November 22, 2024

As Europe Presses Google on Antitrust, U.S. Backs Away

BRUSSELS — Google seems on its way to coming through a major antitrust investigation in the United States essentially unscathed. But the outlook is not as bright for Google here, as the European Union’s top antitrust regulator prepares to meet on Tuesday with Eric E. Schmidt, Google’s executive chairman.

In the United States, the Federal Trade Commission appears to be ready to back off what had been the centerpiece of its antitrust pursuit of Google: the complaint that the company’s dominant search engine favors the company’s commerce and other services in search queries, thwarting competition.

Yet in a statement last spring, Joaquín Almunia, the competition commissioner of the European Union, placed the contentions about search bias at the top of his list of concerns about Google. And in a private meeting this month, Mr. Almunia told Jon Leibowitz, chairman of the F.T.C., that European antitrust officials remain focused on that issue, according to two people told of the meeting, who asked not to be identified because they were not authorized to speak about it.

Mr. Almunia’s tougher bargaining stance, antitrust experts say, is not merely a personal preference.

European antitrust doctrine, they say, applies a somewhat different standard than United States law does. In America, dominant companies are given great leeway, if their conduct can be justified in the name of efficiency, thus consumer benefit. Google has consistently maintained that it offers a neutral, best-for-the-customer result.

In Europe, antitrust experts say, the law prohibits the “abuse of a dominant position,” with the victims of the supposed abuse often being competitors. “The Europeans tend to use competition law to level the playing field more than is the case in the United States,” said Herbert Hovenkamp, an antitrust expert and law professor at the University of Iowa. (Mr. Hovenkamp advised Google on one project, but no longer has any financial connection to the company.)

The European rationale, legal experts say, is that shielding competitors to some degree preserves competition and enhances consumer welfare in the long run.

“Europe has a stronger hand to play with Google because of its standards,” said Keith N. Hylton, a professor at the Boston University School of Law.

The European antitrust regulators, like their American counterparts, have been in negotiations with Google for several months. The F.T.C. is expected to announce its decision within days, while the European timetable seems not as tight and is likely to go into next year.

The investigations in the United States and Europe really started with accusations of search bias. Rivals complain that the search giant gives more prominent placement and display for its online shopping and travel services, for example, than to competitors. The potential antitrust concern is that such specialized, or “vertical,” search services — like Yelp or Nextag — are partial substitutes for Google’s search engine because they also allow people to find information.

In his public statement in May, Mr. Almunia identified four areas of concern in Europe’s antitrust investigation of Google. The first concern he cited was search bias.

“Google displays links to its own vertical search services differently than it does for links to competitors,” Mr. Almunia said in a statement then. “We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.”

His other three concerns are ones that Google is preparing to address with a set of voluntary commitments in the United States, according to two people briefed on Google’s talks with the F.T.C., who declined to give their names because they were not authorized to speak about them.

Google, according to the people, has agreed to refrain from copying summaries of product and restaurant reviews from other Web sites and including them in Google search results, a practice known as screen scraping.

James Kanter reported from Brussels and Steve Lohr from New York. Claire Cain Miller contributed reporting from San Francisco.


Article source: http://www.nytimes.com/2012/12/18/technology/eu-and-google-to-discuss-antitrust-issues.html?partner=rss&emc=rss

DealBook: NYSE and Deutsche Borse Offer New Deal Concessions

9:11 a.m. | Updated

LONDON — NYSE Euronext and Deutsche Börse have submitted new concessions to the European authorities as the exchanges attempt to gain approval for their proposed $9 billion merger.

The move comes as the European Commission and a local German regulator have raised concerns about the deal, which would give the two companies a dominant position in the exchange-traded derivatives market.

To allay these concerns, the companies said on Tuesday that they had agreed to divest more of their equity derivatives trading operations, as well as provide the new owner access to Eurex Clearing, a clearinghouse for derivatives products.

The concessions include the disposal of all of NYSE Euronext’s single-stock derivatives businesses in Europe, according to a person with knowledge of the matter.

If local regulatory approval isn’t given for divestments in individual European countries, the companies would look to dispose of Deutsche Börse’s complementary operations in those countries, the person added.

NYSE Euronext, the parent of the New York Stock Exchange, and Deutsche Börse also said they would license Eurex’s trading system to third parties looking to offer interest-rate derivatives.

The firms said the European authorities were now expected to make a decision on the merger by February; the previous deadline was January.

“The revisions are designed to reflect the European Commission’s feedback on the initial proposal, and thereby fully address the commission’s remaining concerns while preserving the industrial and economic logic of the merger,” the companies said in a statement.

The new concessions echo a similar move in November when NYSE Euronext said it would sell its pan-European single-equity derivatives units, but not the options businesses in its home markets. Deutsche Börse said it would divest similar operations. The companies had also agreed to give rivals access to Eurex Clearing to offset regulatory concerns that the pending merger would lead to uncompetitive practices.

The European authorities are concerned the merger would give the companies a dominant position in the exchange-traded derivatives market, where the firms’ operations represent up to 90 percent of trading activity in certain contracts.

NYSE Euronext and Deutsche Börse are adamant that the proposed merger does not break antitrust rules. They cite competition from the so-called over-the-counter market, dominated by many of the world’s largest investment banks, which still represents the majority of derivatives trades in Europe.

Under new global regulatory proposals, these opaque deals are being required to use clearinghouses — financial intermediaries that guarantee trades if one side defaults — and to trade on exchanges.

William Rhone, a senior analyst at financial consulting firm TABB Group in New York, said the over-the-counter derivatives market, not the exchange-traded sector, was where antitrust regulators should be focusing their attention.

“The NYSE Euronext and Deutsche Börse is an attractive proposition that will allow them to compete with the oligopoly of the O.T.C. dealers,” Mr. Rhone said. “It’s that market, not the exchanges, where the debate about competition should be.”

Last week, Deutsche Börse’s chief financial officer, Gregor Pottmeyer, said the deal could be in jeopardy if antitrust regulators demanded more concessions.

“We want to pursue the transaction, but not at all costs,” Mr. Pottmeyer said. “Antitrust conditions should not be allowed to endanger the industry and economic logic of this transformational merger.”

Along with antitrust concerns, a local German regulator has also questioned how the deal would affect the companies’ future operations in Frankfurt, where Deutsche Börse is based. On Monday, the Hessian Ministry of Economy, the local regulator for the Frankfurt Stock Exchange, called for changes to the merger to protect trading activity in Frankfurt.

“We have communicated suggestions about how our concerns could be remedied,” said Wolfgang Harmz, a ministry spokesman.

Article source: http://feeds.nytimes.com/click.phdo?i=f0ae09ed56417495a1c792f858fc6e60

Google Acquisition of Motorola Delayed in Europe

BRUSSELS — European antitrust regulators have suspended their investigation into Google’s acquisition of Motorola Mobility, a maker of smartphones, until Google provides additional evidence in the case, the European Commission said Monday.

Google needed to supply “certain documents that are essential for the evaluation of the transaction,” Amelia Torres, a spokeswoman for the commission, said. “Once we have all the documents, we’ll restart the clock.”

Ms. Torres declined to give any details about the nature of the documents at the center of the latest tussle between Google and European regulators.

Google already is trying to fend off a separate investigation by the commission into whether the company has abused its dominant position in online search and advertising.

Google filed late last month for European clearance to complete the deal with Motorola, worth $12.5 billion.

With its purchase, Google would obtain a portfolio of patents that could give it an impressive defense against infringement lawsuits.

But the acquisition could also aggravate antitrust concerns by further bolstering Google’s strength in the markets for mobile search and advertising.

“We’re confident the commission will conclude that this acquisition is good for competition and we’ll be working closely and cooperatively with them as they continue their review,” Al Verney, a spokesman for Google, said.

Such requests were “routine,” he said.

Joaquín Almunia, the E.U. competition commissioner, had been scheduled to decide whether to clear the transaction, or to take a few more months to review the deal for antitrust concerns, by Jan. 10.

The U.S. Justice Department has already sent Google and Motorola Mobility a request for additional information, lengthening the U.S. review process.

 

Article source: http://feeds.nytimes.com/click.phdo?i=5a25b7ee29951d93742cd3bb6e5cc948