The European parliament is thinking about making a ruling that Google split off its search engine from other parts of its business, according to a report today in the Financial Times.
But we were wondering: how can Europe order an American company to break apart? How would that even work?
“I don’t know,” answered Herbert Hovenkamp, a law professor at the University of Iowa who is considered one of the leading American experts on European antitrust law.
“I think it’d be very difficult for Google to disaggregate all its own assets and interests from Google Search just in Europe. I’m not saying it couldn’t do it, but it would be costly. You’d get a lot of squawking from European consumers because it would deteriorate the quality of Google search quite a bit.”
That’s because Google uses its own products to provide quick answers to certain kinds of queries.
(It must be noted that Hovenkamp did some work for Google in 2010 during its dispute with the American Federal Trade Commission, but hasn’t worked for them since.)
Keith Hylton, an law professor at Boston University, agrees. “The European Parliament has no authority to break up Google — and I’m surprised that this sort of legislation isn’t considered unfair, since it targets one entity for punishment.”
However, Hylton thinks Google would be wise to take the threat seriously.
“Expect a much harsher deal than Google worked out earlier with the previous EC competition commissioner Almunia. That earlier deal was a laughable outcome in which Google was poised to make more money from the remedy than it would have made without EC intervention.”
Regulators in Europe have been looking at Google closely for a few years now, concerned that the company is using its search dominance to guide users to its own products and away from competing products, as well as generally playing unfair in the advertising market.
But both professors think that the American Federal Trade Commission had the right idea when it looked at Google, found no wrongdoing, and closed its investigation.
The reason? Unlike the case with Microsoft in the 1990s, where consumers paid for Windows on new PCs and faced some technical barriers in switching to a new operating system, using Google search is free and it’s easy for people to switch search engines.
“If a customer doesn’t like a particular search engine they can switch to different one,” says Hovenkamp. “The thing about bias with respect to Google assets or interests, that problem can be addressed by requiring Google to post a note or symbol” — for instance, YouTube results could be clearly marked as coming from Google.
“My view is this is problem that can be addressed with something much more modest and less reactionary,” he added.