Barely noticed by the world, a battle has been raging over the last 4 years that could have a radical impact on global business. Irate corporate giants in Europe have garnered sufficient support from the EU to initiate an anti-trust move against Google that could see the search giant split up and fined upwards of $6bn.
For a company that famously launched it’s public offering with the motto “Don’t be Evil”, Google is facing scathing criticism from its user communities for engaging in what is being perceived as unfair trade practices.
Dozens of companies have sued Google in Europe on the basis of antitrust complaints since 2009.
Consortiums including publishers, telecom giants, media production houses, and advertising networks, have complained about Google taking advantage of its market dominance to promote its own services to the detriment of its competitors.
Industry monitors report that Google currently controls more than 90% of the online search market in Europe, which is greater than its market share in the US. Allegations have been levelled that Google is abusing its dominance to unethically promote its own services in search result listings over that of competitors.
Robert Thomson, CEO of News Corporation, has been one of the prime movers against Google. He has been campaigning with the European Commission (EC) complaining about Google’s unfair practices.
Just before Christmas last year, by a vote of 384 to 174, the European Parliament passed a resolution that referred to the possibility of breaking up Google, separating the search engine business from Google’s other online assets. Specifically, the resolution calls for the prevention of “any abuse in the marketing of interlinked services by operators of search engines.” This is in addition to a more direct note that the Commission consider “proposals with the aim of unbundling search engines from other commercial services” over time, stressing the need to enforce EU competition rules.
Joaquín Almunia, Competition Commissioner of the European Commission, has stated in the European parliament that unless Google altered its offer to settle complaints, the EC shall issue fines that could equate to 10% of the company’s global revenue, or about $6bn (£3.7bn).
“Microsoft was investigated (by the EC) for 16 years, which is four times as much as the Google investigation has taken, and there are more problems with Google than there were with Microsoft,” Almunia has said.
In addition to the furore over its search related practices, Google’s Android platform has come under fire as well. Over the past few releases of the Android Operating system, Google has been increasingly limiting the flexibility available to developers creating apps for Android devices. This makes third-party Android apps more dependent on proprietary Google services. Complying with these restrictions makes it harder for software creators to produce non Google-proprietary instances of the supposedly open-source Android.
So how will things change for Australian businesses who rely on Google to advertise their services and get found by prospective clients? In the short-term, nothing changes and it’s business as usual. Disappointing, but true…
The EC’s move has been described by critics as being “toothless”. The most recent resolution does not require any governing body to take specific steps, nor can industry regulators move to split up Google. Supporters of Google, including the Wall Street Journal and other US based publications discreetly ridiculed the EU’s sabre-rattling as just that, empty threats that will never amount to anything.
However, the fact that organisations are sitting up, banding together, and bringing about such changes indicates that the EU is leading a ground swell of dissent against Google in order to preserve the competitive market. We will continue to watch this space for how this will play out in the months ahead.