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Report: EU Parliament draft could call for Google's breakup

In one of the most aggressive assaults on Google yet, EU Parliament has drafted a plan that would call for the breakup of Google in an effort to create "fair competition".
By
November 22, 2014
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With the ever growing amount of lawsuits and antitrust investigations that Google faces on a regular basis, the company has likely become used to the notion that regulators and other corporations will do all they can to “even the playing field”. But this newest development is far more aggressive than any obstacle they have ever confronted, and is quite possibly the biggest threat the company has ever faced, as EU Parliament has drafted a resolution that entails a plan to break up Google.

Google’s dominance “dilemma”

Despite the many successes that Google is experiencing in the mobile market, the Mountain View company has certainly had it’s fair share of problems when it comes to their core product: search. Those problems have not, however, confronted Google due to being unsuccessful or losing dominance in search. On the contrary, Google’s massive success in search is in many ways the problem itself. A quick rundown of the December 2012 Comscore search engine market share (which came to light via GigaOm) highlights the dominance that Google has enjoyed globally:

  • Google: 114.7 billion searches, 65.2% share
  • Baidu: 14.5 billion searches, 8.2% share
  • Yahoo: 8.6 billion searches, 4.9% share
  • Yandex: 4.8 billion searches, 2.8% share
  • Microsoft: 4.5 billion searches, 2.5% share
  • Others: 28.7 billion searches, 16.3% share

A 2013 update of search engine data by Return on Now showed that the company wasn’t slowing down, with Google commanding 74% of the market share in the top 31 countries, with only a handful of countries with search engines being used more than Google:

  • China: Baidu (62% share) and newcomer 360 Search (21%), who  jumped into 2nd place over the past two years
  • Russia: Yandex (62% share)
  • South Korea: Naver (72% share) and Daum (18%)
  • Japan: Yahoo! Japan (53% share, but served up using Google’s back end)

Those numbers are certainly impressive, but have come with a price. Some companies argue that Google favors its own search results over others, and there are accusations that Google faces on how they handle user data.

All of these concerns have become increasingly voiced in Europe, with many corporations and users demanding that the government do something about the company (which, in the eyes of many, holds a monopoly on search). The recent development of an EU Parliament draft to break up the company, however, is one of the most aggressive assaults on the American company to date.

The draft

According to the Financial Times, a draft motion was seen that stated “the unbundling of search engines from other commercial services” should not be ruled out as a solution to Google’s dominance in search. The draft (which does not flat out say that Google is the company being referred to, but surely has implications for the worlds biggest search engine) currently has the backing of the European People’s Party and the Socialists, with German politicians leading the way on this very rare action within Parliament.

German telecom companies, media groups, politicians, and normal citizens have been very critical of Google. German politician Günther Oettinger has proposed levying Google for showing material that’s copyright protected, and has been very vocal in how he feels about Google software being present in cars. Google was also recently forced by the European Court of Justice to accept the “right to be forgotten”, which has also created problems for the company in the now five-year-old EU investigation into their practices.

[quote qtext=”Unbundling cannot be excluded” qperson=”German MEP Andreas Schwab” qsource=”Financial Times” qposition=”left”]

European acceptance of the draft

German MEP Andreas Schwab was quoted saying that “unbundling cannot be excluded”, and is a strong supporter of the draft. Spanish MEP Ramon Tremosa, who also supports the draft, stated that the proposed unbundling was necessary to consider as a possible long term solution due to the fact that they could not outright ask for the secret to how Google’s search algorithm functions.

European competition commissioner Margrethe Vestager went on to say that she would hear Google out (along with other complainants) before making a final decision.

Can Parliament legally break up Google?

The short answer to that question is no. European Parliament does not actually have the authority to disband or break up any company, especially when you consider that the company in question is an American corporation. That being said, the possible passing of the draft could have a very powerful effect on the European Commission, who does hold the power to enforce such a draft. This is clearly shown in the 2007 case that the EU Commission made, and won, against Microsoft for integrating Internet Explorer into the Windows operating system.

Google has not released an official statement, but reports have indicated that executives are “furious” after just finding out a few days ago about the draft.

Final thoughts

As an American that has lived in Germany for the past 12 years, I found this story especially interesting. Due to European history, especially when it comes to Germany, many are very skeptical of anything that resembles a monopoly or any entity that controls huge amounts of data. The political situation of the world also doesn’t help, especially when you consider the allegations of US agencies monitoring the phone calls of the German chancellor. Put it all together (Google’s search dominance, their handling of data, their firm grip on the mobile market), and what you have is plenty of firepower and resentment for many companies, and governments, to use against them.

That being said, is breaking the company up the solution? Google became dominant because they are a great search engine that many people enjoy using. Their products like Maps, Gmail, Search, and Android, became popular because they are good, free products. Google was by no means the first search engine, and they have fought, failed (on my products) and invested billions in becoming what they are today. Should the result of their success be their falling? Wouldn’t solid evidence need to be provided that they are manipulating search results before such a plan could even be realistically considered? Has Google simply become too big for its own good?

A text for the final text of the draft will be decided early next week, with an expected vote on Thursday, meaning we may not have to wait too long to find out what exactly this will mean for Google.

I’m very curious to hear the thoughts of our readers on this, so let us know how you feel about it in the comments below.