Google Amends Proposal to Settle EU Antitrust Investigation

BRUSSELS— Google Inc. GOOG -0.02%Google Inc. Cl AU.S.: Nasdaq $1015.00 -0.20-0.02% Oct. 28, 2013 4:00 pm Volume (Delayed 15m) : 1.10MU.S.: Nasdaq $1015.70 +0.70+0.07% Oct. 28, 2013 7:29 pm Volume (Delayed 15m): 65,259 P/E Ratio 28.74Market Cap $340.91 Billion Dividend Yield N/ARev. per Employee $1,060,12010/28/13 Google, Microsoft Threaten End...10/28/13 Google Amends Proposal to Sett...10/28/13 The Morning Download: Obamacar...More quote details and news » offered new proposals to address European Union concerns that the company unfairly uses its search engine to promote its own services, particularly for shopping and local searches.

Google proposed displaying three sets of results from rival search engines in a box under the U.S.-based company's own shopping results. The rivals still would have to pay through an auction mechanism to be featured, as proposed earlier, but the minimum price for search terms was cut to three European cents from 10 European cents (to four U.S. cents from 14 U.S. cents).

Google also changed its earlier proposal so that search terms can be more precisely defined. An online shopping service will be able, for example, to say it wants to come up in searches for a specific brand of tennis racket, rather than just "sports equipment."

"The aim of the commitment is to show rivals have visibility on screen," a senior EU official said Monday. "It's not for us to mandate the final outcome" of what users click on.

The bloc gave Google's rivals and others four weeks to review the proposals.

If the EU accepts Google's proposals, they will be binding on the company for five years. A trustee would be appointed to monitor compliance.The binding offer marks a new step for a company that earlier this year was able to exit a similar investigation by the U.S. Federal Trade Commission after making only voluntary commitments.

If the European Commission, the EU's executive arm, doesn't accept Google's proposals, it can ask for further changes or begin formal legal antitrust proceedings. An antitrust case can be lengthy and expensive, as the EU's case against Microsoft Corp. MSFT -0.45%Microsoft Corp.U.S.: Nasdaq $35.57 -0.16-0.45% Oct. 28, 2013 4:00 pm Volume (Delayed 15m) : 37.55MU.S.: Nasdaq $35.60 +0.03+0.08% Oct. 28, 2013 7:21 pm Volume (Delayed 15m): 806,310 P/E Ratio 13.17Market Cap $298.27 Billion Dividend Yield 3.15% Rev. per Employee $810,20210/28/13 Google, Microsoft Threaten End...10/25/13 Microsoft Surface Sales Perk U...10/25/13 Tech Trifecta: Amazon, Microso...More quote details and news » last decade showed.

The commission sent a request for information to 125 companies, including all the complainants and rivals who responded to earlier Google proposals. "We're seeking targeted feedback on specific points," the EU official said.

In another tweak to the previous proposals, which were slammed as inadequate by Google's rivals, the changes would apply to search terms entered anywhere. Instead of just applying to the search box on the Google home page, the proposals would affect searches in a browser's toolbar, address bar and even by voice.

"We've made significant changes to address the [European Commission]'s concerns, greatly increasing the visibility of rival services and addressing other specific issues," Google said. "Unfortunately, our competitors seem less interested in resolving things than in entangling us in a never-ending dispute." Google's shares fell 20 cents to close at $1,015 Monday on the Nasdaq Stock market.

It remained unclear whether giving away valuable real estate close to where it sells advertising would hurt Google's search business.

The changes would apply to Google's various European sites, but not—although fewer than 5% of queries in Europe are made with the U.S. site, EU officials said.

The offer also addresses Google copying content from other websites to use on its own, a process known as "scraping." One example is user reviews of restaurants or hotels that pop up on Google maps. Before, companies could avoid that only by opting out of Google search results completely. Now, officials said, a nonretaliation clause has been strengthened for companies who do opt out.

EU Competition Commissioner Joaquín Almunia this month said he hoped to reach a decision next spring on a settlement to its investigation, which started nearly three years ago.

Some complainants said the proposals are insufficient.

"Google still doesn't appear to have offered anything that will prevent it from systematically preferencing its own services and manipulating results, a clear failure of the initial offer," said David Wood, who represents iComp, a group of rivalsthat includes Microsoft. "What is needed is a principle-based, forward-looking approach, including a clear commitment not to discriminate against its rivals."

Thomas Vinje, a lawyer for FairSearch Europe, which represents several complainants, said "no genuinely significant changes have been made to the initial proposal."

 By Frances Robinson

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