Google has formally submitted a package of concessions to European Union competition regulators in a strong signal that the world's No. 1 search engine may be able to settle a two-year antitrust investigation without a fine.
Google first offered proposals at the end of January following a spate of complaints from rivals such as Microsoft (MSFT.O) that triggered the European Commission's investigation in November 2010.
But the company, which has a market share of over 80 percent in Europe's Internet search market according to research firm comScore, has now made a formal offer after fine-tuning its proposals following discussions with the EU antitrust authority.
"In the last few weeks, the Commission completed its preliminary assessment formally setting out its concerns. On this basis, Google then made a formal submission of commitments to the Commission," said Antoine Colombani, the Commission's spokesman on competition policy.
"We are now preparing the launch of a market test to seek feedback from market players, including complainants, on these commitment proposals," he said, declining to provide details.
EU Competition Commissioner Joaquin Almunia, speaking in Washington, said on Thursday that whatever agreement is reached will be legally binding.
"I am trying to reach a decision ... that will include legally binding commitments based on the Google proposal," he told reporters.
The U.S. Federal Trade Commission wrapped up a similar probe in early January by concluding that Google did not manipulate search results.
It also extracted pledges that Google would end the practice of "scraping" content from other websites for its products and allow advertisers to export analytical data, but did not take formal, legal action to ensure those pledges would be met - a decision that angered Google's critics.
Almunia brushed aside questions about whether the FTC's conclusions would make it more difficult for his investigators to make a different finding. "This is not creating any difficulty for our investigation," he said.
He also said that there had been no decision made on whether to investigate complaints by Google critics such as Microsoft that Google was guilty of predatory pricing in offering its Android mobile operating system for free.
"We have not yet decided if a formal investigation will be launched or not," Almunia said.
Labels may be the answer
People familiar with the matter have previously told Reuters that Google has offered to label its own services in search results to differentiate them from rival services, and also to impose fewer restrictions on advertisers.
Google spokesman Al Verney said the company continues to work cooperatively with the Commission. A settlement with the regulator would stave off a fine that could reach $5 billion, or 10 percent of its 2012 revenues.
The Commission said Google may have violated antitrust rules by pushing its own services over those of rivals, copying travel and restaurant reviews from competing sites without permission and restricting advertisers from moving to competing services.
The market test is critical to determine whether regulators accept Google's concessions or demand more.
In an indication of the pitfalls still ahead for Google, online German mapping service and Google complainant Hotmaps said the concessions must address rivals' concerns.
"hot-map.com will actively partake in the market testing of Google's concessions and only accept a settlement if competition is fully restored in a future-proof manner," said Michael Weber, the company's chief executive.
Frustrated by the slow pace of the Commission's investigation, rivals such as British price comparison site Foundem, U.S. online sites Expedia (EXPE.O) and TripAdvisor, and German publishers have already urged tougher action.
British online mapping company Streetmap, another Google complainant in the EU investigation, took its case to the British court on Thursday, citing damage incurred as a result of Google's practices.