EU tells Google: change or face sanctions

By John Leonard
11 Jan 2013 View Comments
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Amid further signs that the EU's two-year investigation into Google is coming to a head, EC competition commissioner Joaquin Almunia said that the internet giant will be forced to change the way it presents its search results if it wants to avoid antitrust charges.

"We are still investigating, but my conviction is they are diverting traffic," Almunia told the Financial Times yesterday.

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"They are monetising this kind of business, the strong position they have in the general search market, and this is not only a dominant position, I think - I fear - there is an abuse of this dominant position."

The Competition Commission has been looking into whether Google's search results unfairly favour its own assets, such as YouTube, boosting their ranking while at the same time diminishing that of rivals, including Microsoft - one of the plaintiffs in the case. It is also investigating whether the firm's advertising service breaks the rules by blocking rivals, and allegations that Google has been illegally copying travel and restaurant reviews.

In September Computing reported Almunia as saying that Google needed to do more to answer these claims that it is abusing its dominant position in the search market and that a so-called Article 9 settlement could require it to alter its business practices. Then on 18 December, in a meeting with Google chairman Eric Schmidt, the commission gave the search firm one month to provide detailed proposals to resolve the dispute. Yesterday's public warning may be seen as Almunia's way of keeping up the pressure.

Google's rivals will be hoping that the EU can force some significant concessions from Google. On 3 January the US Federal Trade Commission (FTC) reported that it had "closed this investigation [into Google's alleged biasing of its search results], finding that the evidence does not support a claim that Google's prominent display of its own content on its general search page was undertaken without legitimate justification," a decision that Microsoft described as "weak and frankly unusual."

Given the comments from Almunia, it is doubtful that the EC will give Google such an easy ride. The competition commissioner told the Financial Times that the EU's tougher stance is a result of Google's greater dominance in Europe, where it commands 90 per cent of the search market, and  the EU's tougher antitrust laws.

If negotiations fail and Google is shown in court to have broken EU antitrust laws through the abuse of its dominant position, the company could be fined 10 per cent of its worldwide revenues - which for 2011 amounts to €2.9bn (£2.3bn).

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