Google Wins Time From Europe's Antitrust Enforcer - NYTimes.com - New York Times

Google Wins Time From Europe’s Antitrust Enforcer

BRUSSELS â€" Google on Tuesday won more time from the European Union’s top antitrust enforcer to make changes in its online services that could bring the company a step closer to resolving a three-year-old investigation without a big fine or a finding of wrongdoing.

After meeting with Eric E. Schmidt, Google’s executive chairman, the antitrust official, Joaquín Almunia, said in a statement Tuesday that “we have substantially reduced our differences.”

“I now expect Google to come forward with a detailed commitment text in January 2013,” said Mr. Almunia, the E.U. competition commissioner.

The meeting between Mr. Almunia and Mr. Schmidt came as regulators in the United States appeared to be backing away from what had initially been one of the centerpieces of an antitrust investigation on both sides of the Atlantic. Early on, regulators focused on a question that drilled to the core of Google’s business model: whether its popular Web search engine thwarted competition by favoring the company’s services in presenting results of search queries.

Recent accounts of the U.S. proceedings indicate American officials are no longer pressing the search-ranking issue. But Mr. Almunia is evidently continuing to hold Google accountable on that. He said Tuesday that in their discussion, the company indicated it would make changes in “the way in which Google’s vertical search services are displayed within general search results as compared to services of competitors.”

The other areas in which Mr. Almunia expected to reach a deal included the ways Google uses and displays content from other companies in its search tool, and the restrictions that Google places on advertising and advertisers. Any concessions offered by Google would be tested in the marketplace to assess their acceptability to other companies, Mr. Almunia said, before becoming binding.

If Mr. Almunia accepts a settlement offer, Google would avoid a possible fine of as much as 10 percent of its annual global revenue, about $37.9 billion last year. It would also avoid a guilty finding that could restrict its activities in Europe. “We continue to work cooperatively with the commission,” said Al Verney, a Google spokesman in Brussels.

Exactly what concessions on search services that Mr. Almunia can wring from Google remained an open question Tuesday, though antitrust experts agreed that he had more leverage than his U.S. counterparts.

While Google is the dominant search engine in the United States, it holds even greater sway in Europe, accounting for more than 90 percent of searches in a number of major markets. That is one factor giving the Europeans greater leverage in trying to set rules on how Google ranks competing services.

Another factor is European antitrust law, which has long given competitors more protection than U.S. law provides.

Antitrust law in Europe, and the commission’s approach to it, has shifted in recent years, raising the hurdles for complainants against dominant companies, said Emanuela Lecchi, an antitrust partner in London with the law firm Watson, Farley & Williams.

Even so, she said, Europe still offers rivals greater protection. Compared with the United States, Ms. Lecchi said, European regulators “are more inclined to try and make sure there is always a choice of players on markets, and that’s something that might allow Google’s rivals to make more progress at the end of the day.”

Some experts said the U.S. Federal Trade Commission could be playing a tactically clever hand by allowing the Europeans to push Google an extra mile. They suggested that the F.T.C. would be shielded from accusations it was attacking a U.S. champion, even though any concessions Google made to the Europeans on search were likely to apply globally anyway.

“The F.T.C. may be seen as outsourcing the more difficult parts of this investigation to another agency,” said Andreas Stargard is a competition lawyer and antitrust litigator in Brussels with the firm Paul Hastings. Besides, Mr. Stargard said, “the F.T.C. isn’t as expert in these complex antitrust matters as it used to be.”

As the scope of the U.S. investigation showed signs of narrowing in recent days, groups concerned about Google’s behavior, especially in online search, have been calling on the Europeans to ensure that any decision in the case would give them a better chance to challenge Google’s market share in areas like mapping and travel.

“It’s all very well dealing with the manifestations of abuses, but what the market really wants to know is how we get competition back into search,” David Wood, the legal counsel for ICOMP, an industry group based in Europe that includes Microsoft among its members, said Tuesday.

Earlier in the week, FairSearch, a group with most of its member companies in the United States and Europe, and that also includes Microsoft, asserted in a statement that “Google dominates more than 93 percent of the search market” in Europe. FairSearch urged Mr. Almunia to take the opportunity to “build on a record of leadership in global antitrust enforcement” by pressing Google for more concessions than in the United States.

Steve Lohr contributed reporting from New York.

A version of this article appeared in print on December 19, 2012, in The International Herald Tribune.