July 17, 2013 6:30 pm

EU presses Google for more concessions

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Google must make more concessions to rivals in the way it presents search results if it is to avoid formal charges and hefty fines, the EU’s antitrust enforcer has warned.

The latest ultimatum from Joaquín Almunia, the EU’s competition commissioner, pushes Google to revise a proposed settlement widely attacked by groups complaining about the US search engine’s dominance.

Yet those involved in the talks expect any revisions to fit within the broad outlines of the draft deal, which requires Google to list more of its competitors’ services, rather than comprehensively rewrite the terms to achieve a more radical outcome.

“I concluded that the proposals that Google sent to us months ago are not enough to overcome our concerns,” Mr Almunia said, adding that he wrote to Eric Schmidt, the US group’s chairman, demanding “better proposals, or improved proposals”.

Google defended the draft pact, which was drawn up over several months of talks with Brussels. “Our proposal to the European Commission clearly addresses the four areas of concern,” it said, in reference to the potential antitrust issues flagged up by Brussels.

The latest round of talks is expected to take several months. Google’s rivals hope that blunt criticisms of the deal – which the FairSearch lobby group described as “worse than nothing” – have given Mr Almunia new appetite to confront Google.

Hardline opponents of the proposed settlement are pushing for Google to treat its own products with the same algorithm as it applies to its rivals or to spin off its search business entirely. Neither would be acceptable to the US search group.

According to people close to the talks, glitches in the legal text – such as the exclusion of searches executed through web browsers or voice – will be relatively easily addressed.

More difficult will be discussions of how to revise the measures that are supposed to mitigate the risk of Google unfairly diverting users to its own specialised, or “vertical”, services – such as shopping and travel listings.

For this reason, talks may hinge on how to make links to rivals more visible and informative.

Mr Almunia makes clear that if the settlement talks fail, the commission will be ready to serve the US group with formal antitrust charges, starting a long and difficult process that could end in fines and private damages claims. However, so far there are no public signs that the commission is updating its draft charge sheet, a process that can take several months.

David Wood, legal counsel for the Microsoft-backed Initiative for a Competitive Online Marketplace, welcomed the commission’s recognition that the proposals were “inadequate”.

FairSearch, the other main anti-Google lobby group, on Wednesday released research claiming the remedies would fail to reverse the flow of traffic to Google’s own products.

An internet survey by David Hyman of the University of Illinois and David Franklyn of the University of San Francisco concluded that the proposed deal “would have no significant impact and may in fact further confuse consumers”.

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