Google submits search changes to EU antitrust regulators

The confidential offer will be the first indication of whether Google intends to make peace or fight.

Google informed the European Commission on Tuesday of proposed changes to how it shows some of its search results in Europe, marking the beginning of the search giant’s formal response to a €2.4 billion antitrust fine.

The proposal comes amid speculation over whether Google will try to defuse tensions with EU regulators or pick a fight.

Any changes would take effect by September 28, but the Commission could hit Google with daily fines of up to €12 million starting on that date if it believes the search engine, which computes roughly 90 percent of searches in Europe, is not complying with its June decision on Google Shopping. Regulators advertised for experts to help monitor compliance.

The Commission and Google’s rivals will watch closely to see how wide-reaching the company’s draft solution could be. The proposals are expected to go further to incorporate rivals into Google Shopping than a 2014 settlement offer that the Commission rejected. The search giant’s competitors are also hoping the solution could be extended to other contentious services, such as Google Travel or Google Maps.

A spokesperson for the Commission confirmed Tuesday evening it had “received information from Google on how the company intends to ensure compliance with the Commission decision by the set deadline.” He declined to provide details on the content of the offer. A spokesperson for Google confirmed the company would submit its proposed solutions Tuesday, but declined to comment further.

The negotiations over the antitrust remedy will take place as EU competition enforcers continue to closely scrutinize other aspects of Google’s business model. They are working on two separate and well-advanced cases, targeting Google’s Android operating system for mobiles and AdSense for Search advertising business, and must decide whether to pursue additional complaints against Google Flights, local search and Google News, among others.

The company, which denies wrongdoing, will be eager to avoid the sort of drawn-out battle and fines that dogged Microsoft for the best part of a decade, but has made clear it disagrees with the Commission’s decision.

The company has yet to confirm whether it will appeal against the Commission’s €2.4 billion fine and remedies, with some Google staff questioning whether such a tactic — previously favored by tech giants Microsoft and Intel — could sour relations with EU policymakers that continue to investigate Google’s other businesses.

Margrethe Vestager, the European commissioner for competition, hit Google with the fine in June for breaching EU competition rules by placing its own Google Shopping service — a price comparison website that morphed over time into an ad aggregator — at the top of its search results while demoting smaller rivals down the ranking. It ordered the U.S. tech giant to ensure “equal treatment” between Google Shopping and rival comparison shopping services.

The company has another two weeks or so to lodge an appeal.

“Ideally I would like to see a remedy that does not just work for Shopping but also for other [specialized search services],” said Thomas Höppner, a lawyer at Hausfeld who represents two associations of German publishers and the Open Internet Project, an association of European companies against Google, plus Visual-Meta, a comparison search engine owned by Axel Springer. (Axel Springer is the co-owner of POLITICO’s European edition.)

“My personal feeling is they will try to upgrade what they suggested to Almunia,” Höppner said.

Google brokered settlements with Joaquín Almunia, the previous European commissioner for competition, on three separate occasions, only to see each one rejected amid negative feedback from market players and political pressure from outside and within the Commission.

In the last remedy offer, which the Commission made public in February 2014, Google said it would include products, together with prices and a photo, from rival comparison websites in the Google Shopping box that appears at the top of certain searches. One objection raised at the time was that Google planned to hold auctions to determine who would be included, ensuring it continued to monetize the box.

A screenshot of the changes Google offered to make to Google Shopping back in 2014, as part of its failed settlement bid

Certain Google rivals have suggested the firm could drop its specialized search boxes, including Google Shopping, giving greater prominence to its standard search results — on the condition Google stop pushing rival services down the ranking.

Foundem, a price comparison website, which complained in 2010 that it had dropped off Google’s first page of search results, said this solution would be “by far the more straightforward to implement.”

But Google may be loath to shut down Google Shopping, which has proved popular with advertisers.

Mark Scott contributed reporting.