Get 40% Off

Exclusive - Google offers to treat rivals equally via auction: sources

Published 18/09/2017, 16:45
Updated 18/09/2017, 16:45
© Reuters. The Google app logo is seen on a smartphone in this illustration

© Reuters. The Google app logo is seen on a smartphone in this illustration

By Foo Yun Chee

BRUSSELS (Reuters) - Google (O:GOOGL) has offered to display rival comparison shopping sites via an auction, as it aims to stave off further EU antitrust fines, four people familiar with the matter said.

Google is under pressure to come up with a big initiative to level the playing field in comparison shopping, but its proposal was roundly criticised by competitors as inadequate, the sources said.

EU enforcers see the antitrust case as a benchmark for investigations into other areas dominated by the U.S. search giant such as travel and online mapping.

Google has already been fined a record 2.4 billion euros ($2.9 bln) by the European Commission for favouring its own service, and could face millions of euros in fresh fines if it fails to treat rivals and its own service equally.

In its proposal submitted to the European Commission on Aug. 29, the company said it would allow competitors to bid for any spot in its shopping section known as Product Listing Ads, the sources said.

Since then, Google, whose parent is Alphabet Inc, has sought feedback from four to five competitors, which was overwhelmingly negative, the sources said.

The adverse reaction could undermine the U.S. company's efforts to win over EU antitrust regulators.

Three years ago, the world's most popular internet search engine made a similar offer in an attempt to settle a long-running investigation by the Commission and stave off a fine. That was ultimately rejected following criticism from rivals and discord within the EU executive.

Under that proposal, Google would reserve the first two places for its own ads. The new offer would also see Google set a floor price with its own bids minus operating costs.

The offer does not address the issues set out by EU competition regulators, the sources said.

"This is worse than the commitments," one of the people said, declining to be named because of the sensitivity of the matter.

The European Commission said the onus was on Google to comply with its cease and desist order.

"It is Google's sole responsibility to ensure compliance with the Commission antitrust decision, and it is for Google to explain how it intends to do so," spokesman Ricardo Cardoso said.

Google did not respond to a request for comment.

UK price comparison site Foundem, whose complaint triggered the EU investigation in 2010, dismissed the auction proposal.

"Unless Google is volunteering to break up its general-and specialised-search businesses, the inclusion of Google's comparison shopping competitors into a new or existing pay-for-placement auction would simply create an additional anti-competitive barrier," the company said.

© Reuters. The Google app logo is seen on a smartphone in this illustration

Google has until Sept. 28 to stop its anti-competitive practices or its parent company Alphabet could be fined up to 5 percent of its average daily worldwide turnover or around $12 million a day, based on Alphabet's 2016 turnover of $90.3 billion.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.