Google has reached a not-yet-finalized settlement with European antitrust authorities to change its search and advertising functions in a bid to quiet charges it unfairly promotes its own services over those of rivals, officials announced Wednesday.
The tentative agreement would exempt Google from any wrongdoing and would not require the Internet giant to pay any fine after a more than three-year investigation. Joaquin Almunia, the European Union's competition commissioner, said Google's concession offerings are "capable of addressing the competition concerns" the commission had raised.
"After a careful analysis of the last proposals we received from Google last month, and intense negotiations that managed to further improve what Google sent to us in mid-January, I believe that Google's new proposals are capable of addressing the competition concerns I set out to them," Almunia said at a press conference in Brussels, according to his prepared remarks. "The alternative of adversarial proceedings would take many years, with many uncertainties, and would not have the same immediate impact."
Almunia noted that four kinds of business practices waged by Google "raised concerns from a competition point of view" when the commission opened its investigation back in November 2012.
The first two concerns involved Google's "specialized search services" on things like hotels and restaurants, which the commission worried demonstrated a favoring of the company's own services above rival offerings. The other two concerns dealt with online advertising.
"We will be making significant changes to the way Google operates in Europe," said Kent Walker, Google's senior vice president and general counsel. "We have been working with the European Commission to address issues they raised and look forward to resolving this matter."
The deal will make Google guarantee that it displays the results of three rivals during service searches in a fashion similar to its own services.
Almunia had previously rejected proposals by Google twice and warned that "the third try should be the last one." He additionally cautioned in his remarks that he would have been "obliged to go in a different direction" had the latest round of negotiations not meted out a workable compromise.
The deal goes farther than the settlement Google reached last year with the Federal Trade Commission over similar concerns that it was manipulating its search results to hurt competition. Google agreed to only minor changes to its business in the United States.
But the European settlement was not enough to satisfy Google's competitors, who have been lobbying regulators around the world to crack down on the search giant.
"The European Commission has tentatively accepted a proposal by Google which is worse than doing nothing," said Thomas Vinje, legal counsel for FairSearch, a group representing Microsoft, Expedia, TripAdvisor, and other companies.
Vinje claimed Google's commitments "lock in discrimination" and raise rivals' costs.
"The Google proposal requires rivals to pay Google for placement similar to that of Google's own material, undercutting the ability of other to compete and provide consumer choice," he said. "This will be done through an auction mechanism that requires participating companies to hand the vast majority of their profits to Google."
Brendan Sasso contributed