Google’s operations in Europe have come under fire recently, with the UK proposing new corporate tax reforms that are being dubbed a “Google tax” for targeting the multi-national. And this follows hot on the heels of the European Parliament’s non-binding vote to “break up Google”.
The resolution rightly drew attention to the key role that search engines play in today’s digital economy – quite simply that without them we would not be able to find what we are looking for online and that these searches generate a lot of information that can be commercialised.
Provocative Move
Applying competition rules across various part of the EU’s economy, including telecommunications, is not without precedent. But, the suggestion that the European Commission should consider “unbundling search engines from other commercial services” is a provocative move and has ruffled some feathers on both sides of the Atlantic among politicians and trade associations.
Although no specific search engine is mentioned in the parliamentary resolution, Google is clearly the target. For several years, the European Union has been investigating Google, prompted by the suggestion that the company favours its own products and services over those of its rivals when returning search results. Through linking together its search engine activities with its other products and services, Google has gained a competitive advantage that others have found it very difficult to compete with. It is claimed that Google’s share of the search market across Europe is around 90%, which quite obviously leaves little room for its competitors.
Unbundling Possibilities
In practice, unbundling the link between Google’s search engine and its other products and services means dividing the company in two. One part would solely provide search services and the other part would control its other products and services like Gmail, the Android operating system and YouTube. But the question remains of whether the EU has the power to break up a US company.
