Google Offers Concessions in EU Antitrust Case - New York Times

BRUSSELS â€" , facing the prospect of formal charges stemming from an investigation in Europe into its search and advertising business, offered concessions on Monday to competition regulators in an effort to settle the case and avoid a lengthy and potentially expensive dispute.

The offer came in the form of a letter from Eric E. Schmidt, the executive chairman of Google, to Competition Commissioner Joaquín Almunia, a spokesman for Mr. Almunia said.

A Google spokesman, Al Verney, said the U.S. technology company had “made a proposal to address the four areas the described as potential concerns.”

“We continue to work cooperatively with the commission,” Mr. Verney said.

Mr. Almunia said in May that the company might have abused its dominance in Internet searching by promoting its own businesses at the expense of competitors. He also told the company to propose changes in a matter of weeks to its methods of answering search queries, or to face formal objections in the case.

The commission declined on Monday to reveal what was in the letter.

But antitrust experts said the company would be extremely wary of giving away too much at this stage, partly because of the ramifications for its business beyond Europe, where regulators could take what Google offers as a starting point for their own demands.

The company is also under investigation in the United States, Korea and India following similar complaints.

“Google will be very protective of its search algorithms,” said Emanuela Lecchi, a partner at the law firm Watson, Farley & Williams in London, who does not represent clients involved in the case.

Even so, said Ms. Lecchi, the company “may be prepared to concede some alteration to the way it displays results.”

Another area where it “may be relatively straightforward for Google to make an offer could be agreeing to enter into a code of practice with advertisers and companies that would include abiding by some informal appeal mechanism or arbitration over contested ranking,” said Ms. Lecchi.

The overture to settle from Mr. Almunia was a rare public offer by the commission, which is seeking to speed up resolution of antitrust cases, particularly in the fast-changing technology marketplace where proposed remedies often rapidly lose their relevance.

In previous antitrust cases in Europe involving U.S. technology giants like Microsoft and Intel, the investigations ran for about a decade before the commission finally ordered changes to their business practices.

Last week, the second-highest court in the largely upheld an €899 million, or $1.1 billion, penalty against Microsoft, though it still could appeal to the Union’s highest court. This month, Intel will make its arguments at a hearing to overturn its penalty, which included a fine of €1.1 billion.

Mr. Almunia must now study Google’s offer. If he were to accept, the company would avoid a possible fine of up 10 percent of its annual global revenue, about $37.9 billion last year. Google would also avoid a guilty finding that could restrict its business activities in Europe.

In May, when Mr. Almunia went public with his request for concessions, he said Google might have unfairly exploited its market position by displaying links to its own services, like Google maps or images, when it answered a query, giving preference to them over those of competitors.

He also said Google included material in its own search results that was copied from competitors’ Web sites that offer services like restaurant guides and travel advice.

Two other areas of concern involved how Google conducted its advertising business, including how it delivered search ads on partner sites.

Google had previously defended its practices by indicating that innovation online has never been greater.

Google is the dominant search engine in the United States but holds even greater sway in Europe, accounting for more than 90 percent of searches in a number of major markets.

Even if Google successfully assuages the concerns of Mr. Almunia, it could still face more pressure from the European authorities in other facets of its business.

Mr. Almunia opened cases in April against Motorola Mobility, a Google subsidiary, for possible abuse of patents following complaints by two rivals, Microsoft and Apple. Mr. Almunia is also looking at Google’s , which the company has used to move into a leading position among mobile phone operating systems.