Google Inc. (GOOG:US) must present the European Union with “better” proposals if it wants to settle the almost three-year-old EU antitrust probe into the way it operates its search service, the bloc’s competition chief said.
Google’s offer in April, which included “clearly” distinguishing its own search services from those of rivals for five years, won’t be sufficient to allay the EU’s concerns, EU Competition Commissioner Joaquin Almunia said at a press conference in Brussels today. He said he wrote to Google Chairman Eric Schmidt asking to improve their offer.
“The proposals that Google sent to us months ago are not enough to overcome our concerns and in this sense I wrote a letter to the president of Google, to Mr. Schmidt, asking Google to present better proposals, or improved proposals,” said Almunia.
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 probe. Competitors and users had two months, until June 27, to send comments on the proposed remedies, which the EU will consider before reaching a decision.
Google’s remedies seek to address concerns that the company promotes its own specialist search services, such as Google News and Google Finance, copies rivals’ travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry.
The EU probe also includes any search services Google may develop in the future.
“Our proposal to the European Commission clearly addresses their four areas of concern,” Al Verney, a Brussels-based spokesman for the Mountain View, California-based company, said by telephone today. “We continue to work with the commission to settle this case.”
In addition to fining companies for antitrust violations, the Brussels-based commission may impose orders to change the way firms operate. The authority can also penalize companies for failing to live up to the commitments made as part of an antitrust settlement.
While Almunia has sought a deal to end the Google matter, Google rivals have stepped up pressure to block any settlement. The commission has received “very negative” feedback from Microsoft Corp. (MSFT:US) and other companies, Cecilio Madero, the EU’s deputy director-general for antitrust, said in June.
“Google’s proposed commitments across the board retard rather than promote competition; they do more harm than good,” Thomas Vinje, a Brussels-based lawyer for FairSearch Europe, said in a statement today. Google’s proposed changes “attract the vast majority of searchers to the company’s own products, and discourage them from visiting rivals, according to a study commissioned by the group.
FairSearch, which represents companies including Microsoft, Expedia Inc. (EXPE:US) and Nokia Oyj. (NOK1V) said April 9 that it had filed a separate antitrust complaint against Google over its Android operating system on mobile phones. In addition, Google’s Motorola Mobility unit is the subject of another EU probe related to patent licensing.
Google will face a so-called statement of objections if settlement discussions don’t succeed, Almunia said in a speech in Madrid, Spain, on June 27.
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