“Just Google® it!” How often have we heard that exclamation? The search engine has become a go-to source for information. What started as a research project at Stanford University in 1996 has become a tremendously useful and prominent world-renowned corporation. But, if left unchecked, a powerhouse company can overstep its bounds. In trying to enforce antitrust regulations, the European Union struck a deal with Google® on February 5, 2014, that restrained the search engine company’s ability to display its competitors’ links. Could it really be that simple?
Of course not. It’s important to understand the give-and-take associated with this deal. Google® had been subject to an antitrust probe in the European Union for around three years which had the potential to result in a five billion dollar fine. European antitrust regulators were investigating whether Google® abused its position in the marketplace by precluding display of search results of rival search engines on certain specialized search results (including shopping, restaurant reviews and travel searches) on its site. Google® agreed to settle – therefore avoiding a fine and finding of wrongdoing. Importantly, Google® was also able to shield its secret search result ranking algorithm from oversight by regulators.
So what does Google® have to give up in this deal? After a user executes a specialized search request (such as for shopping, travel, or local business reviews), Google® will have to display three links to websites of rival search companies’ services next to the Google® search results. Competitors may be charged 3 euro cents, about 4 U.S. cents, to bid for one of those three precious links. In addition, Google® agreed to make two other changes, similar to those requested by the F.T.C. in the United States. It will allow rivals, such as Yelp®, to forbid Google® from using their content in their specialized search services, yet those companies would avoid penalties for that limitation in the Google® search ranking algorithm. Google® will also eliminate some restrictions that prevent advertisers from moving their ads to other companies.
According to EU Competition Commissioner Joaquin Almunia, “[n]o antitrust authority in the world has obtained such concessions…[t]he concessions we have extracted from Google® in this case are far-reaching and have a clear potential to restore a level playing-field in the important markets of online search and advertising.”
The settlement must still be approved by the European Commission. If approved, the settlement conditions will be in effect for five years. Will this be enough to ease the minds of European antitrust officials? After all, Google® has 90% of the search engine market share in Europe (in contrast, its market share in the United States is closer to two thirds). Europe’s position is unmistakable: it wants to allow for more competition and pave the way for smaller search engines to have their say amidst Google®’s expansive coverage in the industry.
Do you think this is the best way to do it? David Wood, legal counsel for Icomp, recently remarked that Mr. Almunia risks “having the wool pulled over his eyes by Google®.” Critics and rivals have sneered at Mr. Alumnia’s decision to forgo extensive market testing and third-party review of Google®’s concessions.
Will three links in Google®’s specialized search results be enough to enable competitors to play on a level playing field or to even gain a foothold in the search engine marketplace? It’s time for the competition to step up its game in Europe… just five years left on the clock.
(Neeraj Joshi)