Google Breakup: Wrong Answer To EU Antitrust Concerns - InformationWeek

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12/1/2014
09:36 AM
Thomas Claburn
Thomas Claburn
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Google Breakup: Wrong Answer To EU Antitrust Concerns

Market forces will achieve better results than the European Parliament's proposal to separate Google Search from the rest of the company.

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European Parliament officials may seek the breakup of Google as a remedy in the European Union's antitrust investigation of the company.

The Financial Times on Nov. 21 reported that a draft proposal to address Google's dominance in Internet search suggested the "unbundling [of] search engines from other commercial services" as a possible resolution.

Breaking up Google doesn't sit well with US government officials. The US Mission to the European Union, based in Brussels, Belgium, emailed the EU on Tuesday to express concern about the proposal, according to The Wall Street Journal.

The European Parliament doesn't have the authority to force a breakup but can put pressure on the European Commission, the EU's competition regulator, to do so.

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In January, Google settled the US Federal Trade Commission's antitrust inquiry, to the displeasure of Google's rivals.

The following month, Google settled the European Commission's four-year antitrust investigation into its search business, addressing concerns that it used its search dominance to promote its own services at the expense of competitors. The company agreed to several concessions. For example, when it promotes specialized search services such as Google Shopping on search results pages, it agreed to also advertise the services of three rivals in a fair manner.

But the European Commission reopened its investigation in September following complaints from Google's competitors that the settlement didn't go far enough. Google's Android business also faces a separate antitrust inquiry.

(Source: Simon/Pixabay)
(Source: Simon/Pixabay)

A breakup of Google appears to be unlikely. In 2000, US federal judge Thomas Penfield Jackson ordered the breakup of Microsoft for violating US antitrust law. That ruling was overturned on appeal and it's doubtful a similar ruling against Google would survive the judicial process in Europe or elsewhere. Google's behavior simply isn't that egregious; it may favor its own services in search results, but many companies do the same. Amazon, Apple, Microsoft, and other technology companies all promote their own products within other products they own.

Search is a matter of free speech; at least one US court has already said as much. Google should be allowed to present whatever lawful information it wants in its search results. Search results represent one possible view of what's relevant for a given search query. There's no one right way to do it and, if Google gets it wrong, it's up to another search company to offer superior results.

Though Google dominates the European search market with 87% of the online advertising market, according to rival-backed advocacy group FairSearch.org (a percentage roughly comparable to Microsoft's former desktop dominance), it achieved its market share by building a better search engine than rivals.

Google doesn't dominate everywhere: It has only a quarter of the search market in Russia and less than 5% in China. The EU seems to want to follow in the footsteps of those countries by putting Google at a disadvantage.

Rather than pushing for the breakup of Google, the European Commission should focus on preventing anticompetitive bundling and contracts while allowing the search market to sort itself out.

That's already happening to some extent. Mozilla plans to replace Google with Yahoo as the default search engine in Firefox in the US next year. Something similar may also occur with mobile Safari when Google's default placement deal with Apple expires. And Mozilla is working on a more inclusive search interface for Firefox, one that presents alternative search engines as a person types a query.

Google has long argued that competition is only a click away; it may also be achieved by browser interface improvements and a change in default search engine settings.

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Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio
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Joe Stanganelli
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Joe Stanganelli,
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12/13/2014 | 4:34:41 AM
Re: Pish posh
Plus, it's hard to argue that your success is an antitrust matter when your competitors are willfully copying you (e.g., accusations of Bing copying Google's search)
Li Tan
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Li Tan,
User Rank: Ninja
12/8/2014 | 8:41:20 AM
Re: Pish posh
I feel agree - Google Search's great success is not the result of marketing or using monopoly power. It's due to its strong algorithm bringing high effciency. In other words, the end user made the choice by themselves and Google Search is proved to the best (not one of the best).
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
12/7/2014 | 9:42:24 PM
Pish posh
The whole thing is ridiculous.  I am no Google fanboi by any means, but Google's success as the dominant search engine has little to do with antitrust practices and much more to do with its algorithm.  It's not like, for instance, where Microsoft was using its market power to put Internet Explorer and other MSFT products in PCs (and even those litigation proceedings were rather nonsensical).
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
12/7/2014 | 9:39:52 PM
Re: Google and EU
Re: No "right" answer in whether a book is good or bad.

Wrong.  The Scarlet Letter is just terrible.  Ditto for David Copperfield.

And I wouldn't trust anyone who doesn't enjoy The Hitchhiker's Guide to the Galaxy.  :)
jries921
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jries921,
User Rank: Ninja
12/4/2014 | 12:29:20 PM
Inappropriate for the European Parliament to intervene
The decision as to whether or not to seek a breakup or to otherwise restrain Google should be made by the responsible EC officers based on the relevant law and evidence.  I don't think Google has broken any antitrust laws, but if the EC uncovers clear and convincing evidence to the contrary, then it should do its duty as with any other lawbreaker (and share with trustbusters elsewhere).  In any case, the recently passed resolution at best smacks of political grandstanding, and causes me personally to suspect financial contributions to the parties supporting it (I find it suspicious that a resolution regarding what is essentially a judicial matter passed on a party line vote).

 
moarsauce123
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moarsauce123,
User Rank: Ninja
12/3/2014 | 8:00:22 AM
Breakup necessary because market forces failed
Google has a commanding market share in search and in the mobile area. Google uses that dominance to push plenty of other services onto users with the sole intent to gain more info on users to sell even more targeted advertising. I'd believe in market forces if there were any serious market forces left to compete. Bing? Yahoo? Pffft! Neither can effectively compete with Google.

A forced breakup is never a nice option, it would be much better if companies like Google would not bend over backwards to constantly abuse their market dominance. Besides that, Google continues to fail to play by the rules and as is the case everywhere, if you ignore local laws and regulations it will eventually catch up to you. Unless we talk about the US and its wishywashy governments who failed to effectively break up the Microsoft market dominance and rather saw competitors die. Did anything change since then on desktops? No, desktops still run predominantly Windows with Apple making only negligible gains.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
12/1/2014 | 11:15:31 PM
Re: Position of dominance usually leads to restricted conusmer choice
>The public should have a right to know if such a practice is going on, if that's the case. 

Agreed. In fact, there should be greater transparency everywhere in the business world (to say nothing of the public sector). Businesses should have as little privacy as consumers.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
12/1/2014 | 8:21:44 PM
Position of dominance usually leads to restricted conusmer choice
Google is a service built atop the public Internet, and its piggyback position on a publicly-financed thoroughfare leaves it in a slightly different position than businesses on the ground. That is, there's a way to assert the public interest as well as allowing the marketplace to sort things out. Rule no. 1: Browsers should offer multiple search options. Rule no. 2: search engines with over 33.3% market share must publish the rates they charge advertisers. If a dominant search engine wanted to, it could favor advertisers who used only its service and punish multiple search engine advertisers with higher rates. The public should have a right to know if such a practice is going on, if that's the case. It woujld then be up to public agencies to decide how to promote a more level playing field. Microsoft used a position of desktop dominance to punish manufacturers who loaded more than one operating system on a PC. limiting Linux loads initially.  
Dan Euritt
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Dan Euritt,
User Rank: Apprentice
12/1/2014 | 4:00:12 PM
Re: Google and EU
I agree that it's not so much a privacy issue, rather, it's about Google manipulating it's search results to maximize it's income. This article does not provide any details about exactly what it is that the EU is objecting to, and the links in this article are hidden behind paywalls.

In 2013, Google grossed over $50 billion in Adwords income. More details on the above in this Thom Foremski article at ZDNet: zdnet dot com/the-scorpion-and-the-media-industry-can-europe-change-googles-nature-7000033864/
Thomas Claburn
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Thomas Claburn,
User Rank: Author
12/1/2014 | 2:15:21 PM
Re: Google and EU
But the EU's search breakup plan isn't so much about privacy as it is about diminishing Google's power in the online ad and content markets, and making life easier for the company's competitors. 
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