It was recently reported that the European Parliament is looking at ways to break up Google. Indeed, a draft motion is likely to be passed asking for the European Commission to “unbundle” search engines, splitting them up from other commercial services. This would be a way to stop Google from truly dominating the world. However, it is not entirely clear whether this is actually possible.
Andreas Schwab, German MEP, has long been a firm critic of Google. He is sponsoring the motion itself. He said that the motion is now in place and that the practicalities still have to be ironed out. Another MEP is taking part in the consultation and he actually took the time to speak to Google and find out what a possible break up would mean.
Basically, if the service is unbundled, then things like Google Shopping and YouTube would find benefit in the dominance in search of the company. The real focus, therefore, is in the utilities, as was explained by Sigmar Gabriel, economy minister for Germany.
We must give serious thought to the possibility of “unbundling” the Internet market, in a similar way to the electricity and gas networks.
A number of European companies have had to go through similar processes. For instance, British Telecoms (BT), used to hold a service monopoly in the United Kingdom. They owned the entire network of copper wiring. However, new legislation meant that the wires had to be made available to various other telecom companies in the country as well. The result is that BT is still a single company, but it is made up of different, completely separate divisions. Although this has been a benefit to the competitive telecoms market, some say that BT continues to be dominant and to abuse this position. They do this by ensuring their retail division has its profits squeezed to breaking point. On the other hand, it is this EU legislation that has ensured other companies were able to gain new broadband customers, as this does not involve any copper wiring.
Another example is seen in Deutsche Telekom, the German equivalent of BT. They are, interestingly, one of the biggest complainants in the current case against Google. The worry for Google, therefore, is that they will have to comply with this type of approach as well. However, their main defense is that this would lead to customers have separate data and search behavior, no longer linking in to any of their other online activities. According to Google, this would not benefit the ease of use of the internet.
If Google does have to get unbundled, some new and complex legislation would have to be developed, according to Joaquin Almunia, the European Commissions outgoing competition commissioner.
Google cannot be broken up into smaller companies without new EU legislation, the European Commission said, after detailing two potential new antitrust investigations into the internet giant.
However, a number of other sanctions that could be imposed on Google have been developed already. Ramon Tremosa, Spanish MEP, and Mr Schwab, have suggested that there should be some sort of rotation mechanism. This would mean that Google’s competitors and its commercial services will have equal prominence on the search results page. This move has been seen before, after the Microsoft investigation. It is the result of that investigation that allows users to now have a choice of browsers, rather than having to stick with Internet Explorer.
According to some, the biggest issue here is politics. The move, whether supported or not, shows that Europe is exasperated with Google. Indeed, Mr Almunia’s successor is now the competition commissioner. It is his decision to decide where to go from here. However, it is an anti-trust investigation, and this has to be taken very seriously.