EC details Google's proposed search concessions

Google's proposal for resolving a European investigation into anticompetitive practices in search includes labeling its own services in search results, showing services from rivals nearby, and letting specialized search services block Google from using their content.

The European Commission on Thursday published Google's proposed resolution for the long-running case and issued a request for feedback. (For the full proposal in detail, see below.)

That feedback now includes criticisms from rivals that say Google has unfairly squeezed them off the Web, promoting its own services even when they wouldn't merit top placement when judged on the basis of relevance. The EC investigation has focused on whether Google has used its dominance in search to promote its own services such as comparison shopping, maps, and travel services at the expense of those in those businesses who previously got a lot of their business through Google search results.

Specialized search, also called vertical search, is a key area of concern and the first that the EC sought to address. It's important because it's not only a core business to rivals such as Kayak or Yelp, but also an area where Google is rapidly, dramatically changing its own search in an attempt to get users the information they need.

Under Google's proposal, the company would label its own services in specialized search results and mark them off as a separate region. And it would clearly show links to at least three rival services as well.

Objections arrive
Thomas Vinje, counsel and spokesman for FairSearch Europe, a coalition of critics including Microsoft, TripAdvisor, Foundem, Oracle, Nokia, and others, requested more time to evaluate Google's proposal.

"Google has taken a year to develop the proposal released today. We think it's only fair that outside experts have more than a month to help the Commission 'market test' the long-lasting effects of Google's proposal on consumers and innovation," Vinje said in a statement today.

Monique Goyens, director general of another opposition group called the European Consumer Organisation, also objected.

Labelling results will do little or indeed nothing to prevent Google from manipulating search results and discriminating against competing services. It may even shepherd consumers towards clicking on Google services now highlighted in a frame. Labelling should not be the sole solution. Infringements of competition rules call for strong and rigorous structural remedies where needed...

The proposal to display links to three rival specialized services raises the natural question of who decides the promotional criteria. If that is Google, it leaves too much discretion in their lap while, most importantly, not solving the problem of non-discriminatory choices for consumers.

Google's proposal also offers to let newspaper publishers mark specific articles as suitable for inclusion in Google News rather than using an all-or-nothing approach with publishers. On a separate matter, Google agrees not to index or otherwise use information published by specialized search sites. And it would assure that advertisers could manage ad campaigns more easily that spanned Google and other search-ad providers.

The EC regulators detailed their position on vertical search this way:

Google prominently displays links to its own specialised search services within its Web search results and does not inform users of this favourable treatment. Due to the favourable treatment of Google's own services, consumers are more likely to not make use of potentially more relevant competing services....

The Commission is concerned that this practice unduly diverts traffic away from Google's competitors in specialized search towards Google's own specialized search services. It therefore reduces the ability of consumers to find a potentially more relevant choice of specialized search services. Since Google is an important source of traffic for competing specialized search services, this may reduce competitors' incentives to innovate in specialized search.

Vertical search often happens to be very tightly linked to money-making possibilities, which is why rival businesses are critical of Google's behavior. The EC investigation, which began formally in November 2010, includes Google Shopping, Google Places, Google Hotel Finder, Google News, Google Finance, Google Flights, and Google Maps involving local search results.

Critics had hoped for a full-blown investigation and legal case against Google, a process that could have taken years more, but the EC appears to prefer what it views as a swifter settlement that's better suited to making some changes in the fast-moving world of the computing industry. It's used the approach in the past, turning settlements into legally binding agreements in cases against Microsoft in 2009 in a case involving browser choice, IBM in 2011 in a case involving mainframe services, and Apple in 2012 in a case involving e-book publishing.

Google has faced regulatory concerns before over acquisitions and some other issues, but the antitrust and anticompetitiveness cases in the European Union and the United States threatened the core of Google's business. The company has been working for years to move from search results that show an unornamented list of hyperlinks to results that answer people's questions directly or that present detailed information such as maps with stores or products with prices. And with Google Now, it's begun trying to anticipate what people want to know even before they search for it.

The U.S. Federal Trade Commission also opted for a quicker settlement rather than a full-blown antitrust lawsuit. The FTC's settlement let Google off lightly.

Google's proposal in detail
According to the EC, Google proposed to take the following measures for five years in the European Economic Area, which includes the European Union along with Iceland, Liechtenstein, and Norway:

1. • label promoted links to its own specialized search services so that users can distinguish them from natural web search results,

• clearly separate these promoted links from other web search results by clear graphical features (such as a frame), and

• display links to three rival specialized search services close to its own services, in a place that is clearly visible to users,

• offer all specialized search Web sites that focus on product search or local search the option to mark certain categories of information in such a way that such information is not indexed or used by Google,

• provide newspaper publishers with a mechanism allowing them to control on a Web page per Web page basis the display of their content in Google News,