Google deal not a ‘gentlemen’s agreement’, says EU antitrust chief

By Foo Yun Chee

PARIS (Reuters) – The head of the European Union’s antitrust watchdog has defended a deal with Google over how it displays online search results after it drew criticism from rival companies and his own aides, saying there was no gentlemen’s agreement to end the case.

The world’s most popular internet search engine has been under investigation for the past three years by the European Commission, the EU’s antitrust regulator, following complaints that it is blocking rival search engines from search results.

More than a dozen companies, including Microsoft, price comparison site Foundem and online mapping company Hotmaps, have accused her of driving them out of business.

Earlier this month, Google agreed to concessions on displaying competitor links more prominently, hoping to end a case that could have resulted in fines of up to $5 billion (€3.6 billion).

EU Competition Commissioner Joaquin Almunia said last week he would accept Google’s proposals, calling them significant concessions that eased competition concerns.

But rival companies said the plans did not go far enough and would only cement Google’s dominance in internet searches. And sources told Reuters that a third of the European Commission also opposed the deal, underscoring the political sensitivity of the issue.

Almunia downplayed the criticism.

“I also heard that the Commission had reached a gentlemen’s agreement with Google that would have led to the charges being dropped or the case being closed. Not at all,” he told the Concurrences Journal conference on Thursday.

He added that an independent trustee will monitor Google’s activities to ensure there are no anti-competitive practices.

LOGOS

Almunia still needs a majority of his fellow commissioners to push through the deal, but said he welcomed the criticism. “It’s logical. There are 28 commissioners, each has their own views. It’s good that everyone can share their views,” he said.

It was the world’s most popular search engine’s third attempt to close the investigation. The first two attempts to solve the case ended in failure.

Under its latest proposals, Google, which has a 75 percent share of the European search engine market according to consulting firm comScore, will allow three rivals to display their logos and web links in a visible area, and content providers will be able to decide what material Google can use in its own services.

Google will also lift restrictions that prevent advertisers from moving campaigns to competing platforms such as Yahoo! Search and Microsoft’s Bing.

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

Almunia said, however, that Google is still facing regulatory scrutiny over its Android smartphone operating system. “We are in the process of examining Android in the next few weeks,” he said.

Google is giving away Android for free. The software, which is available on three of the four smartphones sold worldwide, essentially helps the company expand its core search business and increase its use in the mobile world.

(Editing: Pravin Char)