Google Nears Antitrust Agreement With EU

By CIOinsight  |  Posted 07-25-2012 Print Email
After months of ongoing negotiations, Google is apparently getting close to a settlement deal with the European Union to resolve antitrust issues that would avoid formal charges against the search company, according to a published report.

Google "has agreed to the outlines of a settlement" with the European Union to finally end an ongoing EU investigation into alleged anticompetitive behaviors by the search giant in the European marketplace, according to a report by The Financial Times (FT).

Under the settlement, Google would not be hit with formal antitrust charges by the EU, the report stated.

"In a big test for how Google handles the mounting regulatory scrutiny it is facing worldwide, the company offered to make significant changes to its business" to end the investigation and avoid large fines that could have amounted to almost $4 billion, the FT story reported.

The exact terms of a deal have not yet been announced publicly and the arrangement has not yet been finalized, but the main sticking points that have been raised in recent months--how to include mobile search services and Android--are being addressed, the report said.

Negotiations for a settlement deal have been in the works for more than a month. Last week it was reported that Google's Android technologies would have to be included as part of any agreement for any deal to pass muster with the EU.

"The breakthrough in the settlement negotiations came after Google said it would in principle extend the remedies it had offered to make for PC-based search to cover mobile search services, too," the FT reported. 

In an email reply seeking comment on the potential settlement, a Google spokesperson said: "We continue to work cooperatively with the European Commission."

Charles King, an IT analyst with Pund-IT, said a settlement with the EU, rather than a long-term legal battle, is a smart move for Google.

"From a business-focus perspective, it's much better for companies to reach a compromise than it is to drag this kind of thing out for years and years," King said. "It's a good example of what we saw happen with Microsoft back in the 1990s," when the company endured having an antitrust watchdog on its campus for years. "That could have been something that Google considered" in deciding to reach a deal before things went that far.

In addition, said King, businesses that are pursued in such cases often also become legal targets by other companies that want a piece of the action.

"Over the past couple of years we've seen that certain companies in the technology industry have come to rely more on litigation than technological innovation," he said. "And being the subject of an antitrust investigation from an organization like the EU almost automatically makes a vendor a target for other kinds of litigation."

Earlier in July, Google again updated a list of proposed actions the company would take in response to the EU's antitrust concerns. That list came two weeks after Google submitted an earlier list to the agency that failed to garner the EU's full satisfaction.

Since then, Google has been continuing to try to come up with a concessions package that would be acceptable to both the company and the European Commission, the antitrust agency of the EU. Such a deal would allow Google to potentially avert charges of anti-competitive behavior. Neither side have commented publicly on the process.



 

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