European regulators are apparently ready to accept a solution proposed by Google following long-running investigation into its alleged search engine bias and anti-competitive advertising practices. The details of Google’s offer haven’t yet been made public, but sources told the New York Times that the search engine giant will make changes to the way its results are displayed. So-called “vertical results”, such as those to do with hotel prices or flight tickets, will be clearly labelled as Google services, however Google will not actually be forced to change how its search algorithm actually works.

One of the most crucial things to come from the agreement is it means Google will avoid admitting to any abuse of its monopoly on European search, and it will get out of having to pay any fines. The changes, which were described by two separate sources to the NYT, won’t be seen for at least a month while the plan is considered by Google’s rivals, in a phase the EU’s anti-trust regulator has previously called ‘market testing’.

The EU’s long-winded investigation bottled down to four major concerns, which have apparently all been addressed in the settlement. The first concern was that Google was prioritizing its own services in key industries where it had a market presence, for example displaying results from Google+ Local above those from rivals like Yelp. As part of the solution, Google has promised to display three ‘rival’ results for each of its own services that it links to, and will clearly indicate which are its own services.

The second concern related to the way Google displayed results from competitor services within its vertical search listings. Yelp had accused Google of scraping content from its site, displaying this in its own local search engine – now, Yelp and others will be able to opt out of these vertical results (presumably meaning Google can no longer scrape its content) without having to suffer any penalty in Google’s organic search results.

Finally, the solution covers concerns three and four, which relate to “exclusivity agreements for the delivery of Google search advertisements on other websites and restrictions in the portability of AdWords advertising campaigns.” Under the deal, Google has agreed to make contractual changes so that sites using Adwords are able to display adverts from competing agencies as well.

Google’s Solution: Little To No Impact At All?

By and large, it looks as if the EU has managed to force much tougher concessions out of Google than the FCC ever did, but whether or not they will actually address the complaints against them looks doubtful. For one thing, rivals like Microsoft haven’t wasted much time in voicing their displeasure over the solution.

David Wood, a lawyer representing industry group ICOMP, which is backed by Microsoft, made the following complaint to Bloomberg:

“If what has been proposed is labeling or a modified form of labeling, frankly that’s a non-starter. We haven’t seen the proposals and the commission hasn’t explained them to us. We’re in the dark.”

“When the market test goes ahead, we will try and be constructive. But if it doesn’t clearly set out non-discrimination principles and the means to deal with the restoration of effective competition, plus effective enforcement and compliance, it’s very difficult to see how it can be satisfactory.”

Indeed, Mr. Wood could well have a valid point. As Herbert Hovenkamp, a former Google adviser and anti-trust law professor told the New York Times, the solution is unlikely to have much of an impact on the company’s real power. After all, labelled or not, its own services will still be right up there at the top of the results page, and are a few labels really going to change consumer behavior? The answer is almost certainly not, which means that labelling is essentially a rather pointless exercise.

That Google will not be forced to change its search algorithm in any way is another cause for concern. While its vertical results have been affected, the ‘solution’ does nothing to address the fact that Google’s organic search results would appear to be just as biased. In pretty much any industry that Google has an interest in, its own services or affiliated companies find their way to the top. For example, a search for “best sushi in New York” turns up the Zagat blog, which was acquired by Google in 2011. Alternatively, a search for “free online word processor” throws up, you guessed it, Google Docs as the number one result (note it doesn’t appear anywhere near the top on other search engines).

We’ll be keeping an ear out for official confirmation from the EU’s anti-trust commissioner. For one thing, it’ll be interesting to see what Google’s competitors have to say once we reach the “market testing” phase. We’re guessing that they won’t be best pleased.