Google Submits European Antitrust Proposal, Leibowitz Resigns From FTC

Google has submitted its settlement proposal to the European Union Competition Commission, Commissioner Joaquin Almunia told reporters. The details of the proposal have yet to be made public, so it...
Google Submits European Antitrust Proposal, Leibowitz Resigns From FTC
Written by Chris Crum
  • Google has submitted its settlement proposal to the European Union Competition Commission, Commissioner Joaquin Almunia told reporters. The details of the proposal have yet to be made public, so it’s hard to speculate on what this might mean for Google in Europe going forward. We should, however, find out soon enough.

    As you may know, Google has already settled its antitrust issues in the U.S., at least for the time being. The FTC ended its probe last month.

    Bloomberg reports:

    Google sent a “detailed proposal,” said Antoine Colombani, a spokesman for Almunia. He said he couldn’t anticipate if the offer was sufficient to allay antitrust concerns or whether it would be sent to rivals and customers for comments. If this market test is successful, the EU can make the commitments legally binding. Such a settlement would avoid possible fines against the Mountain View, California-based company.

    It will be interesting to see what the rivals make of it. These rivals were not all that pleased with the FTC settlement, saying that it did not go far enough. FairSearch, whose 17 members in the U.S., Europe and South America include Expedia, KAYAK, Microsoft, Nokia, Oracle, and represent the largest group of formal complainants to the EC, has already released a statement ahead of its analysis. You can read the whole thing at the end of this article.

    Meanwhile, Jon Leibowitz, the FTC Chairman who led the Google probe back in the U.S. has announced his resignation after four years in the role. He will step down on February 15. He’s been a commissioner since 2004.

    “I have been honored to head this extraordinary, bipartisan Commission and to work alongside the best staff in federal government,” he said. “Our small but mighty agency has safeguarded the privacy of Americans and stopped predatory financial practices by companies taking advantage of cash-strapped consumers. Our antitrust enforcement has helped contain health care and drug costs, and helped reduce prices and increase innovation for smartphones, computer chips and other high-tech products.”

    Google is mentioned several times throughout his lengthy resignation announcement:

    Most recently, the Commission announced a landmark agreement with Google to ensure consumers would continue to be able to buy a variety of high-tech devices from smartphones to games to tablets. The settlement gives competitors access to standard-essential patents, and ensures that companies that advertise on Google’s website will have more flexibility to use rival search engines.

    During the last few years, Leibowitz has worked to raise the profile of privacy practices through law enforcement, consumer education and policy initiatives. FTC settlement orders against Google and Facebook let the companies move on and innovate for consumers while requiring comprehensive privacy programs and affirmative choice for material privacy changes, and prohibiting privacy misrepresentations.

    The FTC also took steps to rein in the alleged misuse of standard-essential patents, which can lead to patent hold-up and ultimately higher prices for popular devices such as smart phones, laptop and tablet computers, and gaming consoles. The Commission made the case publicly – and through law enforcement actions such as the Google consent decree – that companies should be restricted from seeking injunctions on standard-essential patents if they are bound by prior commitments to license their standard-essential patents on fair, reasonable, and non-discriminatory terms.

    Some critics of the FTC/Google settlement indicated that they felt Leibowitz had rushed through the Google Probe and the decision, as to get it done before Leibowitz’s imminent resignation.

    Here’s the statement FairSearch emailed us about Google’s settlement proposal in Europe:

    What to look for in Google’s offer to the European Commission

    European Commission Vice President Joaquín Almunia said only weeks ago that the key to Google’s abuse of dominance is that the search giant, with more than 90 percent market share, is diverting traffic in the way that it presents its own services.

    “They are monetizing 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,” Commissioner Almunia told the Financial Times on 10 January 2013 (click here for article<>).

    Google’s biased display of results in favour of its own products was also the first of four concerns Commissioner Almunia listed publicly on 21 May 2012 (click here for full statement<>). We are optimistic that Commissioner Almunia will make sure that Google’s proposal meets the test he set of truly restoring competition to the marketplace.

    A settlement will achieve Almunia’s goal of restoring competition to Internet search and related markets if it delivers positive answers to the following questions:

    *   Does Google apply the same rules to its own services as it does to others when it returns and displays search results?
    *   Does Google always provide the user with the most relevant results at the top of the search page, even if those come from non-Google sites?
    *   Is Google prevented from blacklisting competing companies or categories of companies from appearing in the top search results (for example, online travel agencies or metasearch sites)?
    *   Is Google prevented from using the quality scores and minimum bids it assigns to each website as a pricing mechanism to exclude competitors from appearing in the top display of search results?

    The deal should also include a fast-track dispute resolution mechanism administered by a third-party monitor, to ensure that the settlement ends Google’s search bias and other practices identified by Commissioner Almunia as potential abuses of dominance.

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