Clock ticking for Google after EU rejects latest antitrust offer

BRUSSELS Fri Dec 20, 2013 10:18pm IST

European Union Competition Commissioner Joaquin Almunia speaks during a news conference at the EU Commission headquarters in Brussels December 18, 2013. REUTERS/Francois Lenoir

European Union Competition Commissioner Joaquin Almunia speaks during a news conference at the EU Commission headquarters in Brussels December 18, 2013.

Credit: Reuters/Francois Lenoir

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BRUSSELS (Reuters) - Google (GOOG.O) has been told it is running out of time to improve its offer to settle a European Union investigation into anti-competitive behaviour or face formal charges that could lead to a hefty fine.

EU antitrust chief Joaquin Almunia rejected the internet search giant's latest concessions on Friday and warned that it has only a short time left to make a satisfactory offer.

Google has been investigated by the European Commission antitrust regulator for three years over complaints that it blocked competitors in search results.

The company's original proposal in April to resolve the matter was rejected by its competitors, including Microsoft (MSFT.O) and British price-comparison website Foundem, who said that the changes would only reinforce its dominance.

Google proposed new concessions in an attempt to avert a possible fine of up to $5 billion, and the Commission asked 125 of Google's rivals and third parties to provide feedback on these in October.

Almunia said the revised proposals did not go far enough.

"The latest proposals are not acceptable in the sense that they are not proposals that can eliminate our concerns regarding competition," Almunia said in a radio interview with Spain's RNE.

Almunia said that, in particular, Google's latest offer did not remove concerns about the treatment of Google's rivals in so-called vertical searches, which are specialised searches for a particular product or a restaurant.

Asked if there would be sanctions against Google, Almunia said: "No, no, no ... At this moment, there is little time left, but the ball is still in Google's court. But within a short time frame the ball will then be here (with the European Commission) and then it will be the moment to take decisions."

The European Commission hopes to close the case next spring.

RIVALS' CONCERNS

Google's spokesman in Brussels, Al Verney, defended the company's revised offer, saying: "We've made significant changes to address the European Commission's concerns, greatly increasing the visibility of rival services and addressing other specific issues."

ICOMP, a lobby group that counts Microsoft and four other complainants among its members, accused Google of being unwilling to change its "harmful practices".

"It is now vital that the Commission use this opportunity to enforce the competition rules and ensure that a level playing field is restored, not only for those companies that have been harmed but also to support consumer choice and the wider European economy," ICOMP legal counsel David Wood said in a statement.

In its latest offer, Google proposed to allow rivals to display their logos and make their web links more prominent to users. In areas where all search results can be paid advertisements, such as shopping searches, Google offered to cut the minimum bids it will accept from advertisers seeking to buy slots on result pages, to 3 cents from 10 cents.

It also proposed to relax conditions preventing advertisers from moving their campaigns to other platforms, such as Yahoo! (YHOO.O) and Microsoft's Bing.

Google also proposed that its rivals, which had complained that Google copied content from their websites without permission, would decide which content the company could use.

(Reporting by Adrian Croft, Foo Yun Chee, Sam Cage; Editing by Charlie Dunmore and David Goodman)

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