Change of Tone Could Help Google in European Antitrust Case

BRUSSELS — For the past two years, Google has worked hard to avoid facing formal antitrust charges in Europe that could mean years of expensive litigation and encourage the authorities in other parts of the world to take comparable action.

Time is running out. The European Commission could bring charges against the U.S. company for abusing its dominance in the search and advertising market in the next few weeks.

But there remains hope for a deal that would spare Google the arduous court orders and huge fines once imposed on Microsoft, another U.S. technology titan that ran afoul of European competition laws more than a decade ago.

That hope is the result, at least in part, of a changed environment in Brussels. The bitter fight with Microsoft taught regulators that long-running cases, even if won, may not result in effective remedies in the fast-moving technology sector.


Perhaps more important has been the role played by Joaquín Almunia, a Spanish politician who took over as the European Union’s competition commissioner just as the investigation into Google was getting under way.

Mr. Almunia has been a low-key figure compared with his predecessor, Neelie Kroes, who earned the nickname “Steely Neelie” for the apparent relish with which she wielded her considerable power in antitrust cases. Mr. Almunia has gained a reputation for attempting to reach settlements, where possible, rather than trying to win scalps.

Mr. Almunia, who took office in 2010, has said that the challenge in antitrust cases “is to intervene in a timely fashion, before it’s too late.”

“One trend that is emerging from a growing number of antitrust cases is our search for effective — and sometimes structural — commitments when they would more efficiently prevent competition concerns in the longer term,” he said at a conference in St. Gallen, Switzerland, last year.

In his brief tenure, Mr. Almunia has successfully concluded cases with International Business Machines, Standard & Poor’s and Apple. The cases lasted no more than two years or so. Of those three cases, only the S.&P. case was not settled before formal charges were filed. By comparison, the cases against Microsoft lasted more than a decade and spanned the tenure of two of Mr. Almunia’s predecessors.

But far from weakening enforcement of antitrust regulations, settlements show the formidable power that European investigators have over companies. Unlike their counterparts in the United States, antitrust regulators in Europe can impose penalties without first winning a court order. A company can appeal to a court but usually must comply in the interim.

Trevor Soames, a partner at the Brussels office of Shearman & Sterling, a law firm, said judges were perceived as giving “unjustified deference” to decisions by the European Commission, and so many companies avoid fighting cases. The result is that companies “enter into settlements that they shouldn’t, as the case against them is weak,” said Mr. Soames, who has represented Microsoft and Qualcomm in antitrust cases.

Without a settlement, Google would leave itself open to being fined as much as 10 percent of its annual worldwide revenue, which reached nearly $38 billion last year, and conform to any E.U. law it was found to violate before being allowed to appeal to the General Court of the European Union.

Google and Mr. Almunia have repeatedly left the door open for negotiations.

More than a year ago, at the annual World Economic Forum in Davos, Switzerland, Mr. Almunia assured Eric E. Schmidt, then Google’s chief executive, that he would give the company a chance to offer a solution without incurring a penalty.

This year, again in Davos, Mr. Almunia met with David C. Drummond, the chief legal officer of Google. At that meeting, Mr. Drummond suggested that the Google case provided an opportunity to change the model of European antitrust inquiries to resolve cases more rapidly, according to people with knowledge of the discussion who spoke on condition of anonymity because it had been private.

The two men also discussed the desirability of addressing any concerns about Google’s business practices without going through all of the steps in previous cases, these people said.