For the first time ever, Google has given into regulatory pressure to change its search results. Today, the company reached a settlement with antitrust regulators in the European Union, thereby "wriggling out of billions of dollars in potential fines," reports the Wall Street Journal.
The EU's antitrust chief was concerned that Google was "using its dominance in search to exclude rivals and squeeze its customers." Federal regulators in the U.S. spent 20 months on a very similar probe, before deciding Google did no evil. The lead critic in that case was a coalition called FairSearch.org made up of companies like Microsoft, TripAdvisor, and Expedia. During the U.S. investigation, Yelp CEO Jeremy Stoppelman independently testified.
The E.U. deal is still subject to final approval, but it allows Google to avoid: (1) any admission of wrongdoing and (2) a fine of up to 10% of its global annual revenue. According to the Journal:
Big money is at stake. Google posted a 17% increase in fourth-quarter revenue, driven by a 31% gain in online-ad clicks. But Google's revenue per click is falling, raising pressure to sell high-price ads such as those on the top of the page.
The Financial Times outlines what the Google will do in return. First, it will display search results differently, so that its own sponsored results will be marked as sponsored and not given as much prominence. Other changes include:
2) How Google uses other search sites' materials.
A Google search now will automatically turn up user reviews from, say, TripAdvisor or Yelp. The EU wants Google to let those rival sites opt out of having their material displayed. Google has agreed.
The commission feels that websites that show (and earn money from) Google search ads are locked in to using Google search ads exclusively. Mr Almunia wants Google to let website publishers source their search ads elsewhere. Google has agreed.
The commission is concerned that advertisers who designed campaigns on Google's AdWords platform (the one used for search ads) find it too difficult to transfer those campaigns to a rival service. Google has agreed to no longer impose obligations that prevent that from happening.
Hardly a radical rehaul, notes the Journal, which is why rivals like Microsoft and Nokia "immediately slammed the deal."
But it's more than the U.S. Federal Trade Commission got out of the search giant. At the end of that investigation, Google made a couple "voluntary" changes like allowing Yelp and other publishers to opt-out of Google scraping their content, as well as simplifying their advertising process to give poor Bing a chance.
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