Google Makes New Offer to Settle Its European Union Antitrust Case

BRUSSELS — Google made a second try last week to settle a three-year-old antitrust case with the European Union, officials said. Neither side released details of the offer, however, and rivals continued to call for the American technology company to cede more control of its Internet search and advertising business.

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The latest offer by Google was acknowledged in Italy on Sunday by Joaquín Almunia, the European Union’s competition commissioner. Mr. Almunia has been seeking a settlement with the company since the early stages of the case, which formally began in 2010. The case revolves around claims that Google has abused its dominance in the Internet search and advertising field by, among other things, favoring its own products and services in search results. Google powers 90 percent of searches in many European markets; its share in the United States is closer to 70 percent.

“Once we have completed our analysis, once we will check that these new proposals are able to eliminate our concerns, we will tell Google what to do,” Mr. Almunia, referring to the offer, said in an interview with Bloomberg Television.

Mr. Almunia is under mounting pressure from Google’s rivals seeking to prolong its legal entanglements in Europe and toughen the terms of any deal.

In July, he was forced to reject a preliminary settlement struck with Google after industry groups complained that aspects of the deal could strengthen, rather than loosen, Google’s hold in Europe. That proposal, the result of Google’s first offer of a settlement, would not have required the company to change the algorithm, or formula, that produces its search results. But it would have been the first time Google had agreed to legally binding changes to its search results, and it went much further than the minor concessions it made to settle a case before the United States Federal Trade Commission.

The latest proposal by Google addressed Mr. Almunia’s “areas of concern,” Al Verney, a spokesman for the company in Europe, said on Monday. “We continue to work with the commission to settle this case,” said Mr. Verney, who declined to describe the contents of the offer.

Mr. Almunia said over the weekend that he would prefer a swiftly negotiated settlement with Google because that would be a better way of regulating the fast-moving technology sector. But he said he could still issue formal charges against the company if a deal failed to materialize.

With the case still open, Google faces a serious challenge in Europe, where it risks far-reaching orders demanding it change its business practices and potentially a fine of up to $5 billion.

Leaders of industry groups said that the latest offer by Google should be carefully tested in the marketplace to assure that the remedies addressed complaints that the company favored its own products in search results.

“We must hope after so much prevarication that this time Google’s proposals represent a genuine attempt to address the concerns identified,” said David Wood, the legal counsel for Icomp, an industry group backed by Microsoft and a number of other companies. The previous proposals were, he said, “manifestly defective.”

Fan Sites Settle Children’s Privacy Charges

In a complaint, the Federal Trade Commission said that Artist Arena, the operator of the sites, violated a children’s online privacy rule by collecting personal details — like the names, e-mail addresses, street addresses and cellphone numbers — of about 101,000 children aged 12 or younger without their parents’ permission.

The law, called the Children’s Online Privacy Protection Act, or Coppa, requires operators of Web sites to notify parents and obtain verifiable parental consent before collecting, using or disclosing personal information about children younger than 13.

The sites are BieberFever.com, SelenaGomez.com, RihannaNow.com and DemiLovatoFanClub, which is no longer in operation. The agency did not accuse the pop stars themselves of any wrongdoing.

At a conference on children’s marketing in New York on Wednesday, Edith Ramirez, a member of the F.T.C., said the settlement still required ratification in court.

As part of the registration process, the four fan sites asked users to submit personal details including their birth dates that would enable members to create online profiles, post messages and sign up for newsletters about the pop stars, the complaint said. Because the sites therefore knew the children’s ages, the F.T.C. charged, the company had knowingly collected information and failed to properly notify their parents.

“These were fan sites that knew that a very substantial percentage of users were 12 or under,” said David C. Vladeck, the director of the F.T.C.’s bureau of consumer protection. “There is really no excuse for violations like these.”

Artist Arena, a division of the Warner Music Group that manages artist fan clubs, neither admitted nor denied the agency’s allegations. Warner first invested in Artist Arena in 2007 and bought the company in 2010. James Steven, a spokesman for Artist Arena, declined to comment. The fan sites no longer allow children under 13 to register as members.

The proposed settlement comes at a time when the agency is preparing to extensively strengthen the children’s online privacy protection rule for the first time since its introduction more than a decade ago.

In an effort to keep pace with innovations like mobile apps and facial recognition technology, the agency has proposed to widen both the kinds of data about children that would require parental consent and the kinds of operators — like advertising networks or data miners — whose activities could be subject to the rule.

Last week, major corporations including Apple, Facebook, Google, Microsoft and Viacom responded, submitting public comments to the F.T.C. in which they argued that some of the proposed changes were so unworkable that they could deter companies from providing sites and online services to children.

“To ensure that the Internet continues to be a robust and enriching place for children, the commission should avoid promulgating rules that frustrate operators’ ability to continue providing the same quantity and quality of sites and online services, including those that are directed to children,” Michael D. Hintze, Microsoft’s chief privacy counsel, wrote in comments to the agency.

But the case of the pop star Web sites bolsters the viability of at least one of the agency’s proposals: that child-friendly sites aimed at audiences of varying ages must either assume all users are under 13, or screen users for age to identify those for whom data collection requires prior parental consent.

Some companies, like Viacom, have objected to this proposed change, saying that such a screening process might cause some sites to block children from participating or deter some children, who might then end up on inappropriate adult sites that do not screen users for age.

But BieberFever.com and the other fan sites, even if they failed to properly notify parents, seemed to be able to collect information on tens of thousands of children who willingly identified themselves as being younger than 13.

“Marketers need to know that even a bad case of Bieber Fever doesn’t excuse their legal obligation to get parental consent before collecting personal information from children,” Jon Leibowitz, the chairman of the F.T.C., said in a statement. “The F.T.C. is in the process of updating the Coppa rule to ensure it continues to protect kids growing up in the digital age.”

Each of the fan Web sites had slightly different registration processes. But the agency charged that Artist Arena had falsely claimed that it would not activate a child’s registration without parental consent.

SelenaGomez.com, for example, required users who wanted to sign up for the online fan newsletter to enter information like their e-mail address, birth date, parent’s name and e-mail address, and in some cases full name, city, state and ZIP code as well, according to the complaint. The child then received an on-screen notice that said “registration successful” and was able to edit his or her online profile, the complaint said.

The site sent the child’s parent an e-mail saying that it needed parental consent to complete the child’s registration. According to to the complaint, the e-mail falsely stated that if a parent did not want to approve the child’s registration, “you do not need to do anything else: simply do not click on the above link.” Regardless of the parent’s actions, the site had already registered the child, the complaint said.

From April 25, 2010, to Aug. 2, 2011, SelenaGomez.com registered 10,026 children for its fan newsletter and 2,196 children for its fan club. The site also collected and kept information on 48,531 children who started but did not finish the registration process, the complaint said.

As part of the settlement, Artist Arena agreed to delete the personal information about children under 13. The company also agreed that the sites, in places where they collect personal data, would prominently display links to a federal Web site, www.OnGuardOnline.gov, that offers information on protecting children’s privacy online.

Judge Urges Apple and Samsung to Settle Patent Dispute

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Bits Blog: Google and F.T.C. Set to Settle Browser Privacy Charge

7:17 p.m. | Updated SAN FRANCISCO — Google and the Federal Trade Commission are near a $22.5 million settlement agreement related to charges that Google bypassed privacy settings in Apple’s Safari browser to show advertisements, according to a person briefed on the proposed settlement.

The $22.5 million fine would be the largest privacy-related settlement in F.T.C. history. It comes as the commission investigates Google for antitrust violations and cracks down on privacy missteps by tech companies, including Google, which last year agreed to pay for any future privacy blunders as part of a separate F.T.C. settlement.

A spokesman for the commission, Peter Kaplan, declined to comment. Chris Gaither, a Google spokesman, also would not comment on the settlement, but said, “We do set the highest standards of privacy and security for our users.”

The case involves how Google shows users personalized Web ads based on their interests. Google’s DoubleClick ad network customizes ads based on sites that users have previously visited, and ads they have recommended to friends by using the Google +1 button. To do this, Google uses cookies, small files that allow Web sites to do things like identify the types of Web pages a user visits.

If you have visited travel Web sites or recommended ads for resorts, for instance, Google might show you vacation ads on the next Web site you visit.

Safari, unlike other browsers, blocks cookies from ad networks like Google’s. But because of a loophole, Google had been able to avoid the block, as researchers discovered in February. It installed cookies and tracked Safari users across the Web to show them personalized ads.

At the time, Google said this was unintentional and had resulted from a change in Safari of which Google was unaware. When the issue was brought to Google’s attention, the company said, it stopped using the cookies and showing personalized ads on Safari browsers. It also changed an out-of-date page in its help center that gave Safari users inaccurate information about ad-related cookies.

“We have now changed that page and taken steps to remove the ad cookies, which collected no personal information, from Apple’s browsers,” Google said in a statement Tuesday.

Google will not claim liability for the privacy violations, according to a person briefed on the settlement, which was first reported by The Wall Street Journal. Google agreed to settle in part to avoid a court battle while it faces broader regulatory investigations by the F.T.C., the person said. The settlement is subject to approval by the agency’s commissioners.

Bits Blog: Google and F.T.C. Set to Settle Browser Privacy Charge

7:17 p.m. | Updated SAN FRANCISCO — Google and the Federal Trade Commission are near a $22.5 million settlement agreement related to charges that Google bypassed privacy settings in Apple’s Safari browser to show advertisements, according to a person briefed on the proposed settlement.

The $22.5 million fine would be the largest privacy-related settlement in F.T.C. history. It comes as the commission investigates Google for antitrust violations and cracks down on privacy missteps by tech companies, including Google, which last year agreed to pay for any future privacy blunders as part of a separate F.T.C. settlement.

A spokesman for the commission, Peter Kaplan, declined to comment. Chris Gaither, a Google spokesman, also would not comment on the settlement, but said, “We do set the highest standards of privacy and security for our users.”

The case involves how Google shows users personalized Web ads based on their interests. Google’s DoubleClick ad network customizes ads based on sites that users have previously visited, and ads they have recommended to friends by using the Google +1 button. To do this, Google uses cookies, small files that allow Web sites to do things like identify the types of Web pages a user visits.

If you have visited travel Web sites or recommended ads for resorts, for instance, Google might show you vacation ads on the next Web site you visit.

Safari, unlike other browsers, blocks cookies from ad networks like Google’s. But because of a loophole, Google had been able to avoid the block, as researchers discovered in February. It installed cookies and tracked Safari users across the Web to show them personalized ads.

At the time, Google said this was unintentional and had resulted from a change in Safari of which Google was unaware. When the issue was brought to Google’s attention, the company said, it stopped using the cookies and showing personalized ads on Safari browsers. It also changed an out-of-date page in its help center that gave Safari users inaccurate information about ad-related cookies.

“We have now changed that page and taken steps to remove the ad cookies, which collected no personal information, from Apple’s browsers,” Google said in a statement Tuesday.

Google will not claim liability for the privacy violations, according to a person briefed on the settlement, which was first reported by The Wall Street Journal. Google agreed to settle in part to avoid a court battle while it faces broader regulatory investigations by the F.T.C., the person said. The settlement is subject to approval by the agency’s commissioners.

DealBook: Yahoo and Facebook Settle Patent Lawsuits

Yahoo and Facebook agreed on Friday to settle a legal fight over their patent holdings, ending what was shaping up to be one of the nastier court battles in Silicon Valley in recent memory.

Under the terms of the pact, the two companies will expand an existing partnership, including a deeper integration of Facebook’s tools into Yahoo’s content pages.

The two companies have also agreed to cross-license all their patent holdings, which would keep either side from suing the other over intellectual property issues in the future, a person close to one of the companies said.

What the agreement does not include is any sort of cash payout by Facebook, a win for the company.

The pact is intended to heal a rift between two companies that less than a year ago had begun an extensive collaboration. As part of the agreement, Yahoo and Facebook have agreed to work together to promote big events, hoping to draw increased advertising revenue.

“We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors,” Ross B. Levinsohn, Yahoo’s interim chief executive, said in a statement. “Combining the premium content and reach of Yahoo as the world’s leading digital media company with Facebook provides branded advertisers with unmatched opportunity.”

Patents have increasingly become a focal point as companies like Apple and Eastman Kodak have turned to suing rivals over intellectual property claims. But such moves are often frowned upon within Silicon Valley. Yahoo took many by surprise earlier this year when it threatened to sue Facebook, claiming that it had violated some of its oldest Web technologies. Yahoo filed suit in March, citing 10 patents in particular.

Several technology commentators criticized Yahoo as a “patent troll” that was simply seeking a big payday.

Analysts also expressed surprise, given that Yahoo’s use of Facebook tools appeared to have improved its own business. Integrating Facebook’s news activity feature into Yahoo pages, for instance, tripled Yahoo’s traffic from Facebook between September and December of 2011.

At the time, Yahoo argued that it was simply trying to protect its intellectual property.

Facebook countersued in April, claiming that Yahoo had breached some of its own patents, some of which the company had purchased.

Yahoo’s original legal campaign was masterminded by Scott Thompson, then the company’s chief executive. The lawsuit was filed at a particularly delicate time for Facebook: about two months before the company was set to go public.

In 2003, Yahoo acquired Overture, a search advertising technology company that had sued Google over patent issues. Yahoo settled the fight the next year, collecting 2.7 million shares from Google before the search giant went public.

But Facebook was prepared to wage a long and costly fight to protect itself against Yahoo’s lawsuit, people close to the company have said.

Settlement talks began shortly after the resignation of Mr. Thompson in May, following the revelation that his academic credentials had been misstated. Soon after becoming interim chief executive, Mr. Levinsohn contacted Sheryl Sandberg, Facebook’s chief operating officer, to begin negotiating a truce, according to people briefed on the matter.

Among Mr. Levinsohn’s concerns was that the patent fight was a distraction from the company’s focus on turning itself around, these people said.

The two sides spent several weeks working on the outlines of a potential agreement, including at the sidelines of the AllThingsD conference in May, these people said.

On Friday, Yahoo’s board — including directors who previously supported the company’s lawsuit — unanimously approved the settlement, one of the people briefed on the matter said.

“I’m pleased that we were able to resolve this in a positive manner and look forward to partnering closely with Ross and the leadership at Yahoo,” Ms. Sandberg said in a statement.

“Together, we can provide users with engaging social experiences while creating value for marketers.”

Shares of Yahoo dipped slightly on Friday, to $15.78, while those of Facebook rose nearly 1 percent, to $31.73.