EU tougher on Google than US but all regulators are requiring changes

12th January 2013

The EU is talking tough about Google in the belief that it is unfairly directing search engine traffic to its own services.

Talking in an interview on Friday 11th January with FT.com, Joaquin Almunia, the EU trade commissioner said: "We are still investigating but my conviction is that Google is diverting traffic."

This has led some analysts to speculate that Google is at least risking a fine with technology website ZDnet's Zack Whittaker writing: "That's pretty much as black and white as one can get, short of actually saying: "Google, bad! Here's a whopping great big fine."

It is certainly within the EU's powers to fine, but it also clear that the European Commission would much rather come to an accommodation in which Google makes it clear when it is favouring its own content and services for weather, maps or shopping comparison services.

The EU probably won't demand neutrality in terms of searches, which the more outspoken Google opponents such as Fairsearch.org have demanded. Opponents of the opponents say such neutrality is difficult to define let alone enforce.

It doesn't look to be on the cards either side of the Atlantic and would be involve a huge and fundamental intervention into Google's business model.

However Almunia's remarks have also seen the EU described as much tougher than its equivalent in the US with many suggesting Google received a clean bill of health stateside.

What may have concentrated minds in Europe is the fact that Google has around a 90 per cent market share while in the US it is a ‘modest' 67 per cent.

But we wonder whether a lot of the analysis which unfavourably compares the EU's anti-trust zeal with that in the US is entirely fair.

The agreement that Google struck with the US Federal Trade Commission is variously described as a slap on the wrist or a mild reprimand.

Certainly on the central accusation of bias, the chairman of the Federal Trade Commission Jon Leibovitz said: "Although some evidence suggested Google was trying to eliminate competition, Google's primary reason for changing its look and feel or algorithm was to improve search result.

This is certainly a much gentler conclusion and it didn't please Google's competitors notably the clear number two Microsoft's Bing/Yahoo service.

However as this analysis by Computer Weekly outlines, the voluntary aspects to Google's agreement with the FTC could have some pretty far reaching consequences for the tech market.

For example, the FTC required Google to release ad campaign data to advertisers – which they can use with other search engines. That is not small beer but could prove a very significant market development.

Google also agreed to licence many patents, which it now owns due to its takeover of Motorola Mobility, at a reasonable rate and if it is in dispute over that rate, it has agreed not to take out legal injunctions forcing the withdrawal of products from sale.

Both of these measures could have a big impact on how competition plays out in the technology market.

It won't end the globe-spanning disputes featuring Google, Apple, Samsung and usually at one remove Microsoft. But it may mark the beginning of regulators seeking to get a grip on the epidemic of patent court cases.

These are hugely complicated matters and the consequences may be as mysterious as the actions of some of Google's spiders. It also is a long way from globally agreed standards.

But if the EU secures more ‘voluntary' concessions then perhaps inch by inch the market will open up. The consequences could be far-reaching though it is likely Google will remain number one for a very long time to come.

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