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The European Parliament is about to call for the “unbundling” of Google’s search business from the rest of its operations, as one potential way to challenge the company’s market dominance, according to a report in the Financial Times.
The FT said Friday that it has seen a draft motion that has the backing of the European People’s Party and the S&D (the Socialists), which are by far the two biggest blocs in the Parliament, with a combined weight of around 55 percent. The motion apparently urges the European Commission – which unlike the Parliament does have the authority to break up companies – to “take a tougher line on Google”, in the FT’s words.
The Parliament reportedly would like the Commission to tackle Google’s dominance either through its ongoing antitrust probe into the firm’s search tactics – currently on pause as new competition commissioner Margrethe Vestager re-evaluates where things stand — or by some other means. It is worth noting that Vestager’s predecessor, Joaquin Almunia, was of the opinion that Google could not be broken up under existing competition legislation. Then again, he was also keener than everyone else to agree an early settlement with the firm, and ultimately failed to do so.
Google has a much higher share of the search market in Europe – well over 90 percent – than it does in the U.S., which is why its practices matter so much there. Some of the criticisms call out clearly anticompetitive practices, such as Google promoting its own services over those of rivals in its results, but others have been piling into the case in recent months.
Of particular note is the campaign against Google by press publishers, particularly those in Germany. The new digital economy commissioner, the German Günther Oettinger, has the copyright reform brief and has indicated that he wants to take the publishers’ side in their quest to extract money from the firm for using snippets of their text in its search results.
Google doesn’t just have to deal with the ever-expanding search-related antitrust probe. Vestager is also mulling multiple competition complaints relating to Google’s all-or-nothing bundling of its core apps with its Android operating system, both from independent app store developers and from nemesis Microsoft, which has also been a major behind-the-scenes force in the search case.
On the ability of the Commission to take drastic measures in antitrust cases, a 2003 regulation states:
Structural remedies should only be imposed either where there is no equally effective behavioural remedy or where any equally effective behavioural remedy would be more burdensome for the undertaking concerned than the structural remedy. Changes to the structure of an undertaking as it existed before the infringement was committed would only be proportionate where there is a substantial risk of a lasting or repeated infringement that derives from the very structure of the undertaking.
However, the Commission has never to my knowledge taken this nuclear option.
Beyond antitrust, Google has also repeatedly shrugged off data protection fines across Europe, as national privacy regulators try desperately but unsuccessfully to force a change in its ways. Oettinger said in a Thursday public Q&A session with the German Press Association (DPA) that “if companies based outside the EU want to operate with their digital services within the European digital market and have access to data which they then store or evaluate, then they must adhere to our rules.”
“We are seeking unified data protection across Europe, one which American companies will have to abide by as well. If this is not the case there is scope for punitive measures and fines,” the digital economy commissioner warned. On the copyright question he also said, slightly mysteriously: “We want European copyright legislation and we want companies like Google to adhere to European copyright standards. We have the legal jurisdiction for this and we want to bring a degree of fairness into the relationship between the users, Google and its competitors.”
Add to that the so-called “right to be forgotten” debate — which affects Google so much because of its dominance, but is not a result of it as such — and the U.S. firm really is having constant struggles in the EU.
The FT article said the motion may be voted upon next Thursday. Again, it is important to note that the Parliament itself cannot initiate any break-up, and the Commission is perfectly capable of ignoring the Parliament’s wishes when it feels like it. Nonetheless, we’re dealing with a Commission that is just a few weeks old — it took over at the start of the month — so it’s hard to judge at this point what it will or will not do.
This article was updated repeatedly to add further background.