Google’s three year tussle with Brussels over its search business is almost over. Our report today outlines the substance of its pre-charge settlement with the European Commission. Once formally adopted, it will allow Google to avoid a fine, any admission of guilt and a lengthy legal battle. But the price is accepting legally binding restrictions on how it can present its search results. Google has never yielded ground to a regulator on its prized core business before.
Given the space confines, we didn’t lay out all the details of the pact in the news piece. Some of it, as will become clear, is highly technical and not ideal weekend reading. For specialists we thought it would be useful to run through the full settlement taking each of the Commissions four concerns in turn:
THE SEARCH BUSINESS:
The concern: The Commission investigators provisionally concluded that Google was potentially diverting traffic to its own specialist, or vertical search services — like Google’s finance, news, shopping and weather sites — potentially to the detriment of consumers. Brussels alleged it 1) did not to inform users clearly when it was favouring its own in-houses services and 2) did not give proper visibility to rival search engines that may provide more relevant results.
The solution: As a principle Google promises to ensure its own in-house services are clearly labelled and demarcated from the general search results. Users should be “clearly aware” they are Google in-house services, not natural search results. Read more
Hollande made clear his Syria position had hardened in his remarks heading into the summit
Will a debate on Syria hijack this seemingly uneventful EU summit? That is certainly the Anglo-French plan. Foreign ministers discussed it only a fortnight ago and there was no mention of Syria on today’s formal summit agenda. But Paris and London have nevertheless decided to bounce their counterparts into a potentially fraught review of the sanctions regime.
Although Britain has been pushing the line for weeks, it France’s president François Hollande who fired the opening shot at the summit, making clear his position had hardened. The message: it is time to change the sanctions regime to allow Paris and London to arm Syrian rebels fighting the the regime of Bashar al-Assad. Read more
Finally the Socialists are talking. Most of the early arrivals to the pre-summit gathering of the Party of European Socialist in Brussels said next to nothing. The only statement from Danish prime minister Helle Thorning-Schmidt was a striking neon apricot jacket. Joaquin Almunia, the EU competition commissioner and former Socialist candidate for Spanish prime minister, just gave a “buenos Dias” to the throng of journalists.
So it was with some relief that the newly elected Joseph Muscat of Malta broke the silence with a call for “common sense” on economic policy. On the day to his first summit, he said the magic balance was ensuring that “good economic governance” does not “stifle growth”. It is hardly controversial. But the tone and indeed the arrival of a newly elected socialist gives a small taste of the shifting political mood in parts of Europe. Read more
It is all about to start. EU finance ministers will for the first time debate bankers’ bonuses. Brussels may say it loves democracy, but the meeting is fixed so the most contentious discussion is off-camera, in secret. George Osborne, UK chancellor, will gingerly defend his position against the planned bonus cap in the public debate afterwards, but by then the outcome of the negotiation will be clear. Think of it more like a post-match interview. This is a short guide to what to expect:
Will Osborne be able to overturn the bonus cap? Without wanting to ruin the suspense, the answer is no. The main terms of the political deal — a 1:1 bonus-to-salary ratio, which can raise to 2:1 with a shareholder vote — is here to stay. The European parliament is wedded to it. And apart from Britain, every other country is willing to compromise. Read more
Politicians the world over have huffed and puffed about excessive pay at banks since 2008. While remuneration curbs were put in place, nothing fundamentally challenged bank operations, or their ultimate flexibility to reward staff. The European Parliament has bucked that trend with the mother of all bonus clampdowns. Here are five key questions on the cap: how it works, how you can avoid it, whether it will really pass and what it means for Britain and the City.
1. How is the cap calculated and applied?Read more
The EU clampdown on bankers’ bonuses is nigh. The final talks (or so diplomats hope) have begun and the room is booked until midnight. The frantic politicking earlier today certainly indicates the deal is close. This blog includes some of the latest political intelligence and a few tentative predictions. But be warned: the Brussels blog would not wager its bonus on the outcome.
1) Britain is looking isolated. It is a complex picture, but the UK is running short of allies, especially on the terms of the cap on variable-fixed pay. Most member states are happy to compromise with the European parliament, which is leading the bonus charge. Berlin is showing no appetite for running to London’s rescue. Even Sweden, the UK’s main friend on financial issues, was relatively silent at a meeting yesterday. The Netherlands said it could even accept a tougher crackdown. Ireland want a deal this evening. Read more
At the same time, the omens from parliament are looking no better for the City’s finest. Just look at the tone of this statement the MEPs spearheading the talks put out today:
We are ready to give the Council one more week for internal discussions. If – after ten months of negotiations – a viable compromise cannot be found on 27 February, we do not see any other possibility than to ask the plenary of the European Parliament to vote on its position.
The threat of a vote is mainly symbolic. But there is no sign of backing down. Indeed parliament is upping the ante. They are pressuring the EU member states — who are represented by the Irish presidency — to override the hold-outs to a deal. It is, in other words, a challenge to force the Brits into line or outvote them within the week. High stakes. Read more
The situation is worse if you look at staff by nationality, especially for longstanding EU members. A meagre 23 per cent of Dutch Commission officials are female, 26 per cent of Belgians, 29 per cent of Brits and 31 per cent of Germans. In the top three civil servant ranks of the Commission, the Dutch ratio of men to women is an extraordinary 31:1.
No doubt the Commission want to see a better gender mix. But it seems the effort to improve the situation is generating some imbalances of its own. Read more
David Cameron is now the only leader in Europe openly advocating the revision of EU treaties by a set deadline. He asserts that this will happen by 2017 because the eurozone will have to make “massive changes” to save the single currency.
But what if that is not the case? What if Britain is the main reason for a treaty revision? How would Cameron trigger a renegotiation?
The answer lies in Article 48 — to spare you from reading the text, here’s a summary of the hurdles it places before any advocate of treaty change: Read more
Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.
Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.
Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.
James Fontanella-Khan is FT's Brussels correspondent, covering media, telecom and internet regulation as well as justice, employment and social affairs and its impact on eastern Europe. He was formerly an FT correspondent in India. He joined the FT in 2006.