Google Outlines to EU How It Will Change Search Results -- 2nd Update

By Natalia Drozdiak and Sam Schechner Features Dow Jones Newswires

Alphabet Inc.'s Google has sketched out to the European Union's antitrust authority how it plans to implement the regulator's recent order to stop illegally tipping the scales in favor of its own comparison-shopping service, the EU said Tuesday.

Continue Reading Below

The European Commission, which has for roughly seven years been investigating Google for breaching the bloc's antitrust rules in various areas, in June fined Google a record EUR2.42 billion ($2.9 billion) for discriminating against rival comparison-shopping sites in search rankings.

As part of the decision, the EU at the time also ordered Google to overhaul its shopping search results by late September so that the company treats its competitors' offerings and its own shopping service equally. The changes would have to apply for users in all European countries where Google offers its shopping service. Google was due to notify the EU by Tuesday about how it plans to implement the decision.

Google was due to notify the EU by Tuesday about how it plans to implement the decision. Google declined to provide any details of the pending proposal.

"The commission can confirm that, as required by the commission decision, it has received information from Google on how the company intends to ensure compliance with the commission decision by the set deadline," an EU spokeswoman said. The EU didn't provide more details of the proposal and Google earlier declined to do so.

The commission has left it up to Google to decide how to change its service and doesn't have to sign off on the company's plans.

Continue Reading Below

But should the offered remedies fall short, the EU could issue additional penalties of as much as 5% of average daily global revenue for each day the regulator deems Google not to be in compliance with the decision.

Tuesday's proposals aren't the first time Google has attempted to resolve the EU's concerns about how it displays rivals' products in its search results. Since the bloc opened the case in 2010, Google has made at least three separate settlement offers -- only to watch them fall apart because the EU's executive arm ruled them insufficient, often under political pressure from Germany and France.

Google's final binding offer in February 2014, which the EU made public, would have changed results pages that display Google shopping ads to also include shopping results from rival companies. Those results would have appeared in a shaded box next to Google's shopping ads, according to screenshots the EU published at the time to illustrate the proposed settlement.

That settlement extended beyond the shopping case to include Google specialized results for local search, which searches for nearby businesses such as restaurants, and for travel search, which includes flights and hotels.

Neither of those two categories of specialized results would be covered in Google's proposals Tuesday. The EU continues to investigate Google's behavior with these and other specialized results as well as with its Android mobile-operating service and AdSense advertising service.

Behind the scenes, rivals from the German publishing business, but also from American firms such as Yelp Inc., had lobbied heavily for the executive arm to scrap the settlement deal.

The complainants objected that the placement they would receive -- to the right of Google's own results -- wasn't prominent enough. And they also complained Google would make them bid for the space via an auction mechanism, essentially making money from the settlement.

Rivals could again file complaints to the EU if they find Google's remedies in the shopping case to be insufficient. Should the commission find any merit in the complaints, it could then penalize Google for not complying.

Google has to comply with the EU's order to change its behavior regardless of a potential appeal by the company to the bloc's higher courts.

In addition to an appeal, Google could file for an injunction, or so-called interim measures, to pause the order to change its behavior, pending the outcome of the appeal. But the bar for that relief is high, according to legal experts, as Google would have to prove to a judge that implementing the EU's order would cause the company "serious and irreparable harm."

Nicolas Petit, an antitrust professor at the University of Liege, said recently that the EU's past attempts to settle with Google could bolster the company's case in court if it chooses to appeal.

"Settlement discussions are not appropriate for cases which could end with fines," said Mr. Petit, which consequently could have left Google under the expectation there would be no fine in the case.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com and Sam Schechner at sam.schechner@wsj.com

(END) Dow Jones Newswires

August 29, 2017 16:15 ET (20:15 GMT)