Google faces hefty fine from European Union antitrust authority

Microsoft also needs to honor commitments it has made in an unrelated antitrust settlement, says the EU competition watchdog

Europe's competition watchdog is considering formal proceedings against Google over antitrust complaints about the way it promotes its own services in search results, potentially exposing the company to a fine of 10 percent of its global turnover.

Talks with the Internet giant about concessions it will make to settle the case are still dragging on, European Union Competition Commissioner Joaquin Almunia said in New York on Thursday.

Google offered some concessions to the European Commission in July, but the Commission has not yet circulated these to competitors to get a sense of how the remedies might work in practice. Alumnia said he has ordered Commission staff "to engage into technical discussions with Google in order to assess in-depth the solutions presented." But he warned that if these are found lacking, he would be "obliged to continue with our formal proceedings".

If the Commission found Google guilty of breaking E.U. competition rules, it could restrict Google's business activities in Europe and fine the company up to 10 percent of its annual global revenue (US$37.9 billion last year).

Google is accused of using its search service to direct users to its own services and to reduce the visibility of competing websites and services. The complaints were first lodged by French search engine eJustice.fr and the U.K.-based Foundem in 2010. But 14 other companies have since followed their lead. The Commission extended the case into a full investigation to determine whether Google unfairly penalizes rivals in November last year.

There are also allegations that Google may have copied travel and restaurant reviews from competing sites without their permission and that its contractual restrictions may prevent advertisers from moving their online campaigns to rival search engines.

Almunia also took a hard line on an unrelated Microsoft antitrust case, in which the company was recently caught not applying a remedy it had agreed to.

To close an investigation of abuses of its dominance in the operating system market to gain browser market share, in 2009 the company promised to offer Windows users a choice screen allowing them to easily select their preferred web browser.

"This remedy was very effective while it was implemented," said Almunia. But Microsoft did not include the choice screen with the version of Windows released in February 2011.

The Commissioner said that while he finds "commitments offered by the companies themselves are a good way to solve competition problems, as an alternative to lengthy proceedings, the policy can work only if they translate their words into action."

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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Jennifer Baker

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