As reported late last week, the European Parliament is considering a call to break up Google. This would specifically involve breaking the search business away from the rest of the business.
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According to those with understanding of European law, they don’t actually have the authority to require this, but the European Commission, which has been probing Google over antitrust matters for years, and has just come under new leadership, does.
Parliament is said to be putting pressure on the EC to go the break-up route, and it’s seen largely as a political move. The U.S., which essentially cleared Google of any antitrust violations, is warning against the break-up proposal. The Wall Street Journal reports:
In an unusual move, the U.S. mission to the EU said Tuesday in an email that it had “noted with concern” the Parliament’s draft resolution. “It is important that the process of identifying competitive harms and potential remedies be based on objective and impartial findings and not be politicized,” the email said.
Legal experts expressed similar concerns, describing the Parliament’s move as highly unusual and warning it risked setting a dangerous precedent. “It is a very bad signal,” said Mario Mariniello, a former antitrust official who now works for Brussels-based think tank Bruegel. “Politicization is now getting to an extreme.”
The New York Times points out that one member of the European Parliament credited with drafting the breakup proposal has a direct interest in Google’s business practices. It reports:
Andreas Schwab, a German member of the European Parliament, has been making headlines in the last week after drafting a resolution that calls for the breakup of Google.
But Mr. Schwab is not just a legislator, he is also “of counsel” at the German law firm CMS Hasche Sigle, which has represented some of the German publishing interests that have been most eager to declaw Google. He earns roughly $15,000 to $75,000 annually from the firm, according to a disclosure filing. The firm’s website lists his expertise as competition policy.
The report later says Schwab claimed to not have discussed the resolution with the law firm, and called it a “purely political issue.”
EU competition chief Joaquin Almunia left office at the beginning of the month with Margrethe Vestager stepping in. Earlier in the year, it looked like a resolution was near, but with the change in leadership, the time this probe is taking continues into the indefinite.
Vestager reportedly said she will “take her time” with the investigation. Meanwhile, Google’s competitors and opponents will no doubt continue to distribute their messages about how bad Google is hurting competition.
The FairSearch Coalition, which is made up of companies like Microsoft, Oracle, Nokia, TripAdvisor, Expedia, and others, has been among the loudest of these voices, as has Yelp.
FairSearch is currently promoting what it calls “The Google Playbook,” which is billed as a document showing “how Google really works to build and protect its dominance,” and is summed up as “Open. Dominate. Close.”
“Consumers – not search engines – should choose winners in the marketplace,” FairSearch says. “Consumers benefit from more choices in the search marketplace competing to win users, innovating to improve products and displaying results transparently. When search providers engage in search discrimination – manipulating search results to promote a favored product and demote competitors – consumers pay the price.”
Yelp’s most recent attack against Google was with a coalition also comprised of Google critics/competitors Consumer Watchdog, Jameda, HolidayCheck, TripAdvisor, and Fight for the Future. The group launched a tool aimed at showing Google search bias, called Focus on the User, a play on Google’s frequently-used mantra.
The weeks and months ahead should be interesting ones for Google and for European antitrust law at large. It’s unclear just how damaging a break-up of Google would actually be the company, and how it would ultimately benefit competitors.
Unsurprisingly, Google hasn’t had much to say on the record about any of this so far, but reports have indicated the company is furious with the break-up talk. Again, no surprise there.
For now, we’re just going to have to wait and see how it all plays out.
Should Google be broken up? Let us know what you think in the comments.
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