Google offers compromise on European antitrust probe

Google Inc. chairman Eric Schmidt has proposed a series of changes to end his company's possible abuse of its dominant market position in Internet search and advertising, as alleged earlier this year by the European Commissioner for Competition, Joaquin Almunia.

Almunia's spokesman, Antoine Columbani, confirmed receiving a letter from Schmidt on Monday, but did not disclose details.

The commission began investigating Google in 2010, and in May of this year, Almunia warned Google it needed to quickly propose changes to several practices -- including the way it promotes its own offerings in search results -- or face possible fines.

"We have made a proposal to address the four areas the European Commission described as potential concerns," said Al Verney, a Google spokesman in Brussels. "We continue to work co-operatively with the commission."

It is not clear what changes Google has offered to make. The four areas the Commission criticized were Google's preferential treatment of its own services in search results; its copying material from other search engines in results; its lock on the market for advertisements placed on websites that embed a tailored version of Google's search engine; and the difficulty competitors face in bidding to place their advertisements on sites that use Google's AdWords advertising system.

In a shift of tactics from his predecessor Neelie Kroes, Almunia said in May he would prefer to end market abuses as soon as possible, rather than fine misbehaviour retroactively, especially in the Internet industry.

"I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified," he said then. "Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement."

Microsoft last week lost its final appeal in a decade-long fight against the Commission that cost it well over a billion euros.

Almunia said 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 I am today giving Google an opportunity to offer remedies to address the concerns we have already identified."

Google also faces antitrust investigations in the United States, South Korea and India.

Almunia is expected to rule on Google's proposal within several weeks, but no date has yet been set.