Google faces July deadline over antitrust probe

Google must come up with proposals to address its dominance of the web search market by early next month or face regulatory intervention, the European Commission has said.

Competition Commissioner Joaquin Almunia said the web giant must start to negotiate on remedies to protect competition or face potentially heavy fines.

“By early July, I expect to receive from Google concrete signs of their willingness to explore this route,” he told a conference in Switzerland.

The deadline will bring the first stage of the European antitrust authorities investigation to a close. If Google does not negotiate, regulators will issue a formal “statement of objections” in response to complaints by more than a dozen rivals that it abuses its dominant position in general web to promote its own secondary services such as price comparison.

“In case we engage in negotiations to address our concerns and the proposals we receive turn out to be unsatisfactory, formal proceedings will continue through the adoption of a statement of objections,” said Mr Almunia.

After the statement of objections, the Commission could impose fines of up to 10 per cent of Google global revenues, which were $37.9bn in 2011.

“[But] I strongly believe that users and competitors would greatly benefit from a quick resolution of the case,” the Commissioner added.

Recent signals from Google have suggested it is in no mood to back down. At the firm’s Big Tent conference in Hertfordshire last month, executive chairman Eric Schmidt sounded a defiant tone.

“He [Mr Almunia] is encouraging us to have a conversation [and] we completely agree" he said.

“We disagree that we are in violation. Until they are precise about what areas of the law we have violated, it will be very difficult for me to speculate.”

The European Commission’s investigation was opened in November in response to a series of complaints from smaller web firms, including the British price comparison service Foundem, which said Google had relegated it in general results.

It has called for Google to be forced to adopt “search neutrality”, meaning it would not be allowed to promote its own services in general search results.

“In the traditional bricks-and-mortar world, Google’s anti-competitive practices would be obvious to all,” said Foundem’s founders, Adam and Shivaun Raff.

“The unique role that search plays in steering traffic and revenues through the global digital economy means that Google is not just a monopoly; it is probably the most powerful monopoly in history.”

According to Experian Hitwise, Google firm handles more than 90 per cent of British web searches, and is similarly dominant across the continent. The denies that it abuses its position, however, and argues that people are free to switch to different services at any time online.