European competition chief indicates 'get tough' approach on Google

by Phil Davies
by Phil Davies
January 11, 2013 01:37 PM GMT

The EU’s competition chief Joaquín Almunia has moved to prevent Google from distorting choices for consumers and taking business from rivals.

The search giant will be forced to change the way it presents results in Europe or face antitrust charges for “diverting traffic” to its own services.

Almunia’s approach is different from the US Federal Trade Commission which has given the green light to Google’s search engine.

He told the Financial Times: “We are still investigating, but my conviction is [Google] are diverting traffic.

“They are monetising this kind of business, the strong position they have in the general search market and this is not only a dominant position, I think – I fear – there is an abuse of this dominant position.”

Almunia said his concern is “the way they present their own services” and that he was “not discussing the algorithm” – the jealously guarded heart of Google’s search engine.

This suggests that one element of the solution will be labelling when Google’s in-house services – such as maps, airline flight details or shopping comparison information – are artificially given a higher billing than rivals.

But other changes are also likely to apply to how Google services are displayed within general search results.

Any European limits on Google could hamper the sweeping ambition that chief executive Larry Page has set for the company to turn itself from a search engine that primarily displays links to other sites into a “knowledge engine” that answers users’ questions directly with information plucked from Google’s own services, the newspaper reported.

While Almunia said Google showed a more constructive approach at a meeting in December, he warned that he would be “obliged” to issue formal charges if its proposal – expected this month – is unsatisfactory.

Google insists its services are “good for users and good for competition”.

Almunia explained the rare divergence with Washington on Google by the differing legal standards for abuse of dominance, as well as Google’s stronger position in Europe, where it handles more than 90% of searches.

EU officials argue that while its objectives – protecting consumer interests – are the same, the legal standard for abuse of dominance is higher in the US, partly because of the greater potential for private damages suits.

On two other areas – Google’s unauthorised use of information on rival websites and alleged restrictions on moving ad campaigns to other search engines – Almunia is in agreement with the FTC.

“Our conditions will not be weaker,” he said.

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