Antitrust deal leaves Google unscathed

Agreement opens door for search rivals, but it's doubtful it will matter

Google's agreement to end its three-year antitrust dispute with the European Union gives the company's search rivals a boost, but it's probably not enough to make a dent in Google's search engine dominance.

On Wednesday, the European Commission announced that Google agreed to give comparable display to rival search services, settling a EU antitrust case that began in November 2010. The case was launched after competitors accused Google of purposefully limiting the visibility of rival search engines and websites in its own search results.

This week's agreement comes a little more than a year after the U.S. Federal Trade Commission reached an agreement with Google after a lengthy antitrust investigation of its own.

In the FTC case, Google agreed to change some of its business practices and escaped the government scrape without a fine. Industry analysts characterized the FTC agreement as the antitrust equivalent of a good talking-to.

In its deal with the EU, Google agreed to give more prominent display to rival links and images in its search results. The option to "hide" or switch off rival links also was removed.

In another aspect of the antitrust case, rivals accused Google of imposing contractual restrictions that kept advertisers from moving their online campaigns to rival search engines. Google had already pledged to stop the practice before this week's deal was announced.

"I think it probably can be looked at as a win for Google," said Scott Strawn, IDC's Google analyst. "There's no fine associated with it and that could have been billions of dollars. Google has a lot of cash so it could have absorbed a hit like that, but it wouldn't have been a good thing. And look at the reactions of the other [rival] parties involved. They're not very happy about the ruling."

The EU agreement means Google not only avoided a fine or a deepened, and possibly embarrassing, legal battle, but it also gets rid of the distraction of dealing with long antitrust issue.

"I would assume this is something they would prefer not to grow into a larger distraction," said Whit Andrews, an analyst with Gartner. "They do not want to spend their time thinking about how much of their effort they'll end up burning on this issue. They don't want to have meetings about it. They don't want to be known for it. They want to be out there coming up with new media models."

However, even more than getting rid of a distraction, Andrews said Google has to be happy to come out from under the EU's spotlight without any major damage to its reputation with everyday users.

"I think we can see that [Google's search rivals] are aware of the fact that they have failed to create a situation where Google's popularity is being eroded," said Andrews. "They want the world to turn against Google. And that hasn't happened. Microsoft's memory of being an untrusted vendor is vivid. That was the climate Microsoft faced. They want Google to face the same thing."

Google's rivals, such as Microsoft with its Bing search engine, haven't pushed for antitrust action because they want financial redress, Andrews said. They want to tarnish Google's image and give its users a reason to try a different search engine, a different smartphone or a different cloud-based set of office apps.

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