EU warms to Google antitrust concessions

BRUSSELS Wed Jul 25, 2012 4:57am IST

Attendees sits in front of a Google logo during Google I/O Conference at Moscone Center in San Francisco, California June 28, 2012. REUTERS/Stephen Lam

Attendees sits in front of a Google logo during Google I/O Conference at Moscone Center in San Francisco, California June 28, 2012.

Credit: Reuters/Stephen Lam

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BRUSSELS (Reuters) - Google took a significant step toward resolving its antitrust problems in the EU after regulators warmed to new concessions offered to settle an investigation into alleged anti-competitive behaviour and avert a possible fine.

The European Commission said on Tuesday that there was a "level of good understanding" with the world's most popular search engine regarding its latest proposals that would form the basis of discussions before the Commission makes a final decision whether to accept them.

The comments from the Commission came after Google - to comply with the EU watchdog's demand - revised initial proposals to cover computers, tablets and mobile devices, a source said.

The Commission did not say what Google had proposed but did say that the concessions formed the basis of further technical discussions.

If the company does eventually convince the EU regulator of the merits of its offer, it would avoid the kind of lengthy battle that plagued its rival Microsoft in the last decade and ended in more than a billion euros in fines.

"I can confirm we have reached a good level of understanding with Google based on its proposals," EU competition policy spokesman Antoine Colombani said on Tuesday.

"There will soon be discussions at technical level. We hope this process will lead to remedies addressing our concerns," he said.

A Google spokeswoman said: "We continue to work cooperatively with the European Commission."

FLESHING OUT THE BONES

The source said Google's latest proposals covered the four areas of concerns cited by EU Competition Commissioner Joaquin Almunia in May but were not very detailed.

"The technical meetings will put flesh on the bones," the source said.

The source said the revised concessions focused on the presentation of search results, how reviews appear in the search results and adjustment or removal of some contractual restrictions.

The EU watchdog has said Google may unfairly favour other Google services over rivals and may have copied material from other websites, such as travel and restaurant reviews, without permission.

It is also concerned that Google's advertising deals may exclude third parties from concluding similar deals with rivals while contractual restrictions on software developers may prevent advertisers from transferring their online campaigns to rival search engines.

The FairSearch coalition, whose members include online travel agencies and Google complainants Expedia and TripAdvisor, said monitoring was crucial to ensure that Google lives up to its word.

"Any binding set of changes to Google's practices must be paired with strong ongoing monitoring and enforcement mechanisms to ensure that the company does not return to its anti-competitive practices," the group said in a statement.

Companies can be fined up to 10 percent of their turnover for breaching EU rules. In Google's case, that could reach $4 billion based on its 2011 results.

Almunia is holding a news conference on a number of cases on Wednesday. The source told Reuters Almunia was likely to make an announcement about Google then.

Google has been under the EU regulatory spotlight in the last 18 months following complaints from more than a dozen rivals including Microsoft.

The U.S. Federal Trade Commission is also investigating Google on similar claims.

(Additional reporting by Philip Blenkinsop in Brussels, Diane Bartz in Washington; Editing by Jane Merriman and Steve Orlofsky)