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EU vs Google: The Case That Won't Go Away

EU vs Google: The Case That Won't Go Away
By Seth Fitzgerald

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Another similar antitrust case in Germany was quickly shot down after a petitioner filed a lawsuit against Google for "search bias" with its Weather-related search results. Although the case was never as serious as the current EU investigation, Google readily prevailed.
 

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Contrary to Google's hopes, it does not appear as though the Internet search giant is going to escape the EU's antitrust investigation easily. Starting in 2010, the European Commission opened a full inquiry to see if Google has been abusing the power of its enormous market share in Europe.

EU has concerns that Google is stifling its competition and making it virtually impossible for others to operate in the same market. To try to put an end to the case, Google submitted its compromise proposal in April stating that it will "clearly address" the EU's concern.

Their original offer was to make sure that their search offerings were clearly distinguished from competitors for a period of five years. Earlier today, EU Competition Commissioner Joaquin Almunia announced "The proposals that Google sent to us months ago are not enough to overcome our concerns, and in this sense I wrote a letter to the president of Google, to Mr. Schmidt, asking Google to present better proposals, or improved proposals."

Big Risks

If Google does not provide concessions the Commission would be willing to accept, the company will face a fine equal to 10% of their global annual revenue. Considering that Google is one of the largest companies in the World, this fine would be in the vicinity of $5 billion based on the company's latest revenue reports.

Even if the Commission does accept the new terms, Google would still face a steep fine if it breaks the concession terms at any point during the next five years. Almunia originally wanted the case to be over by the end of this year but so far he has not stated when Google must submit their next proposal.

Google's Knack for Winning

One of the main concerns of Google's competitors is that Google has already won a similar case with the Federal Trade Commission. In that case, the FTC investigated Google for 19 months to see if they had favored their products in search results over other products. Eventually the FTC concluded that Google had not broken any regulations.

Another similar case in Germany was quickly shot down after a petitioner filed a lawsuit against Google for "search bias" with its Weather-related search results. Although the case was never as serious as the current EU investigation, Google readily prevailed.

The issue Google now faces is adjusting their American practices to comply with the EU's laws. Industry analyst Jeff Kagan points out that Google has a few options. The company can either change its practices, fight the case, or leave the EU market. "They can do what the EU wants, which is more than what Google wants, but they can do business there. Or they can fight and hope for the best. The best [outcome] would be that they could convince the EU that the requests are excessive. The worst outcome would be a huge fine."
 

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