Google backs down in EU spat

After threats of a $5 billion fine, search engine outfit Google has finally agreed to make concessions on how it displays competitors’ links on its website.

Google struck a deal with the European Union regulator that ended a three-year antitrust probe and avoided a fine. It has to stick to the deal for five years.

The search engine outfit may still face a second EU investigation, this time into its Android operating system for smartphones and this could get it into a bigger mess.

This current row was the subject of a European Commission investigation into its internet search practices in November 2010, when more than a dozen complainants, including Microsoft whinged. Two attempts to resolve the case failed because Google claimed it had done no evil.

Not everyone is happy with the EU deal. Competition Commissioner Joaquin Almunia said he would accept Google’s latest concessions without consulting the complainants, which seems to have prompted a furious response from critics.

David Wood at lobby group ICOMP that counts Microsoft and four other complainants among its members said that without a third-party review, Almunia risked having the wool pulled over his eyes by Google.

German online mapping services outfit Euro-Cities said it had given up on the Commission and would take its grievance to the courts .

 “Today’s announcement still leaves many questions open. We will continue to take legal action about Google’s business practices in the German and, if necessary, EU courts,” its chief executive Hans Biermann said.

Google’s success in escaping financial sanctions mirrors a similar outcome in the United States last year, where the company received only a mild reprimand from the Federal Trade Commission.