Breaking Up Google in Europe

Google vs Europe


Last week, the European Union Parliament voted in favor of a resolution, breaking up Google within its territories.  Luckily for Google, the EU Parliament does not have the legal authority to break up the company; however, the resolution may pressure the European Commission who has regulatory powers over companies in Europe. More specifically, the European Commission could potentially bring formal antitrust charges against Google’s dominant position in Europe’s Internet search business.

Google’s search engine holds approximately 90% of the market in some countries in the European Union which has sparked legitimate concern. Since 2010, investigations have been underway to determine whether Google’s search engine favors other Google services, inhibiting other competing search advertising platforms. In particular, the investigation focused on four areas of concern about Google’s business. First, its links to its own “vertical search” services such as Google Shopping, YouTube and Maps over rivals, the copying of content from competing vertical search companies, restriction on rivals advertising on sites using Google ads, and the portability of advertising campaigns from Google’s system.

Major tech companies, like Microsoft and Yelp, formed a lobbying group called the Open Internet Project. Keeping this in mind, it is hard to say whether the resolution was a product of a genuine concern for consumers or a successful lobbying effort by Google’s competitors. Regardless, it is important to remember that this resolution is not legally binding.

In reality, a breakup of Google in the European Union is unlikely without a high level of consumer threat. An exercise of the European Commission’s regulatory powers over companies in Europe would be a more effective solution. Should the European Commission bring formal antitrust charges, Google will likely face orders to modify its business practices concerning competing search advertising platforms. Google could also be slapped with fines that could add up to 10 percent of its global annual sales, which is the equivalent of $6 billion.

Was this resolution meaningless since it is not legally binding? If the charges are brought against Google, should Google be fined or broken up?  Do you think this resolution was based on a genuine concern of the consumer or a product of successful lobbying efforts by Google’s competitors?

Sources: New York Times, Forbes, The Guardian

Photo: State of Digital

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