Chillin'Competition

Vice-President Almunia has just made it clear that the Commission will accept the third version of Google’s proposed commitments. In his words,  “the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns. Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative. This way, both Google and its rivals will be able and encouraged to innovate and improve their offerings. Turning this proposal into a legally binding obligation for Google would ensure that competitive conditions are both restored quickly and maintained over the next years.”

The Commission’s press release is available here.

What happens now is that the Commission will send complainants a letter (pursuant to Article 7(1) of Regulation 773/2004 informing them that the Commission has obtained what it considers adequate commitments and that in its view there are no longer grounds to pursue the case. They will then have a chance to complain again. The Commission will then adopt a number of decisions: one under Art. 9 of Regulation 1/2003 in order to make those commitments binding, and a number of decisions rejecting all complaints received. I suppose that Google’s very active and well funded rivals will want to appeal those decisions before the General Court (with, I believe, arguable chances of success after the Court’s recent ruling in Microsoft/Skype, which was extremely favorable to Google for reasons that I might explain in a later post). This is, by the way, the outcome we always predicted.

In my personal opinion, this is a wise move on the part of the European Commission. However, it’s unlikely that the Institution will receive much praise: some will say that it demanded too much from Google (particularly given the US precedent), many others will say it’s been too lenient, some will say the investigation took too long, others will claim that it was incomplete. The fact that they will be criticized from both sides may actually suggest that perhaps the Commission has done something right.

As you know, I was never a big fan of the case (see here, here or here among others), but I always saw the proposed commitments (even in their first version) as a balanced attempt at putting and end to it getting the Commission what it wanted without introding too much in Google’s innovative business model. For my analysis of those commitments (as forecasted, despite some improvements the essence doesn’t appear to have varied since then) see here and here.

It will be interesting to discuss this development in the course of the upcoming AIJA conference on antitrust and technology in Bruges this weekend.