EU approves French state aid for Google rival

The EU's competition watchdog on Tuesday approved 99 million euros (US$152 million) of French state aid for a consortium to build a European rival to US Internet search giant Google.

The "Quaero" search engine project (Latin for "I search"), involving 23 companies led by French technology giant Thomson, has not yet got off the ground because of a lack of funding. Its costs for the first five years are estimated at 199 million euros, half of which the French government -- which has championed the idea -- has agreed to fund.

Following an "in-depth examination," the European Commission decided that the Quaero Internet project "brings positive externalities for the community as a whole."

However Quaero "is not spontaneously underpinned by the market owing to divergent interests within the consortium and to uncertainties regarding the project's chances of success," the EU's executive arm said in a statement.

Any resultant distortions in competition "should be limited," it said.

"We are confident that the positive contribution the program will make to European research will outweigh any distortion of competition caused by the aid," EU Competition Commissioner Neelie Kroes said.

Thomson's targeted clients for Quaero are Internet network operators, content distributors and film production studios. When developed, it will be available for personal computers, mobile phones, televisions and other platforms.