Google Stumbles in Europe

Google Stumbles in Europe

No, not in search, they're still dominant in search

Google is confronting a harsh reality that Microsoft learned the hard way a decade ago: Antitrust regulators in Europe aren't pushovers like their US-based cousins. And while the search giant is obviously facing a long line of legal challenges around the world, two EU-based issues are coming to a head: A proposed settlement over Google's search business there, and the firm's more recent attempt to meet a "right to be forgotten" ruling.

Let's just say this hasn't been a good week for the company.

Google's search-based antitrust case dates back to 2010, when European Commission regulators finally started an investigation of the company's search practices after receiving numerous complaints from competitors. Two years later, the EU handed down its findings: Google was indeed abusing its search monopoly market power by illegally harming search competitors. But the EC offered Google a compromise that Microsoft never received: If it voluntarily agreed to change its business practices, the firm would escape punishment.

Two years later, a surprisingly belligerent Google has weathered several rounds of settlement proposals and has agreed to only minor changes. The EC was trying to avoid a prolonged case—perhaps because of the decade-long silliness of its battles with Microsoft—but all it really did was anger Google's competitors, which have argued repeatedly that regulators were letting the company off with a virtual slap of the wrist.

The EC may be listening. After essentially agreeing to Google's proposal and going through the paperwork motions of wrapping up the case, the EC is reportedly "revisiting" the antitrust case and may now require the firm to make deeper concessions. This is an unusual and unprecedented step, but then so was the EC's up-front settlement offer.

"The Google investigation is ongoing," a European Commission statement explains. "We have written to the formal complainants [of which there are 20] in the ongoing proceedings and we have not received yet all their replies. In early August all replies will have been submitted. We will then thoroughly analyze the arguments they contain and, depending on the outcome of that analysis, the next steps will be decided by Vice President Almunia in September."

The EC's desire to quickly wrap up this case may be alarming to Google's critics, but they can take heart in this fact: Regulators want to put this case behind them in part so they can expend more effort on the many other pending EU antitrust and legal cases that Google now faces. There are now two antitrust investigations against Google's Android mobile OS, for example.

And then there's the "right to be forgotten" issue. Perhaps because of the kid gloves it was apparently receiving in the search case, Google curiously agreed to meet the fairly onerous requirements of a European Union Court of Justice ruling that required it to remove spurious and irrelevant search results about individuals in the EU when they complained. Google said publicly that it disagreed with the ruling, but it immediately started work on a system by which users could complain and potentially have search results about them removed.

Amazingly, privacy watchdogs within the EU don't think Google has done enough. And the search giant will now attend a meeting with regulators in Brussels this week—along with representatives of Yahoo and Microsoft—to defend its actions and debate how best to meet the demands of these search result removal requests. It's like being forced to stay after school and be berated for a problem you've already fixed.

"The polluter pays, the polluter should clear up," UK information commissioner Christopher Graham told the BBC this week. "Google is a massive commercial organization making millions, millions and millions [of dollars] out of processing people's personal information. They're going to have to do some tidying up. They won't do all the tidying up that some people might like, because if you embarrass yourself, there's not much you can do about it."

Microsoft, which owns only a tiny portion of the EU search market, has already proactively agreed to meet the "right to be forgotten" requirements in its Bing search offering. And Yahoo has not, to my knowledge, addressed this issue. But Google, with 90 percent usage share in the EU, is of course the big target.

"The issues at stake here are important and difficult, but we're committed to complying with the court's decision," Google chief legal officer David Drummond wrote in an online article earlier this month.

You've got a long road ahead of you, Mr. Drummond.

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