Resources

Thomson Reuters Tax & Accounting News

Featuring content from Checkpoint

Back to Thomson Reuters Tax & Accounting News

Subscribe below to the Checkpoint Daily Newsstand Email Newsletter

Behind Google’s Europe woes, American accents

BRUSSELS (Reuters) – When EU politicians call for the break-up of Google, it can sound like sour grapes, the anti-American backlash of an aging Europe envious, and fearful, of the wealth and growing power of young U.S. tech giants.

But should any American take time on Thanksgiving to scoff at Thursday’s non-binding vote in the European Parliament, when lawmakers may urge EU regulators to get tough with the search engine Goliath, they should know that behind the EU antitrust probe of Google stand not only Europeans but U.S. competitors.

Indeed, to many in Brussels it is Google’s fellow Americans – such as Microsoft, Expedia and TripAdvisor – whose complaints and big-money lobbying have driven a four-year-old investigation by the powerful European Commission into whether Google abuses its dominance of Internet searches to push favored Web sites.

“The American companies are using the European Commission as a battleground among themselves,” a senior EU official told Reuters. “They are the ones coming to us with complaints.

“They are the ones who are not happy when rivals present concessions and say these are not enough.”

U.S. companies like Microsoft, hit by a $700-million fine last year for foisting its flagging Explorer browser on PC buyers, are well aware of the Commission’s power in the world’s biggest economic bloc. It also may seem more aggressive than its counterpart in Washington, which last year dropped its own case inquiry into Google, concluding the firm had not broken rules.

Three attempts it made to reach a settlement were turned down by EU competition commissioner Joaquin Almunia, who agreed with Google’s rivals that concessions it offered to avoid a fine of up to $5 billion were not enough. The case is now in the hands of Margrethe Vestager, who succeeded Almunia this month.

U.S. tech firms “are all playing on a little playing field”, said Bert Foer, head of Washington think-tank the American Antitrust Institute. “Naturally they’re going to move fastest and farthest in jurisdictions that have more favorable laws.

“While there’s not a whole lot of difference between American antitrust law and European antitrust law, there is a difference in enforcement style and aggressiveness right now. So it’s not surprising that a lot of the fight is over there. And it’s not surprising that a lot of the companies are American.”

“It’s simply not about one side of the ocean against the other,” said Thomas Vinje, a partner in the Brussels office of London law firm Clifford Chance. He is advising FairSearch, a group of firms including Microsoft, Oracle and Twenga in their complaint against Google with the European Commission.

“Never has a competition case brought together such a geographical or industrial breadth of concerned parties.┬áThere’s just never been anything like it,” said Vinje. “Probably never has any company exerted so much power on so many key markets.”

TRANSATLANTIC SUSPICION

That is not to say that there is no anti-U.S. animus in Europe, among the public and some politicians. It is a fact Google, which declined comment for this article, highlights in portraying itself at times as caught in Transatlantic crossfire.

Last year’s revelations of U.S. spying on the digital doings of Europeans, including even German Chancellor Angela Merkel, heightened mistrust of U.S. power in the digital world – though Europeans still use Google overwhelmingly to search the Web.

Google suffered a setback this year when the EU supreme court upheld a “right to be forgotten”, ordering it to block links to information if people request it. It also faces legal challenges over copyright fees, led notably by German publishers, and over a variety of privacy concerns.

Underscoring a sense of siege following the drafting of the resolution in the European Parliament, the U.S. mission to the EU in Brussels issued a statement appealing for objectivity so that the antitrust case was not “politicized”.

Vinje, however, said talk of anti-Americanism was overdone and accused Google executives of “pushing the line that its troubles are driven by anti-U.S. sentiments in Europe” to gloss over what he said were real concerns about its business.

Antitrust lawyer Alfonso Lamadrid at the Brussels office of Spanish firm Garrigues said the legal troubles of Google, and other U.S. firms, simply reflected their global success: “It is mainly because in most cases U.S. firms are the allegedly dominant players worldwide. I wish more European firms were in a position to be subject to similar investigations in the U.S.”

Michael Marelus, at the Brussels office of Anglo-American law firm DLA Piper which is not directly involved in the Google case, also played down the political elements of the EU inquiry:

“Politics is clearly and heavily involved in any statement made by the European Parliament and very much so in the parliament’s call to consider unbundling Google,” he said.

“It would however be unfair to say that U.S. companies are being targeted as such … It seems that parliament is taking an aggressive stand in considering unbundling Google in the hope of ultimately obtaining a more realistic commitment from it.”

The resolution, being debated in parliament on Wednesday, was proposed by a German conservative and Spanish liberal. While the legislature has no power in the matter, and it does not single out Google by name, the call for the Commission to consider separating searches from other services is intended to increase pressure on antitrust chief Vestager to act quickly.

A Danish liberal, she has sole power to decide and has kept her own counsel. Fellow commissioners with roles in the digital market have given mixed signals, voicing concern about monopoly but also rejecting a break-up.

Backed by members of the main center-right and center-left parties, the resolution was expected to pass on Thursday in a vote scheduled after noon (6 a.m. EST).

(Additional reporting by Alexei Oreskovic in San Francisco; Editing by Alastair Macdonald)

Tagged with →