Does Europe have the power to break up Google ?

Google

MEPs are set to clash with the European commission over whether Google’s dominant search engine should be separated from the rest of the company.

The parliament is poised to call for a break-up of Google in an attempt to drastically escalate Europe’s long-running anti-trust case against the US search giant, according to a draft motion.

The motion, which is expected to be discussed in Strasbourg on Wednesday before a vote on Thursday, forms part of what some commentators have called a politicalisation of a regulatory issue. The motion is expected to pass with the backing of the EPP and the Socialists, the parliament’s two main political groups.

“It is a very bad signal,” Mario Mariniello, a former antitrust official who works for the Bruegel thinktank told the Wall Street Journal. “Politicisation is now getting to an extreme.”

Parliament v commission

The parliament does not have the power to directly order a breakup of a company in this manner, but can apply pressure to the commission (EC), which has regulatory powers over companies operating in Europe.

Since the reports of the motion, its authors attempted to downplay the suggestion of a breakup or an unbundling of Google, claiming that it is just one of several options.

The German conservative Andreas Schwab and Spanish liberal Ramon Tremosa, two of the authors of the motion, said they were “not ideological against Google. We are against monopolies. Unbundling is one of the ideas, but we proposed several.”

Günther Oettinger, the commissioner in charge of the digital economy, also opposed the motion. He told the German business journalist Roland Tichy that “breaking and expropriation” was not an option and that such measures would be “instruments of the planned economy, not the market economy”.

EC vice-president Andrus Ansip also downplayed unbundling talk: “I’m not ready to say that they will have to be broken up, talking about vertically integrated structures.”

“We have to investigate very carefully where those problems are … and then find possible solutions”, Ansip said, adding that decisions should only be taken after a full public debate. “We have some doubts about misuse of gatekeeper positions and also leading positions in the markets.”

Antitrust case re-opened

The EC re-opened its long-running antitrust investigation into Google’s search and advertising business after Joaquin Almunia, then the EC’s antitrust chief, received “very, very negative” responses from complainants to the proposed settlement unveiled in the spring.

He later stated that Google could face a “statement of objections” - the formal path towards a fine that could equate to 10% of the company’s global revenue, or about $6bn (£3.7bn).

Almunia’s replacement, Margrethe Vestager, was less bullish on the antitrust case and the rejection of the previously agreed settlement.

“The issues at stake in our investigations have a big potential impact on many players, they are multifaceted and complex. I will therefore need some time to decide on the next steps,” Vestager told a European parliament hearing.

‘Motivated by politics’

Several high-ranking American politicianshave warned the parliament to keep politics and regulatory concerns separate.

The house judiciary committee chairman, Bob Goodlatte, wrote in a letter to leaders of the European parliament that he was “troubled” by the motion, which was “encouraging antitrust enforcement efforts that appear to be motivated by politics, rather than grounded in factual and legal principles”.

The US mission to the EU also “noted with concern” the draft motion stating that “it is important that the process of identifying competitive harms and potential remedies be based on objective and impartial findings and not be politicised”.

After the parliamentary motion is voted through as expected, it will be down to Vestager and the EC on whether to act . Any decision could take years to be enforced.

However, Oettinger’s comments indicate she may face rebellion from within if parliamentary pressure forces her in the direction of unbundling.

Google declined to comment.

Powered by Guardian.co.ukThis article was written by Samuel Gibbs, for theguardian.com on Wednesday 26th November 2014 16.02 Europe/London

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