EU, Google Reach a Deal on Antitrust, Avoiding Huge Fine
Google has reached a deal with European Union antitrust regulators that specifies how it must display competitors' links in its search results, avoiding further investigations and hearings that could have resulted in as much as a $5 billion fine.
Following a three-year investigation, EU regulators had concluded that Google's business strategies violated the EU's antitrust laws. Since the EU first announced its findings, Google had submitted multiple proposed resolutions, all of which had been rejected.
Google is the dominant search engine in the EU's member countries, and has been for years. The EU, along with Google's competitors, has complained Google used that dominance to promote its own services and products over those from alternative sources. Among the changes in the EU five-year deal is the required inclusion of product ads from companies that are not advertising through Google's AdWords online ad service.
The EU investigation into Google's practices began in 2010 at the behest of more than a dozen Google competitors, who complained that Google promoted its own services at their expense. Throughout the negotiations for a resolution, EU regulators consulted with the complainants over Google's proposals. Not this time. That left some companies unhappy.
Hans Biermann, CEO of German online mapping service Euro-Cities, told Reuters the agreement was not enough to remedy the problem, and threatened court action.
"Today's announcement still leaves many questions open," Biermann said. "We will continue to take legal action about Google's business practices in the German and, if necessary, EU courts."
Many of the original complaints directed at Google in the EU, and from competitors around the world, have dealt with its control of the search engine industry. Internet research firm comScore puts Google's share of the European search market at 75 percent. Although this control was mentioned in the talks with the EU, the resolution is unlikely to create a situation where an alternative search engine can grow significantly faster than currently. That means moving forward, Google will remain ahead of Microsoft's Bing and other search engines that are generally not as popular in the EU.
We asked Jeff Kagan, an independent technology analyst, for his opinion on the agreement and how it will affect Google's ability to grow and control the market in the EU. He said Google made the choices it had to make to avoid fines, but it probably will not hurt Google's market share.
"It may have an impact on how rapidly Google continues to grow and how much of a leadership position they will take." Kagan told us. "However, I think Google will continue to grow and continue to have a leadership position."