Joachin Alumnia, the antitrust commissioner in the European Commission, has today finally given his final verdict on an antitrust investigation against Google, which has been going on since 2004: it has given the company the all-clear and will now move forward on implementing remedies. But no sooner did the decision get made public than Google’s competitors have weighed in with a response.
“This thing is a disgrace,” one told TechCrunch. He points out that the settlement won’t be made public before the deal is sealed. “So much for transparency.
“If Commissioner Almunia thought he got a good deal, he would get it vetted by experts and not only take Eric Schmidt’s word for it. But this deal will only be published after the deal is done. So the European Competition Commissioner should take some words of wisdom to heart that Eric Schmidt himself gave once to the world: ‘If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.’” There are some 12 companies involved in the case against Google and include large companies like Microsoft, Expedia and others.
Almunia has a different opinion. “I believe Google’s proposals are capable of addressing the concerns. so we are moving forward on commitments,” he told an audience in Brussels today.
At issue were four types of business practices that raised concerns. The first two related to specialised search services around particular verticals like travel or hotels. In essence Google was displaying its own results in a more prominent manner than competitors. The other two complaints relate to online advertising and pressures that Google may have been placing on them to use Google ads.
Almunia said that while he could have taken either the negotiation or adversarial routes, he chose the former. “The purpose of enforcement should be allowed to let consumers benefit as soon as possible,” he said, and this would not have been possible with the protracted timeframe of an adversarial approach.
The solution is based on the third proposal from Google, after the previous two were rejected for not being strong enough. “This is why the latest round of negotiations was very intense. We have focused on how other search services can compete with Google,” Almunia said today.
Almunia stressed that this is not the end of the Google story. There is first the case of implementing this decision, but then there are also now ongoing investigations into other areas. The biggest one is a look at antitrust practices around the Android operating system, which is the largest smartphone platform in the world and controlled by Google.
Included in the solutions, now, when users in Europe search for, say, a hotel in a basic Google search, there will be three services displayed as alternatives alongside Google’s own. There are also provisions for how Google will handle mobile ads: one rival link will be displayed alongside Google’s own results. “This is a significant improvement over the previous proposal where rivals were only accessible after going through another screen,” Almunia said.
Competitors are still unhappy about the solutions, however. For starters, they claim that they will still be at a disadvantage because their results will always appear on the right of Google’s and studies have always shown that people opt first for results on the left side.
There is also the issue of “pay to play.” Those who want to advertise on Google’s page should pay, but in the commitments there are two different areas. If Google is offerings its own services and needs to display competitors alongside, they will not need to pay. But in cases where Google is displaying advertising results competitors will also need to pay to appear alongside those of other results.
Pointedly, there will be no more market tests from now on as there have been in previous iterations when Google and the EC were still negotiating. “This is a bad deal for consumers and for companies,” said a competitor. “If he thought he had a good deal, he would put it to a market test. Now the only hope is that other European Commissioners, who need to approve the deal, will stop Almunia.”
More to come.
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