Google faces fight or flight choice against EU regulators

By Foo Yun Chee (Reuters) - Google could try to drag out its antitrust battle with the EU in the hope that fast-moving technologies render any enforced changes in its business practices meaningless by the time they are imposed, legal experts said. But though such stonewalling has been seen in past disputes between the European Commission and U.S. tech firms, Google has stressed its willingness to settle and "move on" during the five years of inquiry that led up to Wednesday's announcement of EU charges accusing it of abusing its dominance in online searches. The Californian-based firm believes it has a strong case and, according to one source familiar with Google's thinking on the matter, is not afraid to go to court if new European Competition Commissioner Margrethe Vestager rejects possible compromises, as her predecessor did on three occasions, most recently last year. But Google - whose motto is "Don't Be Evil" - is also anxious to avoid the bruises to its public reputation and distractions for senior management that hurt Microsoft in a decade of fights with Brussels that cost it over $2 billion in fines. Part of that was over its bundling into new PCs of its own Web browser, the now less than ubiquitous Microsoft Internet Explorer. "We will talk to the Commission," the source told Reuters. "It will take some time ... We will offer something, discuss with the Commission and we will see." In recent years, a dozen European and U.S. companies have protested to the European Union about how their shopping sites are ranked in Google search results. Google said its search results displayed for shopping queries had not harmed the companies which have complained. "It's why we respectfully but strongly disagree ... and look forward to making our case over the weeks ahead." One element of Google's defence has been that, despite a 90-percent-plus share of the EU market for Web searches, a growing amount of consumer purchasing is channelled through mobile phone apps and social platforms rather than traditional desktop browsers. This means complaints about Google's practices on shopping dating back to 2008, and taken up by the Commission in 2010, may have little relevance to the business in another year or two when the case may end. "In fast-moving markets, such as the Internet sector, dealing with competition concerns as quickly and as effectively as possible is key," said Andreas Kafetzopoulos, an antitrust specialist at the Dechert law firm in Brussels. Vestager said the prosecution over Google's alleged promotion of its own shopping service in search results, the part of the case where EU officials say complaints and evidence are strongest, could be followed by others on further areas. By establishing, in court if necessary, a precedent for finding Google guilty of breaking EU law, the Commission could move more speedily on further challenges. That could be more troubling to the U.S. firm, notably following Wednesday's EU decision to investigate its Android mobile operating system. Regulators in the United States, where Google has about two thirds of the search market, have not challenged the company and President Barack Obama has criticised European governments for taken a protectionist stance toward U.S. tech companies. Calling the EU action "mistaken", Iowa University law professor Herbert Hovenkamp, an expert in antitrust issues, said: "Frankly, I think they are doing this late in a product cycle where the market is going to correct most of the problems, maybe all of them, and it’s going to be too little, too late." (Additional reporting by Alastair Macdonald and Julia Fioretti in Brussels and David Ingram in New York; Writing by Alastair Macdonald; editing by David Stamp)