Google Avoids $5 Billion Fine by Settling Antitrust Case, Tentatively

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European Commissioner for Competition Joaquin Almunia addresses the media, at the EC headquarters in Brussels on Wednesday, Feb. 5.

Image: Yves Logghe/Associated Press

By Lorenzo Franceschi-Bicchierai2014-02-05 15:58:59 UTC

Google has reached a tentative agreement to settle a three-year antitrust investigation in Europe, letting the search giant avoid a potential $5 billion fine.

The European Commission, which launched the probe in 2010, announced the deal on Wednesday after Google promised to make "significant" changes to the way it displays rivals' search results. Google's competitors in Europe accused the search giant of more prominently displaying search results from businesses that paid Google to display their results.

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"My mission is to protect competition to the benefit of consumers, not competitors," Joaquin Almunia, the European Union’s competition commissioner who is leading the probe, said in a statement. "I believe that the new proposal obtained from Google after long and difficult talks can now address the Commission's concerns."

At the heart of the investigation was Google's methods for displaying specialized search services such as restaurant, hotels or flight search engines. Competitors such as Microsoft and TripAdvisor accused Google of favoring its own services and taking advantage of its dominant market share; Google controls 75% of the EU market, according to comScore.

Google proposed three main changes to address these concerns, according to a memo published by the European Commission.

First, Google will inform users with a label every time it promotes its own specialized search services (see below). Second, those results will be separated from others to mark a distinction between "normal" web search results and sponsored ones. Third, Google will display "prominent links" to three rivals for "relevant specialized search services," according to the statement. These must be displayed in the same format as Google's own services, so as not to discriminate one way or another.

How Google displays specialized search results right now.

How Google will display specialized search results after the settlement.

"We will be making significant changes to the way Google operates in Europe," Kent Walker, Google's general counsel, said in a statement. "We have been working with the European Commission to address issues they raised and look forward to resolving this matter."

Google will also let content providers choose which materials the search giant can display for its own services. Currently, Google uses material like customer reviews from other websites when displaying its own offerings, according to the European Commission's memo. According to the settlement, Google will ease restrictions on advertisers, which previously prevented them from easily moving ad campaigns to Yahoo or Bing.

The announcement comes after two other settlement offers by Google were rejected by the Commission.

However, Wednesday's announcement is not the end of the investigation. The European Commission will give competitors a "reasonable period" of time to comment on the deal and chime in.

"If I receive strong arguments that oblige changes to my decision, I am always ready, I am flexible," Almunia, who is leading the probe, said at a press conference, stating he was content with the current deal. "I don’t see why, from now on, I would change my mind based on the proposals Google has put forward."

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Topics: Advertising, Antitrust, europe, European Commission, US & World, World