Google reaches antitrust deal with EU

The European Union's antitrust watchdog on Wednesday accepted “far-reaching” concessions offered by Google to settle allegations it is abusing its dominant position in Internet searches, bringing the three-year-old case close to an end.

Google proposed significant changes to the ways it displays some search results in Europe in favor of its competitors. But reaching a settlement will spare the company a longer antitrust procedure that could result in fines of up to 10 percent of the company's annual revenue, or about $5 billion.

EU Antitrust Commissioner Joaquin Almunia said he’s "strongly convinced" the U.S. company's proposals — its third attempt to address the competition concerns — are sufficient.

“This is an important step forward,” he told reporters in Brussels.

Under its proposal, Google will commit to display results from three competitors in a similar way to its own whenever it promotes specialized services like Google shopping, restaurant or hotel searches. It will also label more clearly search results stemming from its own services to allow users to distinguish between natural search results and those promoted by Google.

A shopping query for a gas grill, for example, would yield two boxes of the same size and position at the top of the search results page, one showing three “Google shopping results” and immediately to the left of it three results labeled “Alternatives,” according to an example provided by the Commission.

The changes will also be valid for search results displayed on mobile devices. At present, Google's own results are displayed prominently above all other search results.

The results from three competing search providers would be chosen using Google's web search algorithm. In many cases, the competitors would have to pay for their placement through an auction mechanism, the Commission said.

Google would also scrap restrictions that prevent advertisers from moving their campaigns to rival platforms such as Yahoo!'s search tool and Microsoft's Bing. The deal only applies to Europe.

The EU Commission last year threw out two sets of proposed concessions by Google because they were deemed insufficient.

"We will be making significant changes to the way Google operates in Europe," said Kent Walker, Google's general counsel. "The company now looks forward to resolving the matter for good," he added.

Once a settlement is reached, the concessions will be legally binding for five years across the 28-country European Union, the world's largest economy.

The U.S. Federal Trade Commission investigated Google in a similar case last year and decided not to take action.

Google’s ability to resolve competition issues in two major regions without a fine stands in sharp contrast to rival Microsoft, whose prickly relations with EU regulators landed it total fines of $2.7 billion over the past decade.

Alumnia’s announcement that he would accept Google's latest concessions without consulting the complainants prompted a furious response from its competitors.

Internet commerce lobby group ICOMP said the Commission should have given Google's competitors more time to examine and test the concessions.

"Without a third party review, Almunia risks having the wool pulled over his eyes by Google," the group said.

FairSearch, a Microsoft-led group of Google's tech competitors that includes firms like Oracle, Expedia and Tripadvisor, condemned the Commission's move as being "worse than doing nothing."

Its lawyer, Thomas Vinje, said the proposed commitments will "lock in discrimination and raise rivals' costs instead of solving the problem of Google's anti-competitive practices."

A separate antitrust investigation on Google's Android operating system is still ongoing, Almunia said.

Wire services