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Google’s ongoing two-year antitrust investigation by the European Union involving its business practices apparently will continue through at least late August before any decision is reached on how next to proceed.
That’s the opinion of EU Competition Commissioner Joaquin Almunia, who made the announcement at a recent conference, according to a report by Reuters. The EU’s executive arm, which is called the European Commission, received a collection of antitrust remedy proposals from Google in late January and is now sifting through and reviewing them.
“We can reach an agreement after the summer break,” Almunia said, according to Reuters. “We can envisage this as a possible deadline.” The commission’s summer break continues through most of August, according to the report.
Google’s suggested remedies for the antitrust issues in the EU have not yet been publicly released. Most importantly, it still must be determined whether Google’s suggestions will satisfy EU regulators.
Reuters reported that sources have said that “Google offered to label its own services in search results to differentiate them from rival services, and also to impose fewer restrictions on advertisers.”
Google has been trying to come up with proposed remedies for some time that would satisfy EU regulators and convince them to close their case against the search giant. Google had sent previous lists of proposals to the EU in the summer of 2012, but those earlier proposals failed to satisfy European regulators. Google was given more time—until Jan. 31—to submit new proposals.
The EU investigation centers on what regulators regard as Google’s dominant position in search.
In July 2012, 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 the EU’s 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.
Almunia had given Google officials that opportunity to address that issue 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 said put competitors at an unfair advantage.
Since that time, Almunia again spoke to 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 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.
A guilty verdict on such charges could mean a fine of up to 10 percent of Google’s annual revenue, which based on its 2011 annual results, would amount to about $4 billion.
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.
Instead of an antitrust prosecution in 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.
Google Antitrust Case in EU Will Linger Through August
In the FTC case, Google won a huge battle as the commission voted to close its longtime investigation into allegations that Google has been manipulating its search algorithms to favor Google’s results over competitors. Instead, the FTC found that there was not enough evidence to prove such allegations.
Both decisions were announced Jan. 3 in an FTC conference call that capped a 19-month investigation into Google’s search practices and patent portfolios in the smartphone, tablet and gaming device markets.
Among the key parts of the FTC agreement with Google is that the search company will end some past business practices that could stifle competition in the markets for popular devices such as smartphones, tablets and gaming consoles, as well as the market for online search advertising, according to the agency. Under a binding settlement with the FTC, Google will allow competitors access “on fair, reasonable, and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smartphones, laptop and tablet computers, and gaming consoles,” the FTC reported.
Google was first notified by the FTC of a “formal review” of its business practices in June 2011 after similar reviews began in Europe. At that time, the European Commission launched an investigation into the company’s search practices after vertical European search engines, such as Foundem, eJustice.fr and Microsoft’s Ciao, complained the company favored its own Web services in search results on Google.com over theirs. They argued that this put them at a significant competitive disadvantage in the market.
The initial FTC review in 2011 began after the agency heard complaints from Microsoft, Expedia, TripAdvisor, Yelp and other Websites that Google promotes its own Web services above those of competitors.
Google denied all such allegations at that time, noting that its search algorithms analyze Website quality and popularity based on links for placement as part of its PageRank system.
In July 2012, Google reached a record $22.5 million settlement with the FTC to resolve charges that Google bypassed Apple Safari browser privacy settings that blocked cookies for their users. The settlement was criticized in a statement by the Competitive Enterprise Institute, an industry group, as “a dangerously overbroad precedent that will chill Internet innovation and hurt online startups.”
