Google Moves Toward Settlement of European Antitrust Investigation

BRUSSELS — The European Commission said on Tuesday that it had reached an “understanding” with Google that could lead to a settlement of an antitrust investigation into allegations that Google abused its dominance of the Internet search and advertising markets.

Europe’s competition commissioner, Joaquín Almunia, had asked Google in May to make concessions in four areas or face formal antitrust charges, which could mean years of costly litigation and hefty penalties if it lost.

“The commission considers Google’s proposals as a good basis for further talks and has now reached a good level of understanding,” said a commission spokesman, Antoine Colombani. He added that meetings on a more technical level would now be held to reach a settlement.

It was unclear what concessions Google had offered. A spokesman in Brussels, Al Verney, said only, “We continue to work cooperatively with the European Commission.”

The commission found after a nearly two-year inquiry that Google might have given its own products an edge over those of others while maintaining that it offered neutral results.

Google’s search engine has a 90 percent market share in many big European markets, compared with less than 70 percent in the United States, where it is also under investigation.

In May, Mr. Almunia took the rare step of going public with his demand that Google change its business practices, an indication that he was looking to settle rather than go through the time-consuming process of filing charges and making a case — after which the remedies won are often irrelevant in the rapidly changing technology industry.

“These fast-moving markets would particularly benefit from a quick resolution of the competition issues identified,” Mr. Almunia said then, calling this preferable to “lengthy proceedings.”

Nicolas Petit, a law professor at the University of Liège in Belgium, said that he did not believe the commission had a strong case against Google, and that this might have contributed to Mr. Almunia’s unusual offer. “It could have been a bluff, like a poker game,” he said.

On the other hand, Mr. Petit said, Google has a reputation for pushing the boundaries of the law and then backing off when it faces legal challenges, as it did when it began scanning books without seeking permission and then agreed to pay $125 million to settle charges of copyright infringement — a deal later rejected by an American judge.

“Its image is extremely important in its success,” Mr. Petit said, “and that’s why they like settlements — because they can be presented as win-win situations for consumers and the company alike.”

The commission’s investigation began after smaller Web businesses complained that Google had downgraded their sites in its search results or discriminated against them in other ways. Microsoft — itself the target of a decade-long antitrust battle with the commission that resulted in fines and penalties of 1.7 billion euros, or $2.06 billion at the current exchange rate — filed a complaint in March 2011.

The four practices Mr. Almunia listed in May included the way Google displayed links to its services differently from links to competitors’ services, and its use of restaurant and travel reviews from competitors’ Web sites.

Article source: http://www.nytimes.com/2012/07/25/technology/eu-nears-settlement-of-google-antitrust-investigation.html