Google Nears Settlement in Sweeping EU Antitrust Case

Antitrust regulators in the European Union (EU) said on Tuesday that they had reached an “understanding” with Google that will likely lead to a settlement of the online advertising firm’s antitrust investigation. The European Commission (EC) had previously taken the unusual step of warning Google publicly that it would face sweeping antitrust charges if it did not settle quickly.

Google has apparently moved quickly to do so. In the past few weeks, it sent the EC a set of secret proposals aimed at addressing the EU’s four key areas of concern. And this week’s comments from the EC suggest that the proposals were satisfactory.

“The Commission considers Google’s proposals as a good basis for further talks and has now reached a good level of understanding [with the company],” an EC spokesperson said. The EC is now scheduling technical meetings with Google to hammer out the details of a proposed settlement.

After two years of investigation, regulators in Europe found that Google was violating EU antitrust laws in four areas and it used very specific language to describe these offenses:

Google Search. Google provides “preferential treatment” in search results to its own services over those provided by third-party companies.

Stolen content. Google steals “original material from the websites of its competitors … without their prior authorization” and is “appropriating the benefits of the investments of competitors.”

Google’s advertising platform. Google requires companies that display Google ads on their own websites to “obtain all or most of their requirements of search advertisements from Google, thus shutting out competing search advertising providers.”

Advertiser lock-in. “Google imposes contractual restrictions on software developers that prevent them from offering tools that allow the seamless transfer of search advertising campaigns across [Google] AdWords and other platforms for search advertising.”

The EC alerted Google privately and then in May, in an unusual move, publicly that it would be formally charged with four antitrust violations if it did not move quickly to address the concerns and settle the case. “We disagree with the conclusions, but we're happy to discuss any concerns they might have,” a Google statement from May explained. Confronted with a clear legal threat, the company has since proven amazingly open to changing its ways, though of course the details of its settlement proposal are still a mystery.

Those familiar with Microsoft’s lengthy—and, as it turns out, ongoing—antitrust entanglements in Europe are likely confused by the EC’s different tactics for dealing with Google. But EC competition commissioner Joaquín Almunia says that Google’s offenses are largely tied to online advertising, a quickly evolving business that is moving from the web into the mobile devices market. Here, the EC felt it needed to curtail Google’s illegal business tactics more expediently. “These fast-moving markets would particularly benefit from a quick resolution of the competition issues identified,” he said this week, noting that a settlement is vastly preferable to “lengthy proceedings.”

Even if Google does settle this sweeping case, the online giant still faces other antitrust probes around the globe. The EU has separately begun examining Google’s smartphone and tablet platform, Android, for example, and antitrust regulators in the United States, Argentina, and South Korea are formally investigating the firm for various infractions.

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