Google and the European Union appeared closer to a settlement in a high-stakes anti-trust dispute, with a senior EU official saying Tuesday the case could be resolved by next spring.
Google holds about 70 percent of the search engine traffic in the US and 90 percent in Europe
Pressed by Google's many rivals, the European Commission has accused the US Internet giant of giving unfair preference in search results to its own services, such as surveys of restaurants and hotels.
Google attempted to assuage the concerns earlier this year to avoid possible fines of up to 10 percent of its annual sales, but the EU said the US internet giant still fell short of satisfying complaints from its competitors.
But a new proposal submitted early in September and worked on with the Commission ever since shows "significant improvements", EU Competition Commissioner Joaquin Almunia told lawmakers in the European Parliament.
If agreed, the new proposals could substantially change the appearance and operations of the world's most used search engine, but it remains to be seen if Google rivals will accept the changes.
In a brief statement, Google executive Kent Walker said the company had substantially revisited its first proposal despite "thriving" online competition.
"This has been a very long and very thorough investigation," Walker said and Google had made "the difficult decision" to agree to EU requirements.
Almunia said a questionnaire will now be put to plaintiffs and market participants "in order to conclude whether this new proposal is satisfactory from a competition point of view."
If satisfactory, the commission will continue on the negotiated settlement route "and end up with a formal decision next spring," he said.
Otherwise, the commission will be forced to send objections to Google "in the coming months", he said, beginning a process that could punish Google with fines of up to 10 percent of its total annual sales.
On Tuesday, the FairSearch alliance of companies which have pressed Brussels to take action against Google, said they would withhold a response until they had reviewed the details of Google's proposed remedies.
It however added that it looked "forward to a deep and broad market test" which was "the only way to test the effectiveness of the proposed remedies”.
FairSearch said "it is essential that the remedies install the principle of non-discrimination so that Google applies the same rules to its own services as it does to others when it returns and displays search results."
Almunia told lawmakers he was confident the hard work was done.
Under the new plan, he said, links from non-Google rivals became "significantly more visible" with more space and the "possibility to display their logo next to the (Google-generated) link".
The new proposal will also ensure that whatever is agreed will apply to any medium, including voice, a key shortcoming in the earlier proposal according to rivals.
Brussels launched its investigation of Google in November 2010 following a complaint by several companies, including Microsoft.
Google holds about 70 percent of the search engine traffic in the United States and 90 percent in Europe. In January, US authorities absolved Google of non-competitive practises in a very similar case.