivals.

EU Competition Commissioner Joaquin Almunia asked Google Chairman Eric Schmidt for proposals to address concerns that it promotes its own specialist search services, copies rivals’ travel and restaurant reviews, and that its agreements with websites and software developers stifle competition in the advertising industry.

“I hope that Google seizes this opportunity to swiftly resolve our concerns,” Almunia told reporters at a press conference. “These fast-moving markets would particularly benefit from a quick resolution of the competition issues identified.”

Google, based in Mountain View, California, is under growing pressure from global regulators probing whether the company is thwarting competition in the market for Web searches. The U.S. Federal Trade Commission and antitrust agencies in Argentina and South Korea are also scrutinizing the company.

Google disagrees with the commission’s conclusions and is “happy to discuss any concerns they might have,” said Al Verney, a Brussels-based spokesman for the company, in an e- mailed statement.

“Competition on the Web has increased dramatically in the last two years since the commission started looking at this and the competitive pressures Google faces are tremendous,” Verney said.

Google shares (GOOG:US) rose $9.70 to $610.10 at 10:35 a.m. in New York trading.

Android

Complaints over Google’s Android operating system and the way the search engine deals with travel agencies are among “other issues” that will continue to be investigated, Almunia said.

Any settlement proposals from Google would be reviewed by the company’s competitors and rivals prior to being accepted by the EU authority.

“Will Google step up to the plate with serious effective remedies or will it put something on the table which is not truly serious?” said Thomas Vinje, a lawyer for FairSearch, an industry group that includes online travel companies Expedia Inc. (EXPE:US) and TripAdvisor Inc. (TRIP:US), which filed complaints about Google with the EU. Google’s offer “needs to genuinely resolve the concerns and re-establish competition,” Vinje said.

Competitive Internet

Foundem, a U.K. shopping website, said it was crucial to devise “pragmatic and robust measures that restore a healthy competitive Internet” without harming Google’s ability to innovate, company Chief Executive Officer Shivaun Raff said in an e-mailed statement.

Microsoft Corp. (MSFT:US), the largest software maker, whose Bing search engine filed a complaint in the case, declined to comment on Almunia’s statement.

EU regulators are increasingly using settlements to end antitrust probes. Almunia last year invited Thomson Reuters to settle with regulators for a “speedy resolution” of a probe. Apple Inc. and four publishers recently offered to settle another case, the commission said last month.

Microsoft ended more than a decade of antitrust disputes with the EU in 2010 by agreeing to allow users choose web browsers. International Business Machines Corp. (IBM:US), the biggest computer-services provider, last year settled an EU antitrust probe into conduct that may have hindered rival mainframe- software makers.

Adversarial Proceedings

“Restoring competition swiftly to the benefit of users at an early stage is always preferable,” Almunia said. Google has “repeatedly expressed” its willingness to discuss concerns “without having to engage in adversarial proceedings.”

Regulators in 2010 started investigating claims that Google discriminated against other services in its search results and stopped some websites from accepting rival ads. While Microsoft and partner Yahoo! Inc. (YHOO:US) have about a quarter of the U.S. Web- search market, Google has almost 95 percent of the traffic in Europe, Microsoft said in a blog post last year, citing data from regulators.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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Companies Mentioned

  • GOOG
    (Google Inc)
    • $526.94 USD
    • -7.87
    • -1.49%
  • EXPE
    (Expedia Inc)
    • $72.48 USD
    • -1.06
    • -1.46%
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