Both moves are also playing out against the backdrop of a long-running investigation by the European authorities of Google, on which the European Union’s new antitrust chief, Margrethe Vestager, is still getting up to speed.
A breakup of Google in Europe will almost certainly not happen, legal experts say. And whether any of the various policy moves afoot will ever significantly curtail the company’s business operations across the region is still too soon to gauge.
But taken together, the level of policymaking activity being devoted to the company signifies the growing antipathy to U.S. technological dominance in the European Union even as its citizens grow ever more reliant on its gadgetry and conveniences. Not since European officials spent years seeking to rein in the powers of an earlier tech titan, Microsoft, has a U.S. company drawn such scrutiny on this side of the Atlantic.
European fears of U.S. technology giants have been stoked in the past 18 months by the revelations of Edward J. Snowden, a former National Security Agency contractor, about U.S. intelligence agencies’ spying activities and perceived easy access to the world’s tech infrastructure. Chancellor Angela Merkel of Germany publicly complained when it was discovered last year that her cellphone had most likely been tapped by U.S. intelligence.
In one sense, Thursday’s vote amounts to little more than political posturing because the Parliament has no formal power over antitrust policy in the 28 countries of the European Union. That power rests with the European Commission, the bloc’s executive arm. Yet the vote could raise pressure on Vestager to speed a decision on whether to bring formal antitrust charges against Google in an investigation that began in 2010. That inquiry involves Google’s dominant position in Europe’s Internet search business and asks whether the company’s search results favor other Google-related services and hobble competing search advertising platforms.
But even if Vestager finds fault on Google’s part, analysts said, the most likely outcome might be changes in its business practices and even possibly a big fine – as happened in past European investigations with Microsoft as well as another U.S. tech giant, chipmaker Intel.
“Breaking up Google would be unprecedented in all kinds of ways and seems hugely unlikely in absence of massive, proven consumer harm – and it’s very unclear to me whether the commission is going to find that harm,” said Mario Mariniello of Bruegel, a research organization in Brussels.
He noted that U.S. antitrust officials had never found reason to censure Google, despite its market power on both sides of the Atlantic. He said it was “hard to see how Europe could do this alone, and what would be the basis for doing something so fundamentally different from the U.S. authorities.”
Ricardo Cardoso, spokesman for Vestager, said after the parliamentary vote that she would not be swayed by the result. Antitrust should be “independent from politics” so that Europe’s “procedures are not put into question,” he said.
A Google spokesman, Al Verney, declined to comment.
The vote was taken … on a broader resolution on the digital economy that passed with 384 votes in favor, 174 against and 56 abstentions.
The lengthy resolution broadly called on the European authorities to break down barriers in digital commerce and was backed by significant numbers of lawmakers in the main conservative and socialist political blocs in the Parliament, the only directly elected body in the European Union.
Vestager, a free-market Dane who took office Nov. 1, succeeded Joaquin Almunia, who initiated the antitrust investigation of Google. Almunia tried three times to settle with the company but abandoned those efforts after its competitors and other groups said the proposed settlement terms would not be enough to allow for fair competition. Google’s search engine, with about 90 percent of the market in some European Union countries, is even more dominant in Europe than it is in the United States.
Vestager has said she would take the necessary time before deciding on next steps in that antitrust case. She must also decide whether to open a formal investigation into Android, Google’s mobile operating system. A preliminary inquiry, also begun under Almunia, has been considering whether Google uses Android to discriminate against non-Google applications.
The power of the commission to break up companies was made explicit in 2003. In a landmark case in 2008, the German energy utility E.ON agreed to sell its extra-high voltage network as part of a settlement, not something unilaterally imposed on the company.
In the case of technology companies that have already run the antitrust gantlet in Europe, the main penalty has been the use of fines. The largest single fine yet levied in such a case was 1.1 billion euros ($1.37 billion) in 2009 against Intel for abusing its dominance in the computer chip market. But Microsoft underwent a series of investigations and settlements, racking up a total of more $3 billion in European fines over the course of a decade, including a penalty in 2013 for failing to adhere to an earlier settlement.
For Google, its inability to reach a settlement with the European Commission despite years of trying means the company could still potentially face a fine of nearly $6 billion, or 10 percent of global annual sales, and restrictions on its freedom to do business in Europe if it is eventually found to have broken the bloc’s competition laws.
Among the proponents of tough antitrust action against Google in Europe are major U.S. technology companies like Microsoft and Yelp, as well as powerful German and French publishing groups that have formed a lobbying group called the Open Internet Project. That Microsoft now finds itself lobbying against the current market giant indicates how quickly the dynamics can change in the digital economy.
The breakup language was introduced by Andreas Schwab, a German member of the European Parliament. Schwab is “of counsel” at the German law and lobbying firm CMS Hasche Sigle, which has represented some of the German publishing interests that have been most eager to curb Google, including the German Magazine Publishers association. Schwab said he had not discussed the resolution with the law firm.
In the United States, powerful members of Congress and Gov. Jerry Brown of California, where Google is based, strongly condemned the initiative. Leaders of congressional trade committees warned that the vote could even imperil negotiations over a trans-Atlantic trade pact, which the European Union has made a priority as part of its efforts to reinvigorate growth and create jobs.