There are going to be some big changes afoot in Google’s search results. The European Commission announced today that it had reached a settlement with the tech giant to end its multi-year antitrust investigation. The settlement will require Google to give more prominent placement to search results and services from its competitors in Europe.
The news comes a week after reports that the search giant was nearing an agreement with regulators in the EU. The requirements don’t apply to Google’s search results in other parts of the world.
In particular, the EC said that Google would provide equal space to alternatives from its competitors, like prominently displaying links to Yelp and other location services above search results for places, and displaying product listings from other companies in addition to its own advertising.
In addition, companies will also be able to opt-out of using Google services without being penalized, and Google won’t require exclusivity deals that prevent companies from advertising with other search engines.
Still, it’s not clear what Google’s final proposal says, since the European commission hasn’t yet released Google’s detailed proposal to the public. For the company’s critics, the devil is in the details. In past proposals, Google has suggested that rival search services would have to pay Google for placement as a rival service on pages that serve particular types of advertising, including Google’s popular product listing ads. In the event those ads don’t appear, rival services would get placement for free.
In addition, Google’s past proposals have also included language that would exclude merchants like Amazon from being listed among the alternatives provided by its rivals.
David Wood, a lobbyist with ICOMP, which represents Microsoft and other complainants, said that the Commission is running the risk of having the wool pulled over its eyes by Google, according to a report by Reuters. A representative for Euro-Cities, a German mapping service, told Reuters that the company would look to the courts for further action if the settlement didn’t go far enough.
Joaquin Almunia, the Commission Vice President in charge of Competition Policy, said in a statement that he thinks the agreement is enough.
“My mission is to protect competition to the benefit of consumers, not competitors,” he said. “I believe that the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns.”
The wrangling over the case isn’t done yet. The Commission will discuss the changes with the complainants in the case, including Microsoft, before making the agreement legally binding.
Update: FairSearch Europe, which represents a coalition of complainants in the antitrust action including Microsoft, Expedia, Nokia and TripAdvisor, provided the following statement from Legal Counsel Thomas Vinje to GeekWire in an email:
The European Commission has tentatively accepted a proposal by Google which is worse than doing nothing. These proposed commitments have not been subjected to any form of consultation, although it was thanks to market testing of industry participants that the Commission had condemned two previous packages of proposed commitments as fatally flawed.
FairSearch Europe needs to examine this proposal in detail, but our concern is that the proposed commitments lock in discrimination and raise rivals’ costs instead of solving the problem of Google’s anti-competitive practices.
Google now holds a 95 percent market share of search across the European Union and gives preferential treatment to its own services, which damages competition and gives consumers less choice.
The Google proposal requires rivals to pay Google for placement similar to that of Google’s own material, undercutting the ability of other to compete and provide consumer choice. This will be done through an auction mechanism that requires participating companies to hand the vast majority of their profits to Google.
FairSearch’s position is that given the broad impact of such a settlement on consumers, competitors, innovation and Europe’s digital economy, it is vital that the latest package of Google’s proposed commitments be subject to a broad a consultation of stakeholders. Sadly, this does not seem to be the case.
It was thanks to such market testing that the two previous series of Google proposed commitments were demonstrated to be fatally flawed as mechanisms to restore competition to search.
Representing the diverse components of the search market, FairSearch is committed to working with the Commission in any way possible to identify effective solutions that restore competition to the search markets. In the two previous consultations, FairSearch and its members provided concrete evidence that Google’s proposed commitments did not deliver the improvements in competition that they were theoretically designed to achieve. That evidence was gained through actual testing of the proposals, and this third package should be subject to the same broad and concrete vetting by those who understand the industry by participating in it.
[This post has been updated to clarify Google’s past proposals.]