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EU's proposed Google antitrust settlement angers search rivals

Proposed remedies play into Google's hands, says complainant

By Jennifer Baker
April 15, 2013 07:22 AM ET

IDG News Service - Google's proposed settlement of a European Union antitrust case amounts to continuing its discrimination against other search companies -- but putting a warning label on the practice, said an industry group.

The search giant has proposed labelling its own in-house services to indicate to users that they are not the result of "natural search". It also proposes including links to rival search engines for specialist restaurant search results that generate revenue for Google. The Internet giant's paid-for services would be separated from general search and treated more like advertising, according to media reports confirmed by a person familiar with the case.

The proposed remedies are essentially "labeling plus" and could make matters worse, said David Wood, lawyer for ICOMP, which represents some of the complainants in the antitrust case.

Shivaun Raff, CEO of Foundem, one of the first to complain to the Commission about Google, said: "The proposals described in the media this weekend sound like they may play straight into Google's hands. At first glance, they read more like an extract from Google's development road-map than a genuine attempt to resolve the Commission's concerns regarding search manipulation."

Google has been under investigation by the Commission since November 2010 after rivals accused the search giant of setting its algorithm to direct users to its own services by reducing the visibility of competing websites and services.

However there are also allegations that Google may have copied travel and restaurant reviews from competing sites without their permission (so-called 'scraping' of content) and that its contractual restrictions may prevent advertisers from moving their online campaigns to rival search engines.

To resolve the latter issue Google has agreed to remove exclusivity provisions from all future contracts and any legacy advertising contracts. This search giant also offers tools to prevent web scraping by including a tool that would allow content owners to opt out.

"It is difficult to imagine a competition case where the stakes for European consumers and businesses could be any higher. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of Europeans discover, read, use and purchase online," said Raff.

In order for the Commission to judge the effectiveness of the proposed remedies, a market test will seek feedback from market players, including complainants. This feedback will be taken into account in the Commission's final analysis. However it is the Commission that must be satisfied with the outcome, not any other party involved. If a solution isn't found, the Commission could still fine the company up to 10 percent of its annual global revenue (US$37.9 billion last year).

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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