Exclusive - Google close to settling EU antitrust probe: sources

BRUSSELS Wed Jan 29, 2014 10:30pm IST

A security personnel stands guard during the media tour in the Google data centre in Changhua Coastal Industrial Park, central Taiwan, December 11, 2013. REUTERS/Pichi Chuang/Files

A security personnel stands guard during the media tour in the Google data centre in Changhua Coastal Industrial Park, central Taiwan, December 11, 2013.

Credit: Reuters/Pichi Chuang/Files

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BRUSSELS (Reuters) - Google (GOOG.O) is close to settling a three-year European antitrust probe with "much better" concessions to allay concerns over blocking rivals such as Microsoft (MSFT.O) from internet search results, two sources said on Wednesday.

A settlement with the European Union's regulator would mean that Google, the world's biggest internet search engine, would escape a possible fine of as much as $5 billion or 10 percent of its 2012 revenue.

Such an outcome would mirror the company's success in the United States last year where it received only a mild reprimand from the Federal Trade Commission, which said Google had not manipulated its website results following a 19-month investigation.

Google and the European Commission are close to a deal and a decision is expected in the next few days or in a couple of weeks at the latest, a senior European Union official told Reuters.

A second person familiar with the matter confirmed the likely settlement.

A Commission spokesman declined to comment on whether or not a deal was close. "We are at a critical moment in the investigation," he said.

"We don't comment on rumours and speculation," a Google spokesman said in a statement.

The EU official said Google's latest proposal, its third since EU Competition Commissioner Joaquin Almunia rejected an earlier offer in October as unacceptable, was "much better".

It includes commitments from Google on how it will treat rivals and how it will use content from other providers in future.

The Commission has said that Google may have favoured its own products and services in search results at the expense of competitors.

Google submitted the new offer in mid-January, in essence building on its second proposal with no dramatic changes, the second source said.

In that offer, the U.S. company said it would let rivals display their logos and web links in a prominent box, and content providers decide what material Google can use for its own services.

It would also make it easier for advertisers to move their campaigns to rival platforms such as Yahoo! and Microsoft's (MSFT.O) Bing.

EU regulators will not seek feedback from the 125 rivals, including Microsoft and third parties, who commented on Google's previous proposals as they have a clear idea of their thinking after the last two market tests, the official said.

RIVALS READY TO CHALLENGE COMMISSION

Google's critics said they wanted the chance to vet the offer and were ready to take on the regulator if left out of the process.

"We would challenge a settlement agreed upon without a market test," said Michael Weber of German online mapping service Hotmaps.

"The concerns raised by the Commission's investigation are too important to consumers for them to be addressed by a settlement that is not thoroughly vetted," said lobby group FairSearch, whose members include U.S. online travel sites Expedia (EXPE.O) and TripAdvisor, and French comparison site Twenga.

ICOMP, another lobby group that counts Microsoft and four other complainants among its members, agreed.

The critics have said Google's earlier concessions would only entrench its dominance, and that it would be better for regulators not to do a deal than end up with a flawed outcome.

(Editing by Erica Billingham)

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