Search engine giant Google Inc (NASDAQ:GOOG) finally reached an agreement with the European Commission to settle the three year antitrust complaint filed against it by competitors.
EU concerns
According to Joaquin Almunia, vice president of the European Commission responsible in Competition Policy, the latest proposals of Google Inc (NASDAQ:GOOG) will be able resolve the competition concerns raised against it.
Almunia said the negotiation between the commission and the search engine giant was intense over the last weeks, and the focus was to ensure that its competitor’s specialized search services will be able compete fairly with Google services.
The European Commission raised three concerns to Google Inc (NASDAQ:GOOG) including the comparable presentation and improvement of rivals links to Google services, and the fact that any commitments must retain relevance throughout their lifetime, which means any vertical search services developed by the company must be subject to the commitments.
Google guarantees comparable presentation of services
“To address these concerns, Google has finally accepted to guarantee that whenever it promotes its own specialized search services on its page, the services of rivals will also be displayed in a comparable way,” said Almunia.
Almunia explained that if Google Inc (NASDAQ:GOOG) promotes one of its own specialized services on its page, it will also prominently display the services of three rivals. According to him, “rivals will not be charged to participate in the rival links, but will be chosen based on their ranking in natural search.”
Google also agreed to give content providers an extensive opt-out from the use of their content in its specialized search services, it will remove exclusivity requirements in its agreements with publishers for the provision of search advertisements, and it will also remove restrictions on advertisers who run their search campaigns on competitors’ search platforms.
Almunia also emphasized that he disagreed with the opinion of certain stakeholders that Google Inc (NASDAQ:GOOG) should not be automatically allowed to show its own specialized services. According to him, the objective of the commission is to ensure that Google’s rivals can compete fairly with Google’s services and “not to interfere” with its search algorithm.
Furthermore, Almunia explained that the payment proposed by Google is only required for commercial categories to be included in its own specialized services. There is no payment for all forms of rival links. He pointed out that the auction mechanism for commercial categories is an efficient way to select rival links.
Far reaching concessions
“The concessions we extracted from Google in this case are far-reaching and have the clear potential to restore a level playing-field in the important markets of online search and advertising. No antitrust authority in the world has obtained such concessions. Remember that our colleagues from the FTC in the US investigated the same issues. Whilst it is true that they faced a different market situation, they did not require such far-reaching action from Google,” said Almunia.
