EU lawmakers push to break up Google

By Bai Tiantian Source:Global Times Published: 2014-11-29 0:03:01

Anti-monopoly sentiments could affect Chinese firms: analysts


The non-binding resolution in the European Parliament to break up Google is a signal that Europe is becoming increasingly protective of its domestic Internet industry, a move that in the long run could also affect Chinese Internet companies such as Alibaba and Baidu, should they consider entering the European market, analysts said.

In a direct challenge to Google, members of the European Parliament assembled in Strasbourg approved a resolution on Thursday calling on the EU to consider ordering search engines to separate their commercial services from their businesses.

The resolution was passed on Thursday with 384 votes for and 174 against.

Google has been in the EU's regulatory sights since 2010, and is also grappling with privacy issues, requests to scrub search results to comply with a court ruling, copyright concerns and tax controversies.

The non-binding resolution in the European Parliament is the strongest public signal yet of Europe's concern with the growing power of US tech giants.

Conservative German lawmaker and co-sponsor of the bill Andreas Schwab said it was a political signal to the European Commission, which is tasked with ensuring a level playing field for business across the 28-country bloc.

"Monopolies in whatever market have never been useful, neither for consumers nor for the companies," he said.

The resolution did not mention Google or any specific search engine, though Google is by far the dominant provider of such services in Europe with an estimated 90 percent market share.

European Competition Commissioner Margrethe Vestager has said she will review the case and talk to complainants before deciding on the next step.

Her predecessor rejected three attempts by the company to settle complaints that it unfairly demoted rival services and stave off a possible fine of up to $5 billion.

"Europe has its own business traditions. Its economy is largely based on small- and medium-sized enterprises, the existence of which depends heavily on antitrust policies to protect them in competition with large, multinational firms," Cui Hongjian, director of the Department of EU Studies at the China Institute of International Studies, told the Global Times.

"Europe's business environment is also relatively conservative in comparison to the US. Internet companies have broken the boundaries of old business models and cannot be gauged by traditional standards," Cui said.

Tensions have already risen before the Thursday vote as Capitol Hill hit back at EU lawmakers for politicizing the antitrust investigation into Google. 

According to the Financial Times, a joint letter from the Republican and Democrat leadership of the Senate finance committee and House ways and means committee said such investigation from the EU raised questions "about the EU's commitment to open markets."

"This and similar proposals build walls rather than bridges [and] do not appear to give full consideration to the negative effect such policies may have on the broader US-EU trade relationship," wrote senators Ron Wyden and Orrin Hatch and congressmen Dave Camo and Sander Levin.

"The resolution clearly shows the difference between the US and EU in terms of economic structure, model of development and business culture … Google will have to make adjustment to adapt itself into the European market and the move could give the European Internet business a boost," Cui noted.

His opinion was echoed by Hu Ronghua, vice director of the Center for European Studies at Fudan University, who told the Global Times that "the resolution will make it more and more difficult for any Internet company, not just Google, to dominate the European market."

"Even for Chinese Internet firms such as Alibaba and Baidu, should they try to grow their businesses in Europe, an unavoidable step is to consolidate the market. But such moves would most likely come under attack due to similar antitrust terms," Cui said.

Adding to the pressure on Google, France and Germany called on Thursday for a review of the EU's competition rules to ensure global Internet companies could successfully be targeted.

They wrote to the Commission asking it to launch a public consultation "to discuss the framework that should be applied to these economic actors, to see if today's competition rules allow us to target the behaviors of these companies," said Axelle Lemaire, French state secretary for digital affairs.

Lemaire said the two governments wanted to make sure the tax optimization strategies used by companies to lower their corporate tax rates "are no longer possible."

Agencies contributed to this story



Posted in: Europe

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