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Europe's antitrust chief urges Google to settle allegations

The European official's urging of a settlement is an unusual move, experts say. It comes amid an inquiry sparked by complaints by firms that Google treats rival search results differently from its own.

May 22, 2012|By Jim Puzzanghera, Los Angeles Times
  • A screen image of the Google logo in Washington, D.C.
A screen image of the Google logo in Washington, D.C. (Karen Bleier AFP / GettyImages…)

WASHINGTON — Europe's top antitrust official said that Google Inc. may have abused its dominance to squelch online competition and urged the company to settle allegations to avoid formal charges that could carry a hefty fine.

A quick resolution to the investigation that began in 2010 would benefit the fast-moving online marketplace, Joaquin Almunia, head of competition policy for the European Commission, said in a rare public call to end the case quickly.

A settlement "at an early stage is always preferable to lengthy proceedings," Almunia said.

"I hope that Google seizes this opportunity to swiftly resolve our concerns, for the benefit of competition and innovation in the sector," he said Monday, urging the company to offer proposals "in a matter of weeks" to remedy the problems.

A Google representative said the company disagreed with the findings but was willing to discuss the European Commission's concerns.

European antitrust experts, surprised by the public prodding to settle, were split on whether the commission was trying to salvage a weak case or quickly end a strong one to avoid market damage.

"It's very unprecedented. Normally they would ask to engage in settlement talks behind closed doors," said Nicolas Petit, a law professor at the University of Liege in Belgium. "The fact that the commission is trying to force Google to make a proposal may indicate the case might not be that strong."

But Dennis Oswell, a European antitrust attorney at Oswell & Vahida, said Monday's announcement showed that Almunia probably has a strong case and is trying to pressure Google to settle to avoid more bad publicity.

Google is still smarting from a $25,000 fine by the Federal Communications Commission for obstructing an investigation into the collection of personal information from millions of households as part of its Street View service. And the company is facing an antitrust inquiry in the U.S. similar to the European action.

"If this case goes to a decision and it's a negative decision with a big fine, other regulators are going to feel emboldened to pile on," Oswell said. "Google is an easy target right now."

European officials have been conducting a formal antitrust investigation of Google in response to complaints from more than a dozen companies, including Microsoft Corp., that the Internet search giant was treating rival search results differently from its own.

Besides facing a Federal Trade Commission inquiry into the matter, Google also is dealing with investigations by regulators in Argentina and South Korea.

Almunia said that preliminary conclusions from Europe's investigation had raised four areas of concern "where Google business practices may be considered as abuses of dominance."

One was possible preferential treatment by Google in how it displays links to its own specialized search services, such as those for restaurants, compared with links from competing services. Another commission concern was that Google might be copying original material from competitors' websites without prior authorization.

Shivaun Raff, chief executive of Foundem, a British price comparison site that has filed a complaint about Google's practices, said he welcomed Almunia's push for a "swift end to Google's anti-competitive practices."

"We are pleased that the commission is pursuing a path that could result in the particularly rapid implementation of binding remedies," Raff said.

Google said it had "only just started to look through the commission's arguments."

"We disagree with the conclusions but we're happy to discuss any concerns they might have," the company said.

"Competition on the Web has increased dramatically in the last two years since the commission started looking at this, and the competitive pressures Google faces are tremendous," the company said. "Innovation online has never been greater."

jim.puzzanghera@latimes.com

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