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Friday, March 22, 2013

Executives Press European Antitrust Chief on Google

Executives Press European Antitrust Chief on Google

BERLIN â€" With the European antitrust inquiry into Google’s search engine practices entering a third year, a group of 11 Web companies sent a joint letter to the top antitrust official in Europe on Thursday, asking him to compel Google to change its business practices to ensure that smaller rivals are not unfairly harmed.

Joaquín Almunia, the competition commissioner.

The letter, organized by one of the original complainants in the case, a British online shopping service called Foundem, asked the E.U. competition commissioner, Joaquín Almunia, to take a hard line in ongoing negotiations with Google to produce concessions that would protect small European competitors.

Google, which is used for more than 80 percent of the searches conducted in Europe, could face fines of up to $5 billion or 10 percent of its 2012 revenue if a settlement is not reached.

The commission, which has expressed concerns about Google’s use of algorithmic standards to rank its own services ahead of those of some competitors, is studying Google’s own proposals to avoid litigation.

“We are becoming increasingly concerned that effective and future-proof remedies might not emerge through settlement discussions alone,” said the letter signed by the group. “In addition to materially degrading the user experience and limiting consumer choice, Google’s search manipulation practices lay waste to entire classes of competitors in every sector where Google chooses to deploy them.”

Al Verney, a Google spokesman in Brussels, declined to comment specifically on the letter, saying “We continue to work cooperatively with the European Commission.”

Antoine Colombani, a spokesman for Mr. Almunia, said by e-mail that competition officials were reviewing the proposals from Google. If a settlement were reached, Mr. Colombani said, there would be no legal finding that Google had infringed on E.U. law.

Mr. Almunia, a Spanish jurist, asked Google in December to submit its final proposals to settle the case, which began in February 2010 when complaints were filed in Brussels by Foundem; Ciao, a German price comparison site; and Ejustice.fr, a French legal advice site.

The letter was signed by senior executives at six European online businesses: Foundem, and Streetmap EU, both in Britain; Twenga, a French-based price comparison site; and Visual Meta, Hot Maps Medien, and Euro-Cities, three German online businesses.

Executives at two U.S. Web businesses, Expedia and TripAdvisor, also signed, as well as the directors of three German associations representing the publishers of newspapers, magazines and independent telephone books.

Mr. Almunia has favored negotiated settlements over protracted litigation in his three years as the top antitrust official in Europe. Google has argued that it is impossible to exert monopoly control over the huge online marketplace, and has criticized some of the complainants for belonging to professional groups set up by its archrival, Microsoft.

Microsoft had urged the U.S. Federal Trade Commission to bring a suit against Google over its search engine practices, but the U.S. agency closed its own two-year investigation in January after Google agreed to make voluntary changes to its practices.

Heiko Hanslik, the president of the German Association of Independent Directory Publishers, known by its German acronym VfT, said his members worried that European officials would not take a hard line in their negotiations with Google. The European inquiry focuses on complaints that Google favors its own competing services in the placement of search results.

Mr. Hanslik, whose association represents German publishers of online and print directories and telephone books, said a typically relevant Google search â€" for example, to find a painter in Saarbrücken â€" would not turn up a directory of one of his members until the fourth page in search results on Google. “Google is exploiting its market position here in Europe and many, many online retailers will not be able to survive if this isn’t fixed,” he said.

Mr. Almunia has been cautious about his negotiations with Google. In February 2011, he met with Eric Schmidt, then the chief executive of Google, who asked him to give the search engine a chance to propose its own solutions before Mr. Almunia issued a so-called statement of objections, a legal instrument used by the European Commission to lay out its antitrust case and set the clock running for a response from the company.

Last May, Mr. Almunia asked Google to present suggestions for resolving the conflict. In the autumn, he asked Google for more information and eventually gave the company until the end of January to propose solutions.

Google has provided those suggestions, according to one person with knowledge of the situation who was not authorized to speak publicly. Mr. Almunia and his staff are examining them, but it is unclear whether the E.U. agency is close to reaching a decision on whether to accept the proposals and settle, or proceed with a prosecution.

In their letter, the complainants, including Foundem, made it clear that they would prefer Mr. Almunia to issue a statement of objections, and then, with greater leverage under the threat of fines and legal sanctions, enter negotiations with Google.

“We will respectfully withhold judgment on Google’s proposed commitments until we have seen them, but Google’s past behavior suggests that it is unlikely to volunteer effective, future-proof remedies without being formally charged with infringement,” the group wrote in its letter. “Given this, and the fact that Google has exploited every delay to further entrench, extend, and escalate its anti-competitive activities, we urge the Commission to issue the Statement of Objections.”

Mr. Almunia’s decision will have far-reaching consequences in Europe “because it will set standards for the digital world,” said Christoph Fiedler, the managing director for media policy at the German Federation of Magazine Publishers, known by its German acronym VDZ.

James Kanter in Brussels contributed reporting.

A version of this article appeared in print on March 22, 2013, on page B2 of the New York edition with the headline: In Europe, Antitrust Chief Is Pressed on Google.