Is Google being Undone?

That is a bit of a misnomer – Google is not really being undone, but there is a very real chance it could be unbundled in Europe by early next week.

What does Unbundled mean?

In this context, unbundling refers to the Google search engine being separated from its other commercial services.

Think of it this way; Google has its fingers in a lot of pies – 90% of the search market in Europe alone to be exact. These ‘pies’ include:

  • Maker of Android – the operating system on many smartphones
  • Enterprise services
  • Mapping
  • Chrome Web browser (it’s the one I use as well!)

A lot of Google’s services are integrated together. Do you use Android? Well, you need a Google account (Gmail) to use it. Don’t worry though, the app is preloaded onto the phone and programmed to run on Google’s services.

There is evidence to suggest that Google uses its search engine to give an advantage to their commercial products.

How is this happening?

Last week, the European Parliament voted in favour of proposals to break up Google.

This proposal wants to separate Google’s search operations from the rest of the company. That would in theory, eliminate or greatly reduce any unfair advantage Google may have.

Now these proposals, regardless of the outcome, don’t have the power to break up Google itself. They will work in a more round-a-bout fashion – if they pass, the motion would apply pressure on the European Commission, which in term sets the region’s legislative agenda.

 

Why can’t the European Commission just investigate Google on its own? Well, at this time it is showing no interest in examining Google’s competitive practice, so the roundabout method is necessary.

So, this headline-grabbing vote is not binding, but politicians are increasingly sure that they will successfully put an end to Google’s perceived monopoly.

Consequences

If this vote is approved, it will probably have further reaching consequences than just unbundling Google.

A precedent will have been set in Europe. As our CEO here at Planet4IT always likes to say, a lot of law is built around precedent setting.

If the motion passes, the European Commission will get a green light to ask questions of Google. From that, they can lodge antitrust investigations that could, in turn, force Google to change how it does business in Europe.

In short, the British government will be given more control and power over Google. And if Britain gets that kind of power, a precedent will be set for other countries to follow in its example.

Why vote at all?

We all know a little competition is healthy, right? Well, only if the game isn’t fixed. What’s the point of racing if you know the other competitors are getting unfair advantages and will probably win?

That’s what Google’s competition is saying. In 2010, they alleged that Google was favouring its own products and services over those of rivals in search results.

What does that mean? Well, if you search ‘smartphone’ in Google, the search results would have all the Android phones as the top results (Google’s own smartphone) while all the competitors, (Blackberry, Apple, etc.) would be much lower in the results. A higher number of people would click the top results and never even see the competition pages near the bottom.

The competitors say this isn’t fair – and European officials agree.

The European Commission has been investigating Google since these complaints were first made in 2010. A proposed settlement was reached in February of this year, under which Google agreed to display search results for its own services the same way it does for rival companies. Unfortunately, this settlement was not really enforced and didn’t require Google to pay a fine or change its corporate structure. And it didn’t spread to Google’s other commercial search engines – like YouTube or Google shopping.

In theory, this unbundling would be enforceable, and prevent Google and its other commercial services from benefiting from the company’s dominance in search.

Not everyone is happy

Obviously Google’s competition is happy with this decision, but that joy doesn’t seem to reach us in North America.

The United States especially doesn’t like this proposal.

The US Mission to the European Union responded to news with a disapproving tone.

Many in America seem to believe the neutrality of Google and other search engines in regards to their commercial endeavours is already assured under existing EU competition law.

Guenther Oettinge, European commissioner for Digital affairs,  was quoted last week as saying there would be “no break-up and no expropriation”, claiming these were not appropriate tools for a free market economy.

The ALDE (Alliance of Liberals and Democrats) group of parties, also voted against this resolution, stating that it was not the role of the European Parliament to “interfere” with individual businesses.

“Parliament should not be engaging in anti-Google resolutions, inspired by a heavy lobby of Google competitors or by anti-free market ideology, but ensure fair competition and consumer choice,” the group said.

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