Google's promises to EU not good enough for US consumer group

Google's rivals in the EU have not ruled out legal action against competition authorities

A A U.S. consumer group on Monday added its voice to the growing criticism of Google's proposed settlement with the European Union's competition authorities.

"We had been impressed with the strong position the Commission had taken in your investigation, unlike regulatory authorities in the United States," wrote John Simpson, Consumer Watchdog's Privacy Project director in a letter to the Commission on Monday. "We cannot understand what prompted this recent change in attitude."

Last Wednesday E.U. Competition Commissioner Joaquin Almunia said that he was satisfied with Google's proposals to give comparable display to specialized search services that rival its own. He added that while he would analyze responses from the 18 complainants, he didn't believe he would change his mind.

Google has been under investigation by the European Commission since November 2010 after competitors accused it of directing users to its own services by reducing the visibility of competing websites and services in search results.

According to Almunia, Google's new commitment improves on the previous offer the company had made to the Commission, particularly in the area of vertical search. Images associated with rival links will be larger and more prominent. The option to 'hide' or switch off rival links has also been removed.

With Google's previous two sets of proposals, Almunia referred them to a so-called 'market test' allowing competitors, complainants and other stakeholders the opportunity to test the proposals. However that will not happen on this occasion.

"Frankly, given the results of the two earlier market tests, we cannot understand how the third proposal could be deemed anything other than a substantial change from the earlier woefully insufficient remedies proffered by Google if it is acceptable. In other words for the third proposal to be remotely viable, it must be a substantial change from the earlier iterations. A If it is such a significant change, then -- by your own procedures -- you must market test it," said Simpson in his letter.

Almunia had argued that a market test was not required since "the structure of the proposals remains the same" and it is only the content that has changed.

Following last week's announcement of the settlement, many rivals including Allegro Group, Fairsearch and ICOMP said they were very disappointed that there would be no market review as with the two previous sets of proposals and that they would not rule out taking the matter further.

Vincent Brophy, a partner at law firm Jones Day, said that the court to hear  such a case would be the European Court of Justice in Luxembourg, but that the  procedure could take years.

"It's too early to say whether we will pursue that route, but we have had detailed discussions about it," said A Michael Weber, Director of Hot Map, one of the original complainants in the case. "We don't yet know the grounds on which we could appeal, but of course we will be looking at it closely. We would also look at possible challenges on procedural grounds, but again at this stage it's too soon to say."

The settlement must be approved by the College of Commissioners for it to become legally binding.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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