Can the European Parliament Break Up Google?
Could the European Parliament really break up Google (GOOG)? The 751-member elected legislative body likely will rubber-stamp a motion urging the European Commission (EC) to consider separating or “unbundling” some of Google’s services such as YouTube and Google Shopping from its search engines to scale down the company’s dominance in the market, according to a Financial Times report.
The draft motion reportedly suggests the “unbundling [of] search engines from other commercial services” be regarded as a viable option to resolve Google’s command of the European market, a move that Google contends is, at least in part, politically motivated by a core group of European parliament members.
While the European Parliament cannot force companies to split up, it can exert its influence on the European Commission from which European Union (EU) legislation is initiated. The EC has been looking into Google’s activities for about five years with the company’s harshest critics arguing the search vendor sways rankings in its own favor at the expense of the competition.
EU digital commissioner Gunther Oettinger is said to favor sanctions against Google in Europe, ranging from levying it for displaying copyright protected material to insisting on neutral search results, according to the report.
“Unbundling cannot be excluded,” said Andreas Schwab, a German member of the European Parliament (MEP) who is said to support the motion.
Still, with all the uproar of a motion to unbundle, how such a response could work in practice is anything but certain, according to observers. What, for example, would the unbundling of Google’s services mean for Microsoft (MSFT) or Yahoo (YHOO) or would it just single out Google and exclude others?
With a vote scheduled for this Thursday after a final version of the draft resolution’s language is agreed on earlier this week, Google executives reportedly are miffed about what they consider to be a “politically-motivated campaign to do something that is a regulatory matter,” according to a Financial Times source.
“These guys are calling for the break-up of Google,” the source said. “That is not in proportion to the degree of concern articulated by the commission during its investigation.”
Margrethe Vestager, as of November 1 the new European competition commissioner, previously has said she will listen to both sides before determining how best to move ahead with the antitrust inquiry. In a somewhat related issue, Vestager said an investigation into the Irish government’s tax deals with Apple (AAPL) will be completed by the second quarter of 2015.