Google Reaches Deal to Avoid Massive Six Billion Dollar European Fine


Google has settled antitrust complaints with the European Union, avoiding the threat of a six billion dollar fine. It means some significant changes to how Google operates its search and advertising business.

The case involved the same legal question that Google has faced around the world: while dominating a market is legal, and being biased towards your own products and services is legal, at what point does the combination of the two pose an unfair competitive advantage?

The European Commission looked at four specific allegations:

1) That Google rigs its algorithms to promote its own sites in the results for certain retail and travel searches, even if they wouldn’t normally rank so highly under its objective criteria.

2) That Google “scrapes” reviews from other sites to include in its own results.

3) That Google unfairly locks in websites that display Google ads, stopping them also displaying ads from rivals.

4) That Google makes it too difficult to take the data from campaigns created for Google AdWords to use with other advertising services.

The latter three issues had already been solved: Google will allow websites to opt out from being scraped, will allow sites to carry ads from multiple platforms, and will let users copy their ad data.

It’s the algorithm issue that caused hold-ups with previous attempts to reach a settlement. It led to brinkmanship with Google appearing to be on the verge of walking away and leaving the European Commission to exercise its legal powers. That would have provoked a major court case that could have run for years and would have been a high-stakes gamble for both sides: if the court found for Google, it wouldn’t have to make any changes, but if the court found against Google, it faced a maximum fine of 10 percent of its annual revenue.

That’s been avoided with Google reaching a threefold solution that’s satisfied European officials:

* There’ll be a clearer label to show that particular results are from Google-owned or related sites.

* These results will be displayed in a different fashion to, and visually separated from, ordinary search results.

* Whenever Google displays such results, it will also show at least three results from independent specialist search sites under the heading “Alternatives”, showing them with the same graphical style and prominence. (Pictured above.)

As well as shopping and travel searches, the new rules will also affect cases with searches such as “cafes in Paris” where Google normally displays results from Google Maps; it will now also show results from three rival local info sites.

The agreement marks the first time that Google has agreed to change the way it calculates and displays search rankings as a result of regulatory action.

The settlement still needs final approval from the European Commission, but officials there say this is effectively a formality. They won’t be putting the proposals out to public consultation as happened with previous suggested deals, something that’s raised ire among the organizations that made the original complaints.

Once the settlement takes place it will be legally binding for five years, but will not constitute any admission of wrongdoing by Google.

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