Google has reached a preliminary agreement with the European Commission, the European Union’s antitrust body, over its search practices in Europe.
In doing so, Google managed to avoid the multi-billion-dollar fine that the Commission was apparently willing to dispense over the company’s competitive practices. Under the terms of the agreement, whenever Google promotes its own specialized search services (e.g., those that focus on specific categories of information, such as hotels or restaurants) on its Web page, it must also prominently display similar offerings from three rivals. “This principle will apply not only for existing [specialized] search services, but also to changes in the presentation of those services and for future services,” read the Commission’s press release on the matter.
In addition, Google agreed to allow “content providers” to opt-out from having their services or material used in Google’s specialized search services, without penalty; the company will also remove any restrictions to clients’ advertising campaigns running on rival search platforms.
The deal only covers the EU, where Google continues to hold a dominating portion of the online search market. An “independent monitoring trustee” will ensure that Google complies with its commitments.
“I believe that the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns,” European Competition Commissioner Joaquin Almunia wrote in a statement. “Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative.”
The agreement comes after Google made multiple attempts to deal with the Commission’s concerns; the company’s statement on the deal was fairly curt. “We will be making significant changes to the way Google operates in Europe,” Google general counsel Kent Walker told Reuters. “We have been working with the European Commission to address issues they raised and look forward to resolving this matter.”
This is the second regulatory bullet that Google’s managed to dodge in the past year. In January 2013, it reached an agreement with the U.S. Federal Trade Commission, which also had concerns over the company’s competitive practices. Under the terms of that deal, Google agreed to give competitors access to select patents on fair, reasonable, and non-discriminatory terms (FRAND).
The FTC investigation focused on whether Google had altered its search algorithms to damage any up-and-coming rivals, particularly with regard to Universal Search. The agency concluded that Universal Search and changes to the algorithms “could be plausibly justified as innovations that improved Google’s product and the experience of its users,” even if the actual adjustments ended up harming competitors.
Considering the billions of dollars in fines that the European Commission could have leveled at Google, the company must be feeling very lucky at the moment.