Google yields as EU competition chief pulls rank

The search giant's battle with Brussels looks close to settlement.

by Gabriella Griffith
Last Updated: 30 Sep 2014
After three years of wrangling with the EU competition commission over its search function, Google looks close to settling, as Brussels accepts its latest offer.
Google has been the subject of an EU probe since 2010 when rivals (Microsoft among them) complained about Google’s search function and its habit of pointing searchers towards its own in-house businesses – such as maps and shopping services – at the expense of its rivals’.
The group’s first offer was rejected by Brussels and for a time it looked like talks could collapse, but Google’s latest offer has swept in and saved the day (or at least the dialogue).
Rejected offer number one promised to provide mandatory links to rival services in search results, but this was deemed to have too many loopholes. Offer number two closes these up by saying the rival links will appear across all devices, including mobile.
The search giant isn’t accustomed to giving so much ground to a competition watchdog. It’s the first time Google has conceded to an antitrust enforcement agency, ever. A similar investigation by the Federal Trade Commission in the US ended without such promises from the search giant.

Google, predictably, isn’t over the moon.

‘This has been a very long and very thorough investigation,’ said Kent Walker, its general counsel.
‘Given the feedback the European Commission received on our first proposal, they have insisted on further, significant changes to the way we display search results. While competition online is thriving, we’ve made the difficult decision to agree to their requirements in the interests of reaching a settlement.’
How noble.
Google’s critics are expected to find little comfort from this ruling. Lobby groups such as FairSearch and the snappily-titled Initiative for a Competitive Online Marketplace were hoping for more dramatic changes, such as Google selling off its search business (fat chance).
Brussels, however, looks happy for the time being.
‘Now with significant improvements on the table I think we have the possibility to work again to seek a solution based on a . . . settlement decision,’ said Joaquin Almunia, the EU competition chief.
Google must now submit data to show the effectiveness of its changes before a final decision is made.

Google executives won’t be reclining in their multicoloured bean bags just yet. The search giant must now be bracing itself for round two of ‘Tax Gate’ following its revelation on Sunday that it paid just $55m in tax in the UK on sales of $4.9bn.
Having already been summoned twice by the commons public accounts committee, Google won’t relish a new round of battles with public accounts chair Margaret Hodge et al.
Back in May, Google’s executive chairman Eric Schmidt said he was ‘perplexed’ at the public anger over his company's tax affairs. As anger stirs once more, let’s hope he’s prepared for a fresh round of befuddlement.

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