SANTA MONICA, CA – Consumer Watchdog today insisted the European Commission must ‘market test’ a reported new proposal from Google to settle the three-year antitrust investigation of the Internet giant and said any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results – including links to Google products.
Reuters reported on Wednesday that a new deal to settle was close and that the third offer featured “much better” concessions, according to an EU official. Unlike two earlier proposed deals, Reuters said the Commission did not plan to market test the new proposal. Market testing allows competitors and other interested parties to comment on a proposed settlement. After two earlier market tests – in which Consumer Watchdog objected to the deals – the Commission rejected Google’s proposals.
In a letter to Joaquin Almunia, Commissioner for Competition, Consumer Watchdog’s Privacy Project director, John M. Simpson, wrote:
“Perhaps this latest proposal is adequate. We cannot know or comment, because we have not seen it yet. We call upon you to release this third proposal and market test it. And, if this third settlement proposal with Google does not provide a commitment to end search manipulation and to practice search neutrality, then the Commission must file a Statement of Objections and commence antitrust proceedings.”
Read Consumer Watchdog’s letter to Commissioner Almunia here: http://www.consumerwatchdog.org/resources/ltreugoogle012914.pdf
Consumer welfare is the ultimate test of any antitrust settlement, Consumer Watchdog said. Consumer groups on both side of the Atlantic – BEUC and Consumer Watchdog – have both objected to Google’s earlier proposals. Both times the proffered Commitments failed to meet the standard of consumer welfare.
“If the third proposal merely offers ‘technical’ changes from the earlier proposals, the new Commitments would essentially legitimatize Google’s anticompetitive practices and give the company more tools to strengthen its dominance,” wrote Simpson. “Labeling does nothing but obscure the results of Google’s anticompetitive abuses. It does not resolve the fundamental issue of search manipulation.”
Consumer Watchdog noted that while DG Comp’s procedure manual provides that no market test is required for “smaller (‘technical’) changes to the commitment text” it would be necessary if “the revision of the commitments is substantial.”
“Frankly, given the results of the two earlier market tests, we cannot understand how the third proposal could be anything other than a substantial change from the earlier woefully insufficient remedies proffered by Google if it is to be accepted by you,” wrote Simpson. “In other words for the third proposal to be remotely viable, it must be a substantial change. If it is such a significant change, then – by your own procedures – you must market test it.”
The letter also pointed out that the nonprofit nonpartisan public interest group receives no funding from Microsoft or any of Google’s competitors. “Our interest in this case is only motivated by our concern for the welfare of consumers,” Simpson wrote.
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