Microsoft moves to stop Google's 'catastrophic' European Union deal

By Foo Yun Chee

BRUSSELS (Reuters) - Google's antitrust deal with EU regulators was criticized by Microsoft and other competitors in a last-ditch attempt to influence European Competition Commissioner Joaquin Almunia before he leaves office at the end of October.

The Competition Commissioner is preparing to decide whether to wrap up the case or hand it over to his successor when his mandate ends, after spending three years examining whether Google squeezes out rival services in online search results.

Almunia reached a preliminary deal with the world's most popular Internet search engine in February. He has told 18 complainants that he intends to rebuff their grievances and is now examining their responses.

Microsoft's director of competition law, Jean-Yves Art, said the U.S. software company was particularly concerned about Google's contractual curbs on advertisers making it difficult for them to switch to other online platforms.

"The proposals don't cure or eliminate all restrictions that we and rivals see. There are still restrictions preventing them from providing interoperability," he said at a news conference organized by a host of Google complainants.

The head of British price-comparison site Foundem, Shivaun Raff, said the Commission had no evidence that Google's offer to let three rivals display their logos and web links in a box and allow content providers to decide what material Google can use for its own services would resolve competition issues.

"(Google's proposals) are not a remedy. They are a catastrophic escalation of the abuse," Raff said.

The case has become highly politicized, with sources saying about a third of Almunia's colleagues in the Commission are opposed to the deal. Sources told Reuters the EU may close the current case and open another one into Google's Android mobile operating system. [ID:nL2N0Q000N]

Almunia's spokesman Antoine Colombani declined to comment. Google spokesman Al Verney said: "We've co-operated fully with the European Commission's investigation over the last four years. Our proposal addresses all of the EC's concerns, and greatly increases the visibility of rival services."

Also at the meeting were representatives from newspapers and magazine publishers across Europe, lobbying group ETTSA whose members include online travel site and Google complainant Expedia , and several complainants from Germany, Britain and France.

(Editing by Tom Pfeiffer and Elaine Hardcastle)

[Image via Agence France-Presse]