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Google Behavior Risks Banning Order If Talks With EU Fail (1)

June 27, 2013

Google Search Engine Risks Partial Ban If Talks With EU Fail

Attendees during the Google I/O developers conference at the Moscone Center on May 15, 2013 in San Francisco, California. Photographer: Justin Sullivan/Getty Images

Google Inc. (GOOG:US) risks a ban of some of its actions if settlement talks with the European Union fail to solve competition concerns, the EU’s antitrust chief said today.

If negotiations don’t succeed, “there is a tougher way to handle it,” EU Competition Commissioner Joaquin Almunia said in a speech in Madrid. That would mean issuing a so-called statement of objections and ultimately a decision “prohibiting” certain behavior, he said.

Google, the owner of the world’s largest search engine, in April offered to label its branded search services and show links “to three rival specialized search services close to its own” as part of a series of commitments to end the almost three-year-old probe. Competitors and users had until this week to send comments on the proposed remedies, which the EU will consider before reaching a decision.

While Almunia has sought a deal to end the case, Google rivals have stepped up pressure to block any settlement. The European Commission has received “very negative” feedback from Microsoft Corp. and other companies, Cecilio Madero, the EU’s deputy director-general for antitrust, said earlier this week.

“Google has to decide whether it improves the planned solutions it presented,” Almunia said. “Depending on Google’s response and the market test I have to decide whether we reach an accord,” he said.

“Working with the hypothesis that it’s possible to reach a deal, it will probably be reached by the end of this year.”

Without an agreement, the process toward a possible ban on some of Google’s actions “will probably extend until next year,” said Almunia.

‘Sensible Solution’

Al Verney, a spokesman for Google in Brussels, declined to comment beyond a blog posting earlier this week by Kent Walker, Google’s senior vice president and general counsel.

Google is seeking a “sensible solution” and thinks “we did a pretty good job” in addressing the commission’s concerns, Walker said.

Google’s remedies seek to address allegations that the company promotes its own products, such as Google News and Google Finance, in search results, and copies competitors’ travel and restaurant reviews. The EU also says Google has agreements with websites and software developers that stifle competition for advertising.

Motorola Mobility

Google’s Motorola Mobility unit was sent an EU antitrust complaint in May for abusing its dominant position as part of a probe into its control of key patents in gadgets such as Apple Inc. iPhones and iPads.

The EU is also continuing a probe into Google’s Android operating system for mobile phones and tablets and “in which ways it poses barriers that may be anti-competitive,” Almunia said today. “Google is perfectly aware of this, because we have communicated this to them.”

As well as fining companies for antitrust violations, the Brussels-based commission can impose orders on companies to change the way they operate. The authority can also penalize companies for failing to live up to promises made as part of antitrust settlement talks.

Microsoft was fined 561 million euros ($731 million) by the EU authority for violating the terms of a settlement to give users a choice of web browsers aside from its Internet Explorer.

To contact the reporters on this story: Patricia Laya in Madrid at playa2@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

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


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