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Summary:

The European Commission is happy with Google’s latest antitrust settlement proposals, but the Microsoft-funded complainants say they must be given a chance to market-test what Google is proposing.

Google (GOOG)
photo: Getty Images / Justin Sullivan

The European Commission said on Wednesday that it is satisfied with Google’s latest antitrust settlement offer. Finally – and I say this with trepidation, given previous events and the intransigence of the complainants — the end to this four-year adventure may be in sight.

The Commission is investigating Google over a raft of allegedly anticompetitive practices that it uses to push its own services over those of rivals in its results, and to lock advertising customers into its network. Google had managed to allay most of the regulator’s concerns with its repeated settlement proposals, but the issue of how to display rivals’ services remained a major sticking point.

A new principle

Google has more than 90 percent of the European search market, which is why regulators have to keep such a close eye on the U.S. firm. On Wednesday, competition commissioner Joaquin Almunia said Google had agreed to adhere to a principle – for both existing specialized search services and Google’s future efforts – by which the search company will always display the services of 3 rivals in a way that’s comparable to how it displays its own.

According to Almunia:

“My mission is to protect competition to the benefit of consumers, not competitors. I believe that the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns. Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative. This way, both Google and its rivals will be able and encouraged to innovate and improve their offerings. Turning this proposal into a legally binding obligation for Google would ensure that competitive conditions are both restored quickly and maintained over the next years.”

The Commission specifically referred to specialized search services including products, flights and restaurants, so we’re talking about a radical shakeup of Google’s results pages, at least in Europe. This would involve, for example, rivals being given equivalent prominence to integrated Google services such as Product Search and even Google Maps results.

Here are a couple examples published by the Commission, showing how the new style would look:

Google settlement screenshot 1

Google settlement screenshot 2

As the Commission put it in a Q&A:

  • Users will be informed by a label of the fact that Google’s own specialised search services are promoted.
  • These services will be graphically separated from other search results, so the distinction with normal web search results will be clear.
  • For relevant specialised search services, Google will display prominent links to three rival specialised search services in a format which is visually comparable to that of links to its own services. For instance, if the Google links have images, the rival links will have images as well, including on mobile devices.

Rivals will have control of how they want to present their offerings and hence their business model.

As I have previously pointed out, though, it’s hard to see how this will work as Google moves into a streamlined, one-answer search future – think Google Now, with its natural language interface.

What about market testing?

If all goes well, an independent monitor would keep an eye on Google for a 5-year period to ensure compliance. The next step, however, is for the Commission to tell the complainants (who are backed by Microsoft) why it thinks the latest proposals pass muster. The complainants will then get a chance to complain some more before the Commission makes a final decision.

When reports emerged in late January that Almunia might finally be satisfied, the FairSearch group (comprising the complainants and again funded by Microsoft) said any solution would have to be market-tested first. On Wednesday another industry body called ICOMP (funded by… you get the idea) issued the following statement:

“A settlement without third party review is a massive failure. Complaints and others must see Google’s proposed commitments, not just the Commission’s analysis of why they will work. Hard data from market tests proved that the previous settlement would not work – we need time and opportunity to ensure full technical assessment of how effective the proposed remedies would be.

“Without a third party review, Almunia risks having the wool pulled over his eyes by Google. Having initially welcomed earlier proposals, effective market tests demonstrated their fatal flaws and the commission rightly rejected them. Why has Almunia chosen to ignore the expert advice of the market on this occasion?

“We do not believe Google has any intention of holding themselves to account on these proposals, and given the catastrophic effects on the online ecosystem that a proposal that doesn’t hit the mark will have, we would implore Commissioner Almunia to allow a full third party review of their submission as the very least the Commission can do in this landmark case.”

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  1. The reason as to why Microsoft and Apple so much hate Google is because of the Google support for open source software(tons of example), open, royalty free standards (video codec etc). And such actions from Google are putting Apple and MS lust for greed in danger…

    And that is why they are doing patent trolling, this ridiculous complain etc.

  2. If they really want to help consumers they should have a unpaid for shopping results based on the same principals of the best match not price gouging and what not.

  3. Moronic decision it just pushes the good quality results that have earnt their places in the organic results down even further…. 80 time out of 100 you pay more for stuff when it in google shopping…

    The best thing for the consumer would be to give the organic listing more prominence……

  4. Between Google nanny search, wispy, user search data mining in search engine and email, search promotion esp in regards to its own services, the do no evil needed reminding of its evil that it should stop doing. Taken to task on one or more, maybe they’ll return to said mantra.

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