Breaking up is hard to do (or is it?)
As if Google did not already have enough legal headaches in Europe (including the European Court of Justice's inconvenient "right to be forgotten" decision this spring, and the rapid approach of the fearsome General Data Protection Regulation), speculation is rife that the European Parliament ("EP") is about to demand a divestment of Google's search engine business from its other services in Europe.
What is going on?
The draft of a non-binding EP resolution is reportedly in preparation that will call upon the European Commission ("EC") to unbundle search engines from other commercial services in Europe in order to create a more level playing field. The motion, it seems, contains no express reference to Google by name; but there can be no doubt about the motion's principal target, for Google holds an estimated 90% of the search engine market within the EU.
Why is this happening?
The move needs to be seen in the context of the EC's major antitrust probe into Google - namely, the formal proceedings under Article 102 of the Treaty on the Functioning of the European Union (which prohibits abuse of a dominant position) that have now been rumbling on for four years. Only recently, an EC Vice President stressed the role of the investigation in preventing Google from abusing its dominance to exclude rivals, large and small. But there seems to be a national dimension as well, for Germany is amongst the sternest critics of Google's dominance, and one of the motion's co-sponsors – Andreas Schwab – is a German lawmaker. Other recent high-profile criticisms of Google by Germans have included the proposal by the EU's digital commissioner – Günther Oettinger – for the imposition on Google of a levy for displaying copyright–protected material, and the demand by Germany's Justice Minister for the disclosure of the secret algorithms behind Google's search engines.
Can the EP break up Google?
The short answer is "No": it has no power to break up corporations, and cannot even initiate legislation. But the making of the resolution by the EP would inevitably step up the pressure on the EC to take decisive action against Google, and the EC's new Competition Commissioner – Margrethe Vestager – recently admitted that she would be focusing intently on the anti-trust investigation into Google.
What is likely to happen?
Speculation about Google's European break-up seems very premature, especially as the EC has promised to take time to consider both sides of the argument before deciding on any step. It should also be remembered that Google has much experience of beating off potentially hostile investigations – it was only last year that US regulators concluded that Google had not manipulated web search results in order to damage rivals. And since the anti-trust arena is where law, economics and public policy all collide with one another, predictions about the outcome of competition law investigations are notoriously unreliable.
Yet it also needs to be remembered that anti-trust law was invented in order to deal with the problem of over-mighty corporations that dominated entire industries. That invention took place in late 19th-century America; but the problem of over-mighty corporations is still just as acute today, in 21st-century Europe. Google is very powerful; but so is anti-trust law.
And, as they say, what comes around goes around.