Google’s message in Europe is clear: Don’t think of us as a monopoly, but rather as a “growth engine” that is helping businesses and charities to succeed.
Google is promoting that message using emails sent to European politicians and it has now released a report detailing what it says is an immense and positive impact on the UK economy.
Google’s managing director for the UK and Ireland Eileen Naughton outlined Google’s message in an interview Tuesday morning. She told the BBC’s Today programme: “Many people don’t quite understand Google’s full on impact. They see Google as a search engine but we know that it’s a growth engine for the UK economy — impacting jobs, impacting growth through our search service but also through YouTube, through our AdSense content network where we monetise publishers’ content in the UK and around the world. Our services are leveraged by businesses large and small. We’ve levelled the playing field.”
The idea that Google is helping (not hurting) businesses is crucial for Google right now because it’s currently facing two different antitrust investigations from the European Commission, as well as continued anger at the amount of tax it pays in the UK, and further antitrust investigations in Russia.
Google is facing antitrust investigations from the EU
The EU formally accused Google of antitrust violations in April over the way it displays shopping results. It alleged that Google favours companies that pay for advertising over other results, even if the other results are more relevant. The EU is also looking into the way that Google bundles its own apps with its Android mobile operating system.
There’s the potential that Google could be seriously damaged by the European Commission’s investigations. It could be fined up to 10% of its revenue, bringing the maximum penalty to $US6 billion (£3.9 billion). That’s not a small amount, by any means.
Another danger to Google isn’t a fine, but a PR crisis. The European Parliament voted to break up Google back in November. That was a historic move, and a clear message that Google’s dominance isn’t welcome here. But the European Parliament doesn’t have the power to force Google to do anything. Instead, it was Europe’s way of firing back at the company.
But those aren’t its only problems
Google has also been facing an antitrust investigation by Russian’s Federal Antimonopoly Service over the way it bundles its own apps and services within Android. It looks like Russia has now ruled that Google did in fact break the law in Russia, as the Federal Antimonopoly Service told The Wall Street Journal that it had found Google guilty of “abusing its dominant market position” but not of “unfair competition practices.”
There’s also controversy in the UK about how much tax Google pays. The government announced in March that it was introducing a so-called “Google Tax” to prevent large US companies funelling profits out of the UK to try and avoid paying tax here. Google doesn’t seem concerned by the tax issue, though, as Naughton told the Today programme that “Google does pay tax in the UK. We’re obliged to do so and we abide by the laws of the countries in which we operate.”
Google has lots of different options available
Google is fighting to take back control of its public image in Europe. Right now, it’s seen by politicians as a rampant giant that dominates the search market in Europe. You might not realise it, but Google’s core search engine is even more popular in Europe than it is in the US. Ninety-per cent of searches in Europe are performed through Google, compared to 68% in the US.
So it’s up to Google to show the public in Europe (as well as the politicians) that, yes, it’s big, but its impact is positive. On Tuesday, Google released a report created by Deloitte that details the impact it has on the UK economy. The report claims that Google has created between £11 billion and £28 billion in economic activity through businesses that use Google Search and AdWords.
Google held an event in London on September 15 which showcased some of the ways that it helps entrepreneurs and charities. It brought startups, charities, and small businesses on stage to talk about Google’s positive impact on their businesses and the UK economy as a whole. Google’s message was clear: We’re helping, not hurting, businesses.
There are lots of different things that Google can highlight. Businesses can use the AdWords advertising product to reach new customers, as well as Google Drive to create and collaborate on documents, and YouTube to share videos. There are also more direct ways that Google helps companies, including training businesses, the Google Campus startup space in London, and the Google Ventures VC fund, which it brought to Europe in 2014.
Another, more direct, way that Google is fighting to convince Europe of its benevolence is by sneaking into the inboxes of Europe’s top politicians. It sponsored a week of Politico’s Brussels Playbook morning email, making sure that the politicians who read it saw Google’s message.
There’s always a nuclear option
One option that Google could take if all else fails is to pull out of countries that don’t play ball. Spain demanded that Google pay money every time it linked to articles in its Google News service. That obviously wasn’t going to happen, so Google simply shut down Google News in Spain.
A similar thing happened in Germany when a group of publishers demanded that Google stop republishing snippets of stories and thumbnail images from their stories. Google complied, and listed headlines in plaintext, just like the publishers wanted. But Axel Springer (which has invested in Business Insider) eventually gave in and reversed its position after traffic to its sites plummeted following the Google redesign that it had called for.
Google can (and will) change or remove parts of its services if countries or businesses don’t cooperate. In fact, that’s probably what’s going to happen in Europe with the Google Shopping antitrust investigation. Google clearly doesn’t want to pay a massive fine, so it will probably modify Google Shopping in a way that pleases the EU.
Right now Google is going on the offensive in Europe because it realises that the ongoing antitrust investigations by the European Commission and Russia have the potential to permanently smear its public image. Chances are that the eventual outcome of the investigations will be small in scale, but it does contribute to a narrative that Google is enforcing a monopoly in Europe and hurting competition. The European Parliament passing a vote to break up Google doesn’t help it there either.
So now it’s time for Google to take control and tell politicians and the public that, actually, it’s a good thing, and they’re lucky to have it in Europe.
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