Google deal is no "gentlemen's agreement", says EU antitrust chief

PARIS Fri Feb 21, 2014 6:42pm IST

A Google logo is reflected on the screen of a Samsung Galaxy S4 smartphone in this photo illustration taken in Prague January 31, 2014. REUTERS/David W Cerny

A Google logo is reflected on the screen of a Samsung Galaxy S4 smartphone in this photo illustration taken in Prague January 31, 2014.

Credit: Reuters/David W Cerny

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PARIS (Reuters) - The EU antitrust chief defended a deal with Google (GOOG.O) over how it displays web search results, following criticism from rival firms and his own colleagues, saying there had been no gentlemen's agreement to close the case.

The world's most popular search engine has been under investigation for three years by the European Commission, which acts as the bloc's antitrust regulator, over complaints it was blocking competitors in search results.

More than a dozen companies, including Microsoft (MSFT.O), price comparison site Foundem and online mapping company Hotmaps, have accused it of squeezing them out of the market.

Earlier this month, Google agreed to make concessions to display rivals' links more prominently, hoping to end a case that could have led to a fine of up to $5 billion (3.6 billion euros).

European Competition Commissioner Joaquin Almunia said last week he would accept Google's proposals, calling them significant concessions which had allayed competition concerns.

However rival firms said the plans did not go far enough and would only entrench Google's dominance of Internet searches. And sources told Reuters a third of the members of the European Commission also opposed the deal, underlining the political sensitivity of the matter.

Almunia brushed aside the criticism.

"I have also heard people say that the Commission has entered a gentlemen's agreement with Google which would lead to a way of dropping the charges or closing the file. Not at all," he told a Concurrences Journal conference on Thursday.

He said an independent trustee would monitor Google to ensure that there would not be any anti-competitive practices.

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Almunia still needs the majority of his fellow commissioners to push through the deal, but said he welcomed the criticism. "It is logical. There are 28 commissioners, each having his own views. It is good that each one can share his views," he said.

It was the third attempt by the world's most popular Internet search engine to settle the investigation. Its first two attempts to resolve the case failed.

Under its latest proposals, Google, which has a 75 percent share of the European search market according to consultancy comScore, will let three rivals display their logos and web links in a prominent box, and content providers will be able to decide what material Google can use for its own services.

Google will also scrap restrictions that prevent advertisers from moving their campaigns to rival platforms such as Yahoo!'s (YHOO.O) search tool and Microsoft's Bing.

The company must stick to the deal for the next five years.

Almunia, however, said Google continues to be under regulatory scrutiny over its Android operating system for smartphones. "We are in the process of investigating Android in the next few weeks," he said.

Google gives away Android for free. The software, which is available on three out of four smartphones sold worldwide, essentially helps the company extend its core search business and boost its usage in the mobile world.

(Editing by Pravin Char)

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