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28th Aug 2016

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Google to avoid record anti-trust fine as it closes on EU deal

Search-engine Google is set to avoid fines worth up to $4 billion after the European Commission's competition boss Joaquin Almunia publicly acknowledged that a deal is close.

Speaking at a press conference on Wednesday (25 July), Commissioner Almunia said that the representatives of the search-engine had offered "sufficient explanations for us to proceed with technical meetings to explore the possibility of a settlement under Article 9."

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  • The EU Commission and Google are on the brink of agreement. (Photo: EUobserver)

Article 9 refers to the so-called "commitment decision" procedure, introduced into European competition law in 2003, which gives the Commission the option to deal with competition cases through formal settlements rather than full infringement proceedings.

Google is anxious to reach a settlement to avoid the costs of a formal court case and possible multi-million euro fine.

Meanwhile, in an interview with Vieuws TV on Tuesday (24 July), Almunia indicated that a deal was close, commenting that "we have reached a good degree of understanding."

However, he added that Google, which is also under investigation in South Korea, India and by the US Federal Trade Commission - all on charges of using anti-competitive practices - could still face further investigation into the company's Android phone and tablet computers.

Both Google and the EU executive have declined to release information on the precise terms of the agreement, but they are understood to include concessions on how Google runs its search results on desktop and mobile services.

After a two year investigation into Google's practices, Almunia had given the firm a July deadline to propose reforms to its business practices to avoid full disciplinary sanctions for abusing its 95 percent market share in Europe.

In a letter sent to the Commission earlier this month, Google addressed the four areas of concern raised by Almunia. These included claims that Google used its position to promote its own products; applied restrictions on other firms wishing to advertise and copied material from rival sites without permission.

Responding to the news, David Wood, the counsel for ICOMP, a software industry lobby group whose supporters include Microsoft, welcomed Google's acceptance of the Commission's terms as "an important step towards ensuring a diverse and open Internet."

Under EU competition rules, sanctions could include a potential fine of up to 10 percent of Google’s annual turnover of just under €40 billion, comfortably higher than the largest existing EU anti-trust fine, the €1.6 billion fine levied on rival software giant Microsoft.

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