The European Commission today announced a search deal with Google whereby the search giant will feature links to rival services in its results, as well as make it easier for advertisers and publishers to work with competing firms.
The agreement brings to a close a battle that has been going on since late 2010, when the commission opened an antitrust investigation into Google over allegations that the company had abused its dominant position in online search.
"We will be making significant changes to the way Google operates in Europe. We have been working with the European Commission to address issues they raised and look forward to resolving this matter," Kent Walker, Google's senior vice president and general counsel, said in a statement.
Joaquín Almunia, commission vice president in charge of competition policy, acknowledged today that negotiations with Google were "long and difficult," but said that the agreed-upon deal "can now address the commission's concerns."
"Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative," Almunia continued. "This way, both Google and its rivals will be able and encouraged to innovate and improve their offerings. Turning this proposal into a legally binding obligation for Google would ensure that competitive conditions are both restored quickly and maintained over the next years."
The deal means Google can avoid major fines and a prolonged investigation. But the EU reserves the right to fine the search giant up to 10 percent of its annual worldwide turnover should it violate the terms of the agreement. An independent monitoring trustee will oversee the deal for at least five years.
What's included in the deal? Specifically, Google will display links to rival services next to those of paid advertisers. An example screen shot released by the EU shows a search for "gas grill." Typically, users would see a list of possible gas grills they could buy atop their search results via Google Shopping. Going forward, those results will be accompanied by shopping options from services that do not participate in Google Shopping, labeled "Alternatives" (click above for larger image).
In addition, the deal also means:
- Google will give content providers an extensive opt-out from the use of their content in Google's specialized search services if they so wish, without being penalized by Google (something Yelp complained about in the U.S).
- Google will remove exclusivity requirements in its agreements with publishers for the provision of search advertisements.
- Google will remove restrictions on the ability for search advertising campaigns to be run on competing search advertising platforms.
U.S. officials conducted a similar investigation into Google's search business starting in June 2011. Last year, the Federal Trade Commission (FTC) found that Google did not unfairly manipulate its search results to highlight its own products and demote competing firms. But like the EU deal, Google did agree to stop certain practices that unfairly burden its rivals.
The bulk of the FTC agreement concerned the licensing of Motorola Mobility's standard-essential patents on a fair and reasonable basis, but Google is in the process of selling Motorola Mobility to Lenovo, so that will soon no longer be an issue for the search giant.