Google to Label Search Results Under Reported Settlement with European Commission

Google has reportedly reached an agreement with the European Commission to change its search practices after a two-year investigation on whether the search engine giant favors its own properties in the search results.

Unnamed sources told the New York Times that the European Union’s executive body has accepted Google’s proposed settlement to label content as coming from Google products such as Google Plus Local and Google News rather than changing its algorithm.

According to the article, Google faces up to a 10-percent penalty of global annual sales if the company does not follow the terms of the agreement, which is legally binding for five years and will be enforced by a third party.

Google’s settlement would impact direct competitors like Microsoft as well as specialized search engines, called vertical search services, like TripAdvisor, Yelp, and the British comparison-shopping site Foundem. In Europe, Google commands 86 percent of the online search market, according to comScore.

Microsoft is part of Fairsearch.org, an organization comprised of 17 companies in the U.S., Europe, and South America that has formally complained to the EC about Google’s search practices. Other companies in the group include Expedia, KAYAK, Nokia, and Oracle.

“Google should subject its own products and services to the same policy it uses for others,” said Thomas Vinje, counsel and spokesman for Fairsearch Europe in response to the reported agreement. ”We share Commissioner Almunia’s concern that Google displays links to its own vertical search services differently than it does for links to competitors. This results in preferential treatment for Google in comparison to competing services, and this harms competition and consumers. And as Mr. Almunia said last year, the Internet is global and any remedy for Google’s anti-competitive conduct should be a global one. We will comment on remedies after the Commission shares them.”

European Commission vice president Joaquín Almunia had outlined his concerns about Google’s practices in a letter to Google executive chairman Eric Schmidt in May 2012. “If Google comes up with an outline of remedies which are capable of addressing our concerns, I will instruct my staff to initiate the discussions in order to finalise a remedies package,” he wrote.

Google submitted its proposed settlement to the EC earlier this year, which has since been under review.

Image by Picsfive.

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