Summary:

Europe’s competition chief thinks Google’s latest settlement proposals are better than their predecessors, so — unless rivals such as Microsoft find hidden loopholes — a deal should follow next spring.

Google (GOOG)
photo: Getty Images / Justin Sullivan

Three and a half years after European competition regulators first started poking around Google’s search business, a deal is in sight – that is, if the companies whose complaints kicked this all off, Microsoft included, don’t find any loopholes in Google’s latest settlement proposals.

That, after all, is what appears to have happened with proposals Google made back in April of this year. The European Commission nixed those concessions in July after the company’s rivals turned them down, but Google came back with tighter concessions. And this time, the Commission seems to think they might work.

Improved safeguards

On Tuesday, Competition Commissioner Joaquin Almunia outlined Google’s latest proposals for fixing the Commission’s four specific concerns.

A quick reminder of those concerns (and remember, Google has a 90 percent share of the European search market, versus around two-thirds in the U.S.):

  • Google promotes its own services in its results without this being clear to the user. Industry-specific vertical search outfits see their services downgraded in Google’s results, sometimes not appearing on the first page.
  • Google scrapes content from third-party vertical search rivals without their permission.
  • Google bans publishers who use its advertising from displaying search ads from Google competitors on their websites.
  • Google’s contracts forbid advertisers from porting their campaigns to rival search ad platforms.

In the case of the last two concerns, little has changed from Google’s earlier settlement proposals (which amounted to “We will stop doing this”), other than the addition of more safeguards against what Almunia called “possible circumventions.” This suggests Microsoft et al found potential loopholes, which have now been sewn up.

Clearer results

As for the first concern, Almunia said the new proposals set aside “a larger space of the Google search result page” for results coming from those vertical rivals. The rivals will also get to put their logos next to those results. Google’s ad auctions will also allow bids for specific queries, in a boost to smaller specialized search operators.

Regarding Google’s scraping of content, the company had previously offered an opt-out for those who didn’t want their content to be hoovered up and regurgitated. Now, that opt-out is more granular and there are tighter provisions to make sure Google can’t “retaliate” against those who choose to use it.

In addition to all this, the new proposals include an “independent monitoring trustee” who would make sure Google is doing what it promised to do.

Interestingly, Almunia stressed that the new proposals will also relate to both typed and spoken queries, on both desktop and mobile devices – this suggests to me that there might be an impact on Google Now, as well as traditional search results.

Next steps

Europe’s competition chief indicated that he thought the new proposals were an improvement, and pointed out that his team had been negotiating further improvements with Google up until Monday. Here’s what he said about the path forward:

“As a next step, I will seek feedback on the improved commitments proposal from complainants and other relevant market participants. To that end, we will send information requests… on the improvements that are being proposed.

“We know the general positions of the complainants and other stakeholders. What we need now is to receive concrete technical elements on the effectiveness of the proposed package in order to conclude whether this new proposal is satisfactory from a competition point of view.”

If there are no serious objections, the settlement will probably be set in stone in the spring of 2014. If the new proposals don’t make the grade, the sorry saga continues and Google will be looking at bans, fines and other nastiness that it would no doubt rather avoid.

Remember, though, that this is only one of three EU antitrust probes in which Google is involved. There’s also the Motorola standards-essential patents case (“The investigation is well-advanced,” Almunia said) and a preliminary-stage investigation over Android. So Google’s European counsels and Almunia’s staff will have plenty to discuss over the coming months and perhaps years, whether or not they reach a settlement over search.

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