Bloomberg News

Google’s Almunia Deal Said to Be Criticized by EU Officials (1)

February 12, 2014

European Union Antitrust Commissioner Joaquin Almunia’s deal to resolve a three-year-old dispute with Google Inc. (GOOG:US) was criticized by two EU officials at a meeting today, according to two people familiar with the matter.

Viviane Reding, the EU’s justice commissioner, and Michel Barnier, who leads financial-services policy, told Almunia at a regular meeting they were unhappy with his handling of last week’s settlement, said the people who declined to be named because the talks were private.

“We had a very long debate which shows that there are a lot of concerns and questions,” Barnier told reporters today in Brussels. “We haven’t finished our work on this subject.”

Google pledged last week to display results from rival search services in a settlement that will see it dodge EU fines and any finding that it discriminated against competing sites in its search results. The U.S. Federal Trade Commission dropped a similar investigation last year.

Almunia was criticized for not testing Google’s latest offer with rivals and customers, for failing to consult commissioners before accepting Google’s commitments and over options for publishers concerned about the use of content in Google’s news service, one of the people said. Commissioners have been lobbied intensively over the past week by groups opposed to the pact, another person said.

Update Commissioners

“Almunia provided an update to other members of the c college of commissioners on the state of play of the Google antitrust investigation,” said Antoine Colombani, Almunia’s spokesman, in an e-mailed statement. “He explained in a detailed way why Google’s proposals address our concerns and what the next steps will be.”

Barnier declined to comment on the details of the discussions, saying they were confidential.

Al Verney, a spokesman for Google in Brussels, declined to comment. A spokeswoman for Reding, couldn’t be immediately reached to comment after the meeting.

Politician’s attempts to influence competition decisions are “a worrying trend,” said Mario Mariniello, a research fellow at Brussels-based policy group Bruegel.

“Antitrust authorities should be very independent in the way they apply the law,” he said in a telephone interview. “I don’t think other commissioners should comment.”

Microsoft Complaint

Almunia must ask commissioners to make the Google settlement legally binding after he writes to 18 companies and groups, including Microsoft Corp. (MSFT:US), that filed complaints with the EU over Google. Their comments won’t change his mind about settling with Google, he said last week.

The deal would close one of the EU’s most high-profile antitrust cases as the bloc’s antitrust chief seeks similar settlements with OAO Gazprom (OGZD), Samsung Electronics (005930) Co. and Visa Europe Ltd. before he leaves office at the end of October. Breaking the terms of such a pact carries a penalty of as much as 10 percent of global revenue.

Barnier two years ago voiced concerns over Almunia’s decision to block a merger of Deutsche Boerse AG and NYSE Euronext. While Barnier raised objections at a meeting of commissioners, Almunia’s proposal to block the deal was approved unanimously.

Most decisions in antitrust cases are accepted unanimously by commissioners.

EU Fines

By settling, Google avoids the lengthy antitrust disputes and heavy fines meted out to other U.S. technology companies. Microsoft, the world’s biggest software maker, has paid more than 2 billion euros ($2.7 billion) in fines to the EU, while Intel Corp. (INTC:US), the largest chipmaker, got the EU’s highest ever penalty of 1.06 billion euros in 2009.

The five-year pledge to the European Commission lets Google add new services or alter its search page as long as it grants three links to rival services next to its own specialized search results such as Google Shopping, the EU said.

Competitors will pay at least 3 euro cents to bid for a spot in a shaded box on some of Google’s search pages.

Triggered by complaints from other Internet businesses, the EU’s probe examined allegations that Google promotes its specialist search services, such as Google News and Google Finance, copies competitors’ travel and restaurant reviews, and has agreements with websites and software developers that thwart competition in the advertising industry.

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net; Jim Brunsden in Brussels at jbrunsden@bloomberg.net

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


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