After two years of investigations and subsequent negotiations, the EU and Google have agreed on a set of terms which will see Google legally obliged to change some of its search results in Europe to ensure that it doesn’t create a monopoly in vertical search.

Vertical search results are those which focus on a specific segment like those for online shopping or flights. Google has been expanding its vertical search business which has prompted complaints from companies such as Yelp and TripAdvisor who are worried that Google will favor its own results rather than those of third parties. According to the EU, if Google “abused” this power then it would be unfair since in Europe it has 90% of the market.

The good news for Google is that the EU aren’t asking it to change any of its algorithms or results for normal web based searches, it is mainly only the vertical searches which are causing concern. However it will have to clearly label search results from its own services, like Google Plus Local or Google News. Also, in some cases, it will need to show links from rival search engines.

The question you have to ask is: Is labeling going to change any consumer behavior? And if the answer is no, then it’s not going to do any good for Microsoft Bing or for any rival search engines – Herbert Hovenkamp, a professor of antitrust law at the University of Iowa.

The EU deal will be legally binding for the next five years and a trusted third party will ensure that Google keeps its end of the bargain. In exchange Google will avoid paying any fines (for past breaches) and would not be formally charged with any wrongdoing. This is also good for Google as these lengthy antitrust cases can be expensive and drag on for years. However if Google doesn’t comply then it could face fines of up to 10% of its global (not just European) annual sales.

What is interesting is that the EU’s decision is very different to that of the USA’s which recently ended a two year investigation into Google’s search business. The FTC concluded that there was no evidence that Google’s actions harmed consumers.

Read comments