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Google’s Settlement Offer Sparks European Debate

Posted  September 30, 2014

A View from Constantine Cannon’s London Office

By James Ashe-Taylor and Ana Rojo Prada

Debate continues over Google’s settlement offer in search and advertising investigation as European Commission indicates that more is needed.

Google and Rupert Murdoch’s News Corp have traded blows publicly following comments by the European Commission indicating that it would reopen its antitrust investigation into Google’s search and advertising business.

Outgoing Competition Commissioner Joaquin Almunia has indicated in interviews over the last week that Google’s proposals to settle the investigation do not fully address the Commission’s concerns.

In an open letter to Almunia, News Corp Chief Executive Robert Thomson called Google “a platform for piracy and malicious networks.”  He also alleged that Google deliberately made it difficult to “access information independently and meaningfully,” and that its sudden changes to the ranking and display of search results prejudiced small companies.

These criticisms echo comments made earlier in the year by German publisher Axel Springer, who claimed that publishing houses were “afraid of Google.”  A wide range of commentators, from Microsoft to German and French government ministers, have criticised the proposed Google settlement in recent months.

Google has strongly rebutted the allegations made in Mr. Thomson’s letter.  In particular, Google has refuted the claim that it acts as “the gatekeeper to the Internet,” pointing to the existence of other popular search engines.  Google has also drawn attention to the 222 million webpages that it has erased since 2013 in response to allegations of copyright infringement.

Google asserts that the terms of its proposed settlement with the European Commission include unprecedented and far-reaching changes to its way of doing business.  It says that competitors are deliberately disrupting its attempts to negotiate a settlement by recycling alarmist criticisms, whereas Google itself is focused on serving consumers, rather than their websites.

In an early test of her mettle, the incoming Competition Commissioner, Margrethe Vestager, will have to decide over the next few months whether to settle with Google, issue a formal statement of objections, with a view to making an infringement decision, or drop the case.  Ms. Vestager has already told members of the European Parliament that she will not negotiate or compromise on antitrust settlements that do not “fully address” the Commission’s competition concerns, suggesting she may be inclined to take a firm line with Google.

Edited by Gary J. Malone

Tagged in: Antitrust Enforcement, International Competition Issues,