Google’s Concession Accepted by the EU Antitrust Commission: Ends 3-Year Legal Battle

On Wednesday the EU Antitrust Commission accepted the latest and more comprehensive concession from Google. The offer is meant to settle the allegations that Google has been abusing its dominance in Internet searches, which effectively brings to a close the company’s three year battle with the commission. The concession will change the way Google displays some of the search results in the EU, to favor its competitors.

Still a winning move

Google might have been bruised by the concession but will come out of it as a winner as well. With the settlement, the company avoids getting embroiled in a longer legal battle. If Google failed to settle the case at this stage, it could have been fined 10% of its annual revenue, which translates to more or less $5 billion. Had Google persisted, it could have been forced to reveal is well-guarded algorithm. It could have been ordered to make major reforms in its products or its company structure.

The settlement

This is the third proposal that Google submitted to the commission according to Joaquin Almunia, the EU Antitrust Commission, who also thinks that the proposal is sufficient.

The original 18 plaintiffs are sent copies of the Google proposal for their evaluation. The final decision will come from the Commission, which could still be a few months away. The initial reactions from the plaintiffs were not favorable, which is echoed by the reactions of consumer groups. Commissioner Almunia though is positive that Google will eventually be given the nod.

How it works

In this latest proposal Google commits to display similar results from three competitors as well as its own search results. These will be displayed side by side, clearly labeled to show the Google-promoted services (in blue) and the natural search results (in green). It is then up to the user to make the final choice. The new search results will be displayed when using a conventional PC or laptop and mobile devices as well.

However, the results from competitors (top 3) will still be through the web search algorithm of Google, which the consumer groups and competitors are criticizing. Some search services will eventually pay through an auction mechanism to have a place in the search results.

Once the concession is approved, it will legally bind Google to the terms of the settlement for five years, which involves the 28 countries comprising the European Union, where Google has a 90% share in Internet searching.

Criticism

The competitors of Google are not impressed with the settlement. They wanted more time to review and test it. They believe that it will only increase the cost on the side of the rivals of Google and the discrimination will continue. For them the settlement only gives Google additional power over competition.

This latest settlement does not put an end to another ongoing antitrust investigation on the Android OS of Google according to Commissioner Almunia.

Photo credit: Taken by Fábio Rodrigues Pozzebom/ABr> under Creative Commons Attribution-Share Alike 3.0 Unported License.