Insight: Google goes softly-softly on European antitrust

Mon Jun 11, 2012 9:28am EDT
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By Sebastian Moffett

BRUSSELS (Reuters) - Google is searching for the answer to a four-billion-dollar question: can a new, gentler approach from a U.S. tech giant persuade the European Union to be more lenient in competition cases?

The world's dominant Internet search provider has been in the EU executive's crosshairs since November 2010, when the European Commission started an investigation after complaints it had abused its position to crush smaller firms, an accusation once reserved for rival Microsoft Corp. The Commission could fine Google up to 10 percent of global revenues - nearly $40 billion last year - and order changes to its operations. The alternative, a long battle in EU courts, might harm its image.

Key decisions are likely within months, and all participants in the investigation hope they can do better than previous cases. In the past, companies campaigned aggressively and faced stiff fines. For its part, the Commission was criticized for being too slow in an industry that needed to keep innovating.

Competition chief Joaquin Almunia said last month he was keen to get a faster resolution than in the past. Google says it has learned not to be openly combative.

Almunia has said he has "concerns where Google business practices may be considered as abuses of dominance". These include the possibility Google's general searches direct users to its own specialist search services, away from smaller rivals. He said on Friday Google had until early July to come up with remedies - that is, to decide how much of its operational model it would be prepared to give up. In particular, Google might need to give away aspects of its search algorithms - its Web search instructions, a secret that some compare to the formula for Coca-Cola.


The case marks a coming-of-age for the company which rose on the mantra "Don't be evil."

Since the EU investigation started, Executive Chairman Eric Schmidt has been on a campaign to show Google in a conciliatory light, highlighting the ways it benefits Europe. The company has sponsored studies, one of which found that the Internet created 2.6 jobs for each one it destroyed.   Continued...

Surfboards lean against a wall at the Google office in Santa Monica, California, in this October 11, 2010 file photo. REUTERS/Lucy Nicholson/Files