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Google’s EU Antitrust Settlement Includes Labeling, Mandatory Competitive Links And Third Party Enforcement

Google’s EU Antitrust Settlement Includes Labeling, Mandatory Competitive Links And Third Party Enforcement

The proposed terms of the Google antitrust settlement in Europe have started to come to light, first through a report in the Financial Times, and this weekend, in articles from the Wall Street Journal and New York Times. As anticipated, the primary “remedy” Google is offering involves labeling its own results to distinguish them from third-party publishers.

Yet, there are some new twists and nuances that have not been discussed or disclosed before. They involve third-party enforcement and presentation of competitive links as alternatives to Google’s own content.

Apparently, the settlement will be binding on Google for five years and will be policed by a third-party (not identified). Google would also be subject to significant fines if it failed to comply with the settlement terms during the five-year period.

Practical examples of the settlement are in both articles focused on Google Local and Google News. In both cases Google-owned content would be clearly labeled as such. This labeling, however, is unlikely to impact consumer behavior or dissuade people from using Google. Indeed, it might do just the opposite.

Yet, Google has also agreed to “prominently show at least three links to rival, non-Google sites that have information relevant to a user’s query,” according to an anonymous source the WSJ quoted. In other words Google would be compelled to display alternative publisher sources of the same information. How these sources will be selected, if separate from Google’s main organic results, remains to be seen. How precisely these competitor links would be displayed was also not revealed.

I’m speculating in saying that perhaps these competitor links would just be a more prominent treatment of the top three non-Google organic results already generated by the company’s algorithm. There’s nothing in the reports that suggests this, but it would be a logical approach from Google’s point of view. Otherwise, the new “top three box” becomes a potential subject of controversy itself.

There’s also apparently a distinction between circumstances where Google sells ads and where it does not. The New York Times explains:

In areas where Google does not make money from search results, like weather or news, the company will label the results as Google-owned properties. In areas where Google sells ads, like local business reviews, it will show links to at least three competitors. In areas in which all search results are paid ads, like shopping, Google will auction links to rivals.

Like the US settlement, Google will also allow sites to opt-out of being included in Google’s vertical results (e.g., Local, News) while still being included without penalty in Google’s main index.

Under the deal, AdSense contracts would also be liberalized to give publishers “a greater ability to place ads from other sources on their pages,” according to the WSJ. The US deal involved more flexibility and freedom in exporting AdWords campaigns to Bing, but didn’t address AdSense contracts.

In addition, unlike the FTC deal, the settlement proposal on the table does not include the Motorola patent portfolio. And there’s nothing being reported about Android, which is the subject of a new European antitrust complaint and potential new EU investigation.

If rivals generally support the settlement proposal, which they may because of the competitive links provision, the EU will formally accept and finalize it. And thus, Google would avoid a fine. It would equally avoid being branded a monopoly.

The settlement would also create a different-looking SERP in Europe vs. the US and the rest of the world. We’ll have to wait to see what that new SERP looks like. Regardless, my guess is that the proposed changes will not have a material impact on user behavior or diminish Google’s usage and market share in Europe.

Postscript: According to Bloomberg, Google critics and competitors are already calling the proposal a “non-starter,” based on the reports that have been leaking. Admittedly, none of them have seen the actual proposals yet. However, they object, in principle, to “labeling” as a resolution of their concerns and complaints about Google.