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EC mulling Google break-up – report

regulation red tape european commission

A leaked report has fuelled speculation that the European Commission intends to unbundle Google in response to the internet giant’s growing share in multiple markets. According to the FT, a draft motion from the Commission states that “unbundling search engines from other commercial services” is being investigated as a means of curtailing the company’s growing dominance.

The European Commission’s case against Google began 4 years ago, in November 2010. Joaquin Almunia, the immediate-past competition commissioner, spent the years since waging war with Google over the internet giant’s growing dominance of the web search market. During his tenure, investigations extended into Google’s use of the Chrome browser as standard on all handsets operating Google’s own Android OS, which is the most widely consumed mobile operating system in the world.

In September, Almunia stated the ongoing dispute with Google has the potential to be even more litigious and complex than the Commission’s investigation into Microsoft in the 1990’s. That case focussed on Microsoft’s abuse of its position as a dominant operating system provider, and led to multiple fines and charges being levied against the software vendor. It took 16 years to settle.

The newly appointed competition commissioner, Margrethe Vestager, is the former economy minister for Denmark, and seemingly has a job on her hands picking up the baton dropped by Almunia. Vestager is believed to be keen to listen to the views of both Google and various complainants before she makes any decisions on moving forward with the inquiry.

According to the Guardian, Google’s search engine currently owns more than 90% of the web search market. As a consequence of owning the market’s dominant search engine, the United States’ Federal Trade Commission levied charges against Google for allegedly favouring its own digital services over more relevant material in internet searches.  In January 2013, Google was cleared of any wrong-doing or detriment to the consumer experience.

In relation to the apparent crusade the Commission is taking against Google, a spokesperson for former digital commissioner Neelie Kroes, stated the imperative nature of ensuring fair treatment of companies in dominant market positions.

“The Commission’s job is to solve market failures and enforce rules, not target companies,” they said. “There are many legal and social issues Google needs to address. But the EU acts on facts and complaints, not theories and prejudices and that legal base isn’t going to change. It’s not OK to turn a company into a punching bag and I wouldn’t expect the new Commission to do so.”

Considering the staggering length of the Commission’s case against Microsoft, we could well be just four years into a long running soap opera between a vastly powerful and successful internet giant, and a cumbersome bureaucracy. Time to get the popcorn.


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