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 The agreement means the world's dominant search engine has avoided a
process that could have lead to a fine of up to $5 billion, or 10
percent of its 2012 revenue. It must stick to the deal for the next
five years.
However, Google may still face a second EU investigation, this time
into its Android operating system for smartphones, with potentially
bigger risks for the company.
Google has been the subject of a European Commission investigation
into its internet search practices since November 2010, when more
than a dozen complainants, including Microsoft, accused the company
of promoting its own services at their expense. Its first two
attempts to resolve the case failed.
Competition Commissioner Joaquin Almunia said on Wednesday he would
accept Google's latest concessions without consulting the
complainants, prompting a furious response from critics.
"Without a third-party review, Almunia risks having the wool pulled
over his eyes by Google," said David Wood at lobby group ICOMP that
counts Microsoft and four other complainants among its members.
Microsoft owns rival search engine Bing.
German online mapping services Euro-Cities said it would take its
grievance to the courts.
"Today's announcement still leaves many questions open. We will
continue to take legal action about Google's business practices in
the German and, if necessary, EU courts," its chief executive Hans
Biermann said.
Polish online auction site Allegro was equally critical, saying the
deal would not ensure a level playing field for Europe's Internet
economy.
Reuters reported on January 29 that the EU's competition authority
and Google were close to a deal to resolve the investigation.
ANDROID RISK
Google said on Wednesday it hoped to draw a line under the matter
soon.
"We will be making significant changes to the way Google operates in
Europe," said General Counsel Kent Walker. "We have been working
with the European Commission to address issues they raised and look
forward to resolving this matter."
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Google's success in escaping financial sanctions mirrors a similar
outcome in the United States last year, where the company received
only a mild reprimand from the Federal Trade Commission.
Its ability to resolve competition issues in two major regions
without a fine stands in sharp contrast to rival Microsoft, whose
prickly relations with EU regulators landed it total fines of more
than 2.2 billion euros over the past decade.
Under the settlement, Google, which has a 75 percent share of the
European search market according to consultancy comScore, will let
three rivals display their logos and web links in a prominent box,
and content providers will be able to decide what material Google
can use for its own services.
Google will also scrap restrictions that prevent advertisers from
moving their campaigns to rival platforms such as Yahoo!'s search
tool and Microsoft's Bing. The deal only applies to Europe.
Almunia said he would discuss the next step in Google's Android case
with officials in the next weeks.
Google gives away Android for free. The software, which is available
on three out of four smartphones sold worldwide, essentially helps
the company extend its core search business and boost its usage in
the mobile world.
Lobbying group FairSearch whose members include Microsoft and
Finland's Nokia, has accused Google of using Android to divert
traffic to its search engine.
(Additional reporting by Alexei
Oreskovic in San Francisco; editing by Erica Billingham)
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