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01
Dec
2014

Google Faces Bleak Future With EU Regulators Taking Action

by Bill

In a move that many now see as a legislative shot across the bow of tech giant Google, European Parliament has voted to break-up search companies that seek to gain a strong potentially monopolistic foothold in other verticals. The vote came after 3 EU lawmakers urged the move forward and carried a 384 to 174 majority of the parliamentary count. The non-binding resolution in the European Parliament will not be the cause of any immediate action, but it is the strongest signal yet that Europe’s concern about the growing power of U.S. tech firms like Google is growing. The wide passing margin of more than 2/3 of the vote puts Google on even less steady footing with regulators.

German conservative lawmaker Andreas Schwab is on one of the bill’s three co-sponsor and he stated emphatically that it should be looked at as a political signal to the European Commission, which is tasked with ensuring a level playing field for business across the 28-country European Union. “Monopolies in whatever market have never been useful” said Mr. Schwa. “Neither for consumers nor for the companies.”

Google declined to make any public comment in response, and it is important to note that the language of the bill never mentioned Google by name, speaking instead of ‘search companies’ in broader terms. Meanwhile, European Competition Commissioner Margrethe Vestager stated that she would review the case and speak with the complainants. Her predecessor has already rejected three attempts by Google to settle earlier complaints and avoid potential fines of up to $5 billion for allegedly demoting rival service ranks unfairly.

Adding to the pressure on Google, France and Germany called for a thorough review of the competition rules enacted by the EU to ensure global Internet companies could successfully be targeted. With all of these new shots coming on the heels of other recent legislation out of the EU like the right to be forgotten, and a four-year investigation that was triggered by complaints from Microsoft, Expedia, European publishers and others.

As the very least, Google now finds itself with fewer friends and more enemies in commercial and governmental arenas. A history of poaching market share from other verticals like book publishers, phone handset makers, broadband providers and countless other areas of the economy now have many keenly interested in containing the tech giant or segmenting it into smaller more manageable parts under the auspices of creating a more level playing field.

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