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    Google Closes In on Antitrust Agreement With EU: Report

    By
    Todd R. Weiss
    -
    July 24, 2012
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      Google “has agreed [to] the outlines of a settlement” with the European Union to finally end an ongoing EU investigation into alleged anticompetitive behaviors by the search giant in the European marketplace, according to a report by The Financial Times (FT).

      Under the settlement, Google would not be hit with formal antitrust charges by the EU, the report stated.

      “In a big test for how Google handles the mounting regulatory scrutiny it is facing worldwide, the company offered to make significant changes to its business” to end the investigation and avoid large fines that could have amounted to almost $4 billion, the FT story reported.

      The exact terms of a deal have not yet been announced publicly and the arrangement has not yet been finalized, but the main sticking points that have been raised in recent months€”how to include mobile search services and Android€”are being addressed, the report said.

      Negotiations for a settlement deal have been in the works for more than a month. Last week it was reported that Google’s Android technologies would have to be included as part of any agreement for any deal to pass muster with the EU.

      “The breakthrough [in the settlement negotiations] came after Google said it would in principle extend the remedies it had offered to make for PC-based search to cover mobile search services, too,” the FT reported.

      In an email reply seeking comment on the potential settlement, a Google spokesperson said: “We continue to work cooperatively with the European Commission.”

      Charles King, an IT analyst with Pund-IT, said a settlement with the EU, rather than a long-term legal battle, is a smart move for Google.

      “From a business-focus perspective, it’s much better for companies to reach a compromise than it is to drag this kind of thing out for years and years,” King said. “It’s a good example of what we saw happen with Microsoft back in the 1990s,” when the company endured having an antitrust watchdog on its campus for years. “That could have been something that Google considered” in deciding to reach a deal before things went that far.

      In addition, said King, businesses that are pursued in such cases often also become legal targets by other companies that want a piece of the action.

      “Over the past couple of years we’ve seen that certain companies in the technology industry have come to rely more on litigation than technological innovation,” he said. “And being the subject of an antitrust investigation from an organization like the EU almost automatically makes a vendor a target for other kinds of litigation.”

      Earlier in July, Google again updated a list of proposed actions the company would take in response to the EU’s antitrust concerns. That list came two weeks after Google submitted an earlier list to the agency that failed to garner the EU’s full satisfaction.

      Since then, Google has been continuing to try to come up with a concessions package that would be acceptable to both the company and the European Commission, the antitrust agency of the EU. Such a deal would allow Google to potentially avert charges of anti-competitive behavior. Neither side have commented publicly on the process.

      Google executives originally sent the list of initial concessions to address potential antitrust concerns from the EC several weeks ago. At the same time, Google Chairman Eric Schmidt sent a letter to the EU’s Joaquin Almunia, outlining 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 others.

      The EU investigation centers on what they regard as Google’s dominant position in search.

      Almunia in May had given Google officials until early July to address that and other concerns, including the use of material from other search engines in its results and its dominance in Web advertising, all of which investigators have said put competitors at an unfair advantage.

      Since that time, Almunia again spoke to Google’s Schmidt and asked for more clarification of Google’s proposals from early July.

      Google officials are under investigation in Europe, the United States and elsewhere 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 configures its search algorithms to favor its own products and results over those of others, giving it an unfair advantage in search and Web advertising.

      Todd R. Weiss
      As a technology journalist covering enterprise IT for more than 15 years, I joined eWEEK.com in September 2014 as the site's senior writer covering all things mobile. I write about smartphones, tablets, laptops, assorted mobile gadgets and services,mobile carriers and much more. I formerly was a staff writer for Computerworld.com from 2000 to 2008 and previously wrote for daily newspapers in eastern Pennsylvania. I'm an avid traveler, motorcyclist, technology lover, cook, reader, tinkerer and mechanic. I drove a yellow taxicab in college and collect toy taxis and taxi business cards from around the world.

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