EU regulators are reportedly prepared to accept Google's proposed solution to a two-year antitrust investigation into its search and advertising practices. While the text of the offer hasn’t yet been made public, it will force Google to change how it labels certain vertical search results in the EU, such as those for airplane tickets or hotel prices, but won’t require any changes to its underlying search algorithm, says The New York Times, citing two anonymous sources briefed on the agreement. Unlike its settlement with the US FTC, the agreement will reportedly be legally binding for five years, but crucially it won’t state that Google abused its monopoly power, or require the company to pay any fines. The changes won't show up for at least another month while others in the industry consider the plan in a process called market testing, which top antitrust regulator Joaquín Almunia has said would be necessary before a final solution is reached.
Google will have to prominently show three links from its competitors’ services for every one of its own
The EU investigation hinged on four concerns, each of which has been touched on in the settlement. Firstly, competitors were concerned that Google was featuring search results from its own specialized services like Google+ Local more frequently than those from competitors like Yelp. Under the agreement, Google will have to prominently show three links from its competitors’ services for every one of its own, and it will need to clearly mark which of the results come from its own services. A second concern related to how Google displayed search results from competing services — under the agreement, search services will be able to have their results removed from Google’s vertical search results without hurting their overall page rank for non-specialized searches.
The agreement also reportedly includes changes in Google’s AdSense contracts that make it easier for sites that use the advertising service to include other ads on their pages from competing alternatives.
Overall, it appears that the EU investigators managed to get much tougher concessions than their US counterparts. But as former Google adviser and antitrust law professor Herbert Hovenkamp tells The Times, the actual impact on Google’s alleged monopoly power is likely to be slight at best. "The question you have to ask is: Is labeling going to change any consumer behavior? And if the answer is no, then it’s not going to do any good for Microsoft Bing or for any rival search engines."
Update: Even though the contents of Google's proposal haven't been made public yet, the company's competitors aren't wasting any time in voicing their disdain. David Wood, a lawyer for ICOMP (an industry group that includes Microsoft) told Bloomberg that if the solution is indeed based on clearer labeling, "frankly, that's a non-starter." He added that "when the market test goes ahead, we will try and be constructive… but if it doesn’t clearly set out non-discrimination principles and the means to deal with the restoration of effective competition, plus effective enforcement and compliance, it’s very difficult to see how it can be satisfactory."