Roughly a year after Google settled an antitrust investigation with the US Federal Trade Commission, Bloomberg is reporting that Google and the European Commission have reached a final settlement that would end the regulator’s antitrust search investigation against the company.
According to the report, “Google will escape fines or any finding by regulators that it may have discriminated against competing search sites.” Google similarly escaped any significant fines or penalties in the US investigation.
The heart of the controversy as it has evolved — and the core of the settlement — is Google’s presentation of “rival links” to competitors and alternative sites beside its “own results” on the search results page (SERP). In the past the so-called rival links were not seen driving sufficient amounts of traffic to the included sites. However Google has apparently “improved” or enhanced the showing of rival links in a manner sufficient to overcome that concern.
Originally there were “four areas of concern” raised by European Commission against Google. But the focus of the case has always been Google’s universal or vertical search results and the degree to which they were crowding out third party sites. It’s unlikely that Google’s actual rivals will agree that this settlement addresses the concern. One reportedly called the deal a “disgrace” in an anonymous comment provided to TechCrunch.
We haven’t seen what the new settlement and rival links presentation looks like or what is different compared with the earlier versions. I’m sure more details will be forthcoming. There was a press conference in Europe earlier today announcing the settlement and discussing the deal in broad terms (I did not hear it).
In many (if not most) cases the “rivals” will pay “at least 3 euro cents (4 U.S. cents)” for a coveted place among the links. It amounts to a new, dedicated paid search position on the SERP.
The deal is being praised by EU Competition Commissioner Joaquin Almunia who, in a statement said, the settlement terms offer a “real choice between competing services presented in a comparable way.” This contrasts with earlier “market tests” and sponsored research that complained of the opposite.
Bloomberg explains that under the terms of the agreement Google will be allowed to control the look of its SERP and add new services “as long as it grants three links to rival services next to its own specialized search results.” My understanding is that there are no further approvals required for the settlement to become final. I don’t know what impact if any the settlement will have on any pending civil lawsuits against the company.
There’s another antitrust-related investigation of Android in progress in Europe that reportedly won’t be impacted by this settlement. However this is a major bullet dodged by Google.
We’ll update this post with any direct or new statements from Google and other details as we discover them.
Postscript: Apparently “the complainants” will get one last bite at the apple, so to speak. The EU press release published this morning says that after the terms are published Google critics and rivals will get an opportunity to make their concerns (read: objections) known before the EU givens final final approval:
The Commission will in the coming period inform the complainants in this case of the reasons why it believes Google’s offer is capable of addressing the Commission’s concerns. The complainants will then have the opportunity to make their views known to the Commission before the Commission takes a final decision on whether to make Google’s commitments legally binding on Google.
Postscript 2: Microsoft issued the following statement about the settlement, attributed to General Counsel and EVP Brad Smith:
For decades transparency has been a hallmark of the Commission’s competition proceedings, and it should not be sacrificed today. As Vice President Almunia has acknowledged, market testing of Google’s last two proposals identified serious and wide spread concerns about the damage they would have done. If these new proposals are materially better than those that have already been rejected then they should be broadly market tested. If this is really a good deal for consumers then the data will confirm it.