Google in peace deal with Brussels

Google is bowing for the first time to legally binding constraints on how it presents search results, according to a draft agreement with the EU’s top competition authority.

Several people familiar with the deal told the Financial Times that the US internet giant will revamp its results page to include prominent links to rival search engines and clearer signposts for its own in-house services.

The settlement marks the final act of a sprawling and contentious three-year investigation – involving US and EU authorities – that was triggered by complaints from Google’s rivals, such as Microsoft.

Joaquín Almunia, the EU competition commissioner, extracted much bigger concessions than Washington, which gave Google’s search business a clean bill of health in December.

But complainants, who can comment on the settlement before its adoption, will still be dismayed by many of its provisions. Groups such as Expedia, TripAdvisor and Microsoft have lobbied the EU to serve formal charges rather than sign a voluntary settlement that allows Google to entrench its dominance.

Once formally agreed, Google will also avoid both a hefty antitrust fine and the kind of transatlantic regulatory assault that hobbled Microsoft for almost a decade.

Eric Goldman, professor at Santa Clara University School of Law in California, said a settlement on those terms would be “an emphatic rejection of most of the gripes lobbed against Google. That would be an impressive win” for the company.

“It’s probably unlikely that many Google users will care about those links,” he said. The EU might have spent “a lot of its time and money to change very little user behaviour”.

He added that the obligation to provide links to competitors was “a direct incursion into (and restriction of) Google’s editorial discretion, and for that reason, it would not be constitutional under US law.”

In its peace agreement with Brussels, which would be legally binding for a period of five years, Google promises to make users in Europe “clearly aware” when promoting its own specialist search services – such as those for restaurants, finance and shopping. The company will also systematically highlight links to rival specialised, or “vertical”, search engines.

It is the first time Google has yielded to antitrust pressure on its core search business, which handles almost 90 per cent of queries in Europe.

Under the terms of the draft deal, formally submitted this week, Google will label its own specialist search services and provide “visible” links to rival search engines.

As a result, there will be a noticeable difference in the Google results page that will be enforced across Europe. A trustee will monitor compliance.

The stringency of the agreement’s terms depend on whether Google makes money from a particular search service. Google’s in-house news results, for example, merely need to be labelled and separated. But restaurant results – which link to a page with adverts – require more noticeable separation and three prominent links to rival search engines.

In Google’s shopping service, where retailers pay to place products, links to rival shopping comparison websites will be auctioned.

Google’s prized search algorithm will not be affected by the settlement. While the EU probe found problems with the way Google promoted its own services, it did not conclude that the US group deliberately demoted those of its competitors – a key concern of many complainants.

To address EU concerns over Google’s “scraping” of user reviews and other content from rival sites, the company pledged to give content providers the right to opt out of its specialist search services – such as Google News – without disappearing from its general search engine.

In a measure that goes further than the voluntary terms agreed with the US Federal Trade Commission, Google has also promised to set up a tool for sites to remove up to 10 per cent of a site’s content from vertical search.

Other provisions will end exclusivity requirements for sites that embed Google search on their website and make it easier for small business advertisers to move their campaigns from Google to other search engines.

Prof Goldman said: “Its enemies are numerous, noisy and deep-pocketed, yet they have never been able to prove their most damaging claim that Google manipulated its search results.”

He added: “The Google haters are not going away. As long as Google maintains its strong market position, antitrust gripes are going to keep hounding it.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.