European antitrust chiefs are offering Google a chance to end the 18-month investigation into alleged monopoly abuses by the company.
Competition commissioner Joaquín Almunia said that its initial investigations had identified four areas of concerns over Google's businesses practices:
First, in its general search results on the web, Google displays links to its own vertical search services. Vertical search services are specialised search engines which focus on specific topics, such as for example restaurants, news or products. Alongside its general search service, Google also operates several vertical search services of this kind in competition with other players.
In its general search results, Google displays links to its own vertical search services differently than it does for links to competitors. We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.
Our second concern relates to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorisation. In this way they are appropriating the benefits of the investments of competitors. We are worried that this could reduce competitors' incentives to invest in the creation of original content for the benefit of internet users. This practice may impact for instance travel sites or sites providing restaurant guides.
Our third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements. Search advertisements are advertisements that are displayed alongside search results when a user types a query in a website's search box. The agreements result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services. This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters.
Our fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google's auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google. We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising.
But he added that rapidly changing industries, such as technology, benefited from having disputes resolved speedily. Therefore Google was being given “a matter of weeks” to come up with acceptable compromises.
“If Google comes up with an outline of remedies which are capable of addressing our concerns, I will instruct my staff to initiate the discussions in order to finalize a remedies package,” he said.
Google had been subject to complaints from 16 companies in Europe, including the likes of TripAdvisor and Opodo. They argued the search giant's results gave undue weight to its own vertical search tools.
“I hope that Google seizes this opportunity to swiftly resolve our concerns, for the benefit of competition and innovation in the sector,” Almunia said.
The EC has the power to fine firms as much as 10 percent of their annual revenues, if they are found to have breached competition laws.
The search giant also faces a similar probe in the U.S. Senators Herb Kohl and Mike Lee, both of whom last year were involved in a hearing with Eric Schmidt, Google's Executive Chairman, said the deal offered by the EC was a positive step forward in addressing the concerns they also have with the firm.
"We are pleased that the EU is working with Google to develop a set of voluntary solutions to the search engine's problematic practices, including those that we identified at our September 2011 hearing," they said. "We are hopeful that Google will be a willing partner with the EU's Competition Commissioner."
The senators also called on the Federal Trade Commission (FTC) to step up its investigation by considering both the issues they have previously raised and those singled out by the EC to "ensure a competitive search market where consumers can fairly pick the winners and losers in our online economy."