Here's Why Europe Wants To Break Up Google

Larry Page SadJustin Sullivan/ Getty ImagesGoogle CEO Larry Page

The European parliament is considering a motion that would suggest Google unbundle its search engine from its other products, The Financial Times reported this afternoon.

Although the parliament doesn’t have the power to split up Google (or any company for that matter), this dramatic move would put political pressure on the European Union to double-down on the antitrust investigation that it has been conducting against Google for the last four years.

European concern about Google stems from the fact that the company has huge market share in Europe — about 90%, versus around 68% in the US. Some believe that it abuses that dominance by downgrading the search results of its rivals.

When the antitrust investigation first launched in 2010, now-former VP of the European Commission Joaquin Almunia listed four main areas of concern:

  • That Google gives links to its own “vertical search services,” like Google Shopping, restaurant reviews, news, or YouTube, preference over rival links
  • That it takes content from competing companies (like restaurant reviews from Yelp) and uses it in its own services
  • That it shuts out search advertising competitors on websites where it delivers search advertisements
  • That it makes it difficult for advertisers to move their advertising away from its own system, AdWords.

Yelp, for example, has argued that Google pushes down its results in favour of its own properties (like Google+ reviews), even when Google’s websites offer lower quality search results.

In February of this year, Google nearly settled the European antirust case by promising it would give its rivals more prominence in specialised search results and would allow competitors like Yelp to stop Google from using their content, without pushing down their organic links. There was no fine against Google and the Commission ultimately found that it was not an illegal business.

Competitors and other critics didn’t think that solution was harsh enough.

“We do not believe Google has any intention of holding themselves to account on these proposals,” David Wood, legal counsel for a trade group representing Microsoft and other rivals, told The New York Times.

The “very, very negative” response from a lot of different sources prompted the European Commission to re-open the case in September. German justice minister Heiko Maas demanded that Google reveal how its search algorithm works, in order to protect consumers and prove it doesn’t favour its own products.

EU Commissioner Almunia has also suggested that it may launch an investigation into Android, Google’s mobile operating system, which runs on about 75% of all new smartphones sold in Europe.

Google, for its part, strongly maintains that it doesn’t promote its own products at the expense of its competitors, it just tries to give the best results.

In a speech in Berlin in October, former Google CEO and current executive chairman Eric Schmidt tried to justify Google’s results by wants to be able to provide users with the most direct answers to any question they may ask. The EU is investigating Google because other companies have complained that the search engine favours its own results, and Schmidt argues that it’s because Google just wants to be as direct as possible and save users from having to click around.

“Put simply, we created search for users, not websites,” he says. “And that’s the motivation behind all our improvements over the last decade.”

The anti-trust case isn’t the only instance of Google clashing with the EU. In June, Google was forced to start enacting the EU’s “right to be forgotten” ruling.

The ruling says individuals can request to have Google stop linking to websites, news stories, and items that are “inadequate, irrelevant, or no longer relevant.” Opponents of this legislation — including Google — believe that it’s akin to censorship.

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