Microsoft wades into the Google antitrust fray as publishers call for EC to reject deal

Opponents to Google's EU search proposal have stepped up calls to reject the deal as the EC's competition chief prepares to step down.
Written by Liam Tung, Contributing Writer

Microsoft and European publishers have made a last ditch effort to derail a proposed European Commission antitrust settlement with Google before the EC's current competition commissioner steps down this October.

Google submitted its third set of proposed remedies to the EC in February, intended to appease the regulator's worries that the search company is unfairly exploiting its dominance of the search market, particularly around specialised search services such as shopping or travel. If approved by the EC's competition commission, the proposals could put an end to Europe's four-year investigation into Google's search practices, which carries a theoretical maximum penalty of $5bn fine and tough restraints on how it conducts its business within the EU.

While Europe's competition boss Joaquín Almunia indicated the proposals would suffice for a deal, smaller vertical search companies and European publishers have objected to the suggested settlement, saying it will do nothing to stop Google giving its preferential treatment to its own properties.

While Microsoft hasn't said much publicly on the proposals, yesterday Reuters reported that its director of competition law Jean-Yves Art expressed concern that Google contractually made it difficult for advertisers to switch to competitors.

"The proposals don't cure or eliminate all restrictions that we and rivals see. There are still restrictions preventing them from providing interoperability," he quoted Art as saying.

One of the most contested proposals in the settlement is Google's offer to display links to three rivals' vertical search products in a manner comparable to the way it displays its own.

Complaints include that the planned auction system that would be used to allocate rivals a spot in the non-Google box resembles a protection racket, in the words of one publisher. Another is that the space Google offered for rivals on its search page is lower value real-estate than the space reserved for Google's services.

In a document Microsoft has handed out to media, the company details a study to prove this point. Over three weeks in April, Microsoft tweaked Bing to reflect what Google's search page would like under the settlement for vertical search categories, including hotel, local, and shopping searches. Under the proposal, Google's "specialised search results" for each vertical would appear above or adjacent to the rival box.

Looking at Local, Microsoft found that despite the prominence of rival links, users were 99 times more likely to click on links in Google's specialised search results.

It also conducted an experiment with around 10,000 participants in the UK where they were shown a modified Google UK search page based on pages that display results for Google's Hotels and Shopping boxes.

Microsoft's Google UK rival link experiment
Microsoft's Google UK rival link experiment. Image: Microsoft

Microsoft reversed the placement of rival and Google's boxes, and found that traffic to Google's verticals declined by 74 times for hotel searchers and 10 times for shopping searches. And, as an aside to relevance, Microsoft points out that rivals achieved a higher click rate than Google achieved in the same position.

Yesterday, president of the Federation of German Newspaper Publishers (BDZV) Helmut Heinen warned that the proposal in its current form would "effectively legalise Google's abusive self-preference". 

His comments come as part of a joint effort by publishers to encourage the EC to reject the proposed settlement. On Thursday, the European Magazine Media Association said "the proposed deal would clearly fail to remedy the serious competition concerns identified by the Commission".

"Closing the pending Google investigation on the basis of this proposal would not even remedy the four competition concerns identified by the Commission, let alone address the urgent competition concerns raised in the various complaints," it added.

A Google spokesman said: We've co-operated fully with the European Commission's investigation over the last four years. Our proposal addresses all of the EC's concerns, and greatly increases the visibility of rival services."

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