Google rival says proposal to avoid an EU antitrust fine make matters worse

Google's proposed settlement of an antitrust investigation will 'entrench, extend, and escalate its abusive practices', according to Foundem

By Jennifer Baker, IDG News Service |  Internet

The leading complainant against Google in a European Union competition case said Friday that the search giant's proposed settlement of the case will "entrench, extend, and escalate its abusive practices."

British company Foundem was the first to lodge a complaint with the European Commission about Google's alleged anti-competitive practices. In a statement Friday Foundem said that Google's revised proposals continue to be part of its "long running strategy to transition organic traffic into paid traffic."

Google has been under investigation by the European Commission since 2010 over allegations that it has abused its dominant market position in various ways, including prioritizing its own services in search results.

In an effort to avoid a fine of up to 10 percent of its annual turnover, Google has  proposed labelling links to its own sites in search results and including links to three rival search engines for specialist search results that generate revenue for Google.

The Commission forwarded these proposals to 125 interested parties along with a questionnaire about their opinion of them in a process the Commission calls market testing. However, the recipients were banned from discussing the documents in public. Google's 94-page proposal included sample screen layouts for the display of search results.

"We were troubled by the Commission's attempt to cloak this second 'market test' in confidentiality, which would have suppressed debate," Foundem said in its statement.

Many of the Commission's questions were irrelevant, Foundem said, adding that there was one important question the Commission failed to ask: Would Google's revised proposals address the Commission's competition concerns?

"If anything, the few alterations make the proposals worse rather than better. For example, the proposal of an AdWords-based bidding process for Paid Rival Links simply increases the efficiency with which Google would extract revenues from its competitors," said Foundem.

Google declined to comment.

Google's latest proposals were leaked last month amid growing anger over the secrecy surrounding the case. If the Commission were to accept the proposals, they would become legally binding.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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