Google Lawyer Says EU Settlement Offer Is Fair to Rivals

By Todd R. Weiss  |  Posted 2013-11-26 Print this article Print

In a 16-page response to Google's latest settlement offer upgrade, Adam Raff and Shivaun Raff, the co-founders of Foundem and, wrote on Nov. 21 that they "disagree with any suggestion that Google's revised proposals are an improvement over Google's previous proposals, let alone a 'substantial improvement.'"

Instead of solving the antitrust allegations, Google's latest settlement offer continues to cause grievous harm to rivals, the Raffs argue. "It is easy to understand why Google is doggedly pursuing a settlement based on these proposals, but it is inexplicable that the Commission would even entertain it. If adopted, Google’s proposals would effectively hand Google a five-year mandate to extend its monopolization of horizontal search into a monopolization of Internet commerce. We urge the Commission to reject Google's revised proposals, issue its Statement of Objections, and insist on remedies that will end, rather than escalate, the abusive practices it has identified."

The world is still waiting to hear what the EU and the EC decide about the arguments from both sides.

Also in October, the EU asked Google rivals for their opinions on the latest settlement offer from Google, which inspired the terse Foundem response. A settlement is on the front burner as a way to resolve the three-year-old antitrust case against Google in Europe. The feedback will help the EU make its decision on whether to accept Google's latest settlement offer, which came in late September.

In September, Google had submitted a fresh batch of concession proposals to the EU, but they failed to address the key concerns of the EU and the complainants in the case, which began in 2010.

Those proposals arrived two months after the EC had asked for more concession ideas from Google. The EC had been seeking Google's ideas on how it could settle complaints that the company was blocking competitors' results in Web searches in favor of its own results.

Google officials are under investigation in Europe regarding its search engine, which holds more than 60 percent of the search market, with Microsoft's Bing being a distant second. Competitors have claimed that Google works its search algorithms to favor its own products and results over those of others, giving it an unfair advantage in search and Web advertising.

If the case would go to trial, a guilty verdict on such charges could mean a fine of up to 10 percent of Google's annual revenue, which based on its 2012 annual results, could amount to about $5 billion.

In an earlier round in April, Google proposed several concessions that were apparently not seen as going far enough. The company had offered to improve how it labels ads in its search engine to make them clearer, and to change and improve how it displays links to competitors' ads in search. Proposed under the deal was a plan for a month-long "market test" of the arrangement to provide competitors, many of whom are behind the antitrust complaints against Google, some time to offer their input into whether the proposed changes are sufficient.

Another change under the April proposals was that Google would allow Websites to keep their content out of Google's specialized search services, while ensuring that any opt-out does not unduly affect the ranking of those Websites in Google's general Web search results.

Google had also sent an earlier batch of concession ideas to the EC in January, which was the second batch since an initial offering in July 2012, when Google executives sent a list of initial concessions to address the potential antitrust concerns. At that time, Google Chairman Eric Schmidt sent a letter to Almunia that outlined steps the massive Web company would be willing to take to resolve the EU's concerns, including claims that it favors its own search results over those of others.

Google's legal situation in Europe continues even as a similar antitrust probe in the United States was resolved in Google's favor in January 2013. Instead of a major antitrust prosecution in the United States, Google entered into a voluntary agreement with the Federal Trade Commission to change some of its business practices to resolve the complaints of some competitors about Google's practices. In the FTC case, key competitor Microsoft had led a fight with other technology companies to argue for strong FTC actions against Google to punish it for what they believed were unfair business practices.


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