EU offers Google last chance in antitrust case

BRUSSELS (Reuters) - The European Union's antitrust chief on Monday ratcheted up the pressure on Google, giving it a matter of weeks to settle an investigation into allegations of anti-competitive behavior and avoid formal charges and a possible fine.

Even if the world's most popular search engine offers concessions to resolve the issue, it will still be under the EU spotlight following fresh complaints over its Android mobile software, the top operating system for Internet-enabled smartphones.

The European Commission launched an investigation into Google in November 2010 after competitors, including Microsoft, accused the company of manipulating search results and promoting its own advertising services while demoting rivals'.

EU Competition Commissioner Joaquin Almunia said regulators were as keen as Google to avoid lengthy proceedings due to rapid developments in the technology industry and that if remedies were offered by Google within the coming weeks, the antitrust investigation could be brought to a close.

"I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always better than lengthy proceedings," Almunia told a news briefing.

"Google has repeatedly expressed to me its willingness to discuss any concerns that the Commission might have without having to engage in adversarial proceedings, this is why today I'm giving Google an opportunity to offer remedies to address concerns that we have identified," he said.

Almunia said he had sent a letter to Eric Schmidt, Google's executive chairman, with a deadline for a response.

"In this letter, I offer Google the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points," he said.

Google said it disagreed with the Commission's conclusions but that it was happy to discuss the issues further. It controls 86 percent of the European search market, according to online data tracking service comScore.

LAST CHANCE FOR GOOGLE TO SETTLE?

Almunia is offering Google a last chance before issuing formal charges, said David Wood, a lawyer for lobbying group ICOMP whose members include Microsoft, British price comparison site Foundem and German online mapping company Hotmaps, all three complainants in the EU case.

"This is effectively the Commission demanding remedies, failing that there will be a statement of objections (EU charge sheet)," he said.

If Google can come up with remedies and the Commission finds the proposals acceptable following a market test, it could then drop the 18-month-long investigation without levying a fine on the company, Almunia said.

There are currently 16 complaints against Google before the Commission, with the latest grievances coming from several online travel agencies such as TripAdvisor, Opodo and eDreams.

The majority of complaints are from small competitors across Europe. U.S. authorities are also investigating Google, which controls more than two-thirds of the global search market.

Almunia said there were other investigations into Google that would continue irrespective of the antitrust issue.

"We continue the investigations on other issues, on other complaints we received recently, for instance all those complaints referring to Android or some complaints referring for instance to the way travel agencies are dealt by the Google search engine," he said.

He declined to provide details on the Android investigation. Android-equipped smartphones compete with Apple's iPhone and other systems.

The Commission can fine companies up to 10 percent of their global turnover for breaching EU rules and has handed down multi-million euro fines to Microsoft and Intel, among others, in the past.

(Reporting by Foo Yun Chee; Editing by Mark Potter)

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