According to a press release from the European Commission, it has obtained an improved commitments proposal from Google in the context of the ongoing antitrust investigation on online search and search advertising. In its proposal, Google has now accepted that it will guarantee that whenever it promotes its own specialised search services on its web page (eg for products, hotels, restaurants, etc.), the services of three rivals, selected through an objective method, will also be displayed in a way that is clearly visible to users and comparable to the way in which Google displays its own services (see also MEMO/14/87). This principle will apply not only for existing specialised search services, but also to changes in the presentation of those services and for future services.
Commission Vice President in charge of competition policy, Joaquín Almunia, said: “My mission is to protect competition to the benefit of consumers, not competitors. I believe that the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns. Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative. This way, both Google and its rivals will be able and encouraged to innovate and improve their offerings. Turning this proposal into a legally binding obligation for Google would ensure that competitive conditions are both restored quickly and maintained over the next years.”
Google had already made significant concessions regarding the other concerns raised by the Commission:
· Google will give content providers an extensive opt-out from the use of their content in Google’s specialised search services if they so wish, without being penalised by Google.
· Google will remove exclusivity requirements in its agreements with publishers for the provision of search advertisements; and
· Google will remove restrictions on the ability for search advertising campaigns to be run on competing search advertising platforms.
An important aspect of the proposal is that Google’s compliance with these commitments would be supervised by an independent monitoring trustee. The commitments would cover the European Economic Area (EEA) for 5 years.
The Commission will in the coming period inform the complainants in this case of the reasons why it believes Google’s offer is capable of addressing the Commission’s concerns. The complainants will then have the opportunity to make their views known to the Commission before the Commission takes a final decision on whether to make Google’s commitments legally binding on Google.
Background
In March 2013, the Commission formally informed Google of its preliminary conclusion that the following four types of business practices by Google may violate EU antitrust rules prohibiting the abuse of a dominant position (Article 102 of the Treaty on the Functioning of the European Union – TFEU):
(i) The prominent display, within Google’s web search results, of Google’s own specialised web search services as compared to competing specialised web search services (ie services allowing users to search for specific categories of information such as restaurants, hotels or products). First, users are not aware of the promotion of Google’s services within the search results. Second, competitors’ results that are potentially as relevant are significantly less visible and even sometimes not directly visible to users – they are more difficult for the user to find, for instance because the user has to scroll down the screen to see them or has to go to a subsequent search results web page. The Commission is concerned that this practice unduly diverts traffic away from Google’s competitors in specialised search towards Google’s own specialised search services, by reducing the ability of consumers to find a potentially more relevant choice of specialised search services.
(ii) The use by Google without consent of original content from third party web sites in its own specialised web search services.
(iii) Agreements that oblige third party web sites (“publishers”) to obtain all or most of their online search advertisements from Google.
(iv) Contractual restrictions on the transferability of online search advertising campaigns to rival search advertising platforms and the management of such campaigns across Google’s Adwords and rival search advertising platforms.
The Commission considers that these practices can harm consumers by reducing choice and stifling innovation in the fields of specialised search services and online search advertising.
ICOMP Reaction
One of the bodies involved in lobbying on this issue, ICOMP, has issued a statement expressing strong concern:
‘A settlement without third party review is a massive failure. Complaints and others must see Google’s proposed commitments, not just the Commission’s analysis of why they will work. Hard data from market tests proved that the previous settlement would not work – we need time and opportunity to ensure full technical assessment of how effective the proposed remedies would be.
Without a third party review, Almunia risks having the wool pulled over his eyes by Google. Having initially welcomed earlier proposals, effective market tests demonstrated their fatal flaws and the commission rightly rejected them. Why has Almunia chosen to ignore the expert advice of the market on this occasion?
We do not believe Google has any intention of holding themselves to account on these proposals, and given the catastrophic effects on the online ecosystem that a proposal that doesn’t hit the mark will have, we would implore Commissioner Almunia to allow a full third party review of their submission as the very least the Commission can do in this landmark case.’
Laurence Eastham writes:
While Commissioner Almunia makes a very valid point about his mission being to protect consumers not competitors, that is 90% semantics. It is not as if there is no connection between the two concepts.
But what worries me most about this proposal is that the ‘objective standard’ by which alternative results are chosen for display must by its very nature involve the warping of true search results. Isn’t that supposed to be the problem not the solution? If the butter is off, spreading it more thinly on the bread is not really an answer. Under the proposed solution, start-ups and mould-breakers will be as hidden from view as before. Surely we can do better than a solution that includes extending the problem originally addressed.
