European Commission reopens Google antitrust investigation after political storm over proposed settlement
Competition commissioner says ‘very negative’ responses from complainants and new data raised over summer requires examination
In a surprise move, the European Commission is reopening its four-year antitrust investigation into Google’s search and advertising business - and could open a separate one into its Android mobile operating system.
Joaquin Almunia, the EC’s antitrust chief, told Bloomberg TV on Sunday that following “very, very negative” responses from complainants to the proposed settlement unveiled in the spring that he is “trying to extract from Google solutions to these solid arguments.”
The unprecedented move comes after a political storm over the proposed settlement which Almunia, who will step down in the autumn, had hoped to sign in order to end the long-running investigation.
Speaking to Bloomberg TV on Sunday, Almunia said: “In this investigation, we received a lot of complaints. We have been trying to obtain from Google proposals to overcome the difficulties and the concerns. Now with the last version of proposals we came back to the complainants. The complainants sent us replies during the summer. Some of these replies are very very negative.
“And in some of those replies, some complainants have introduced new arguments, new data, new considerations so we now need to analyse this and to see if we can find solutions – if Google can find solutions to some of these concerns which we consider justified, and we are in this process. So it’s a long investigation, it’s a complex issue.”
Ministers from Germany and France, as well as other commissioners in the EC, had criticised the proposed settlement - which also became the source of fierce opposition from complainants to the original investigation, who said Almunia had not put it through “market testing” to examine its effects on their businesses.
The long-running investigation formally began in November 2010, when Almunia opened an investigation into whether Google’s dominance in Europe’s search advertising market, where it accounts for roughly 95% of the search market, required regulatory action.
In May 2012 Almunia said there were four key areas of concern about Google’s business: its links to its own “vertical search” services such as Google Shopping, YouTube and Maps over rivals, the copying of content from competing vertical search companies, restrictions on rivals advertising on sites using Google ads, and the portability of advertising campaigns from Google’s system.
While the third and fourth areas seemed settled, the first has remained a source of contention to complainants, while German publishers in particular have objected strongly to the use of their content in services such as Google News.
Over the summer a coalition of publishers and others lobbied the EC, and particularly Almunia, to reopen the negotiations.
A Google spokesperson said: “We continue to work with the EC to resolve the concerns they have raised.”
Almunia said that the competition division is also looking “in parallel, in a less advanced manner, on other cases regarding Google such as the Android ecosystem.” There, rivals such as Microsoft have said that the insistence that handset manufacturers using Android with Google’s services have to use Google’s search and maps and give them prominent positions on the home screen stifles competition.
The key objection to the proposed settlement, which would have allowed rival services to buy spaces at the top of search results pages, was that it would not prevent Google from favouring its own services, and would divert money from the rivals to Google even if they received clickthroughs from the adverts - rather than the zero-cost solution if they were ranked highly in “organic” search results, and Google was prevented from putting its own commercial services above those.
Almunia declined to give a timescale. “We are in an ongoing process so I cannot anticipate the end, I cannot anticipate the conclusions. We work in a rigorous way, as always, trying to understand the arguments of the complainants and trying to extract from Google solutions to these solid arguments. We are in this process.”
But Google chairman Eric Schmidt insisted in a letter to the Financial Times on Saturday that contrary to any claims by European news publishers, “Google is not ‘the gateway to the internet’” and added “Nor is it true that we promote our own products at the expense of competitors… if you want to buy something, whether it is shoes or insurance, we try to show offers and websites where you can actually buy things.
“That’s more relevant than a link to a specialised search engine, where you have to repeat your query. And if you need directions to a pharmacy, you get a Google Map with the closest stores. We think that is a great result for users.”