The European Parliament, backed strongly by German politicians, is preparing a draft resolution calling for the breakup of Google in Europe. The move is expected to cause pressure on the European Union to intensify its crackdown on what it deems are Google's monopolistic business practices in Europe.
The draft motion, seen by the Financial Times, calls for the "unbundling [of] search engines from other commercial services" as a means to level the playing field. The proposal does not explicitly point out Google, but it is clearly aimed at Google, as it is the dominant search engine with a 90 percent market share in Europe.
Google has come under fire in Europe and is currently facing antitrust investigation supposedly for using its dominance in search to promote its own products while pushing down search results from other companies with competing products.
Yelp, for example, argues that Google favors its Google+ reviews over Yelp even when people explicitly search for reviews by Yelp users. Google has since proposed a settlement, which was ultimately rejected by then European Union competition commissioner Joaquin Almunia.
The search company is also under fire for its privacy practices and how it has handled the European Union's ruling on the right to be forgotten, which mandates that European citizens can ask for Google to take down unwanted links about themselves.
"Too dominant market positions have never been good for the market," says Andreas Schwab, a German member of the European Parliament and one of the members who drafted the proposal. "We're just pointing out that there are tools the commission can use."
Schwab, who proposed the resolution with Spanish member of parliament Ramon Tremosa, believes the measure will be "very likely" adopted as he says it is strongly supported by both the European People's Party and the Socialists, as well as major media groups and telecommunications companies in Europe.
The proposal comes at a particularly interesting time for the European Union as new competition commissioner Margrethe Vestager, who replaced Almunia on Nov. 1, promised to look at all sides of the "multifaceted and complex" issue before coming to a decision on Google's antitrust case.
The European Parliament, which can draft measures that cover all European Union countries and restricted only by national legislatures, has no formal power to order the split of Google. Even so, it has growing influence over the European Commission (EC), the European Union's legislative arm, which implements regulations submitted by the parliament.
The Financial Times reports that Google only learned of the proposal "in the past couple of days" when one of the members of the European Parliament contacted Google officials to ask about the resolution.
Mountain View executives, it is said, are naturally furious over the reactionary nature of the proposal, saying it is a political ploy to get the EC to give Google a tougher hand.
A source cited by the publication claims the proposal is a "politically motivated campaign to do something that is a regulatory matter."
"These guys are calling for the breakup of Google," the source says. "That is not in proportion to the degree of concern articulated by the commission during its investigation."
Although antitrust experts believe the proposal should be a cause of concern for Google, they don't think it would be easy for a European regulating body to order the breakup of an American company. Asked how the EC would move to separate Google's search business from its other products, University of Iowa expert on European antitrust law Herbert Hovenkamp, who worked for Google in 2010, says he doesn't know.
"I think it'd be very difficult for Google to disaggregate all its own assets and interests from Google Search just in Europe. I'm not saying it couldn't do it, but it would be costly," he says. "You'd get a lot of squawking from European consumers because it would deteriorate the quality of Google search quite a lot."
Keith Hylton, professor of law at Boston University, agrees. Though he thinks Google is up for a harsher punishment from the EC, he also thinks the proposal is unfair.
"The European Parliament has no authority to break up Google -- and I'm surprised that this sort of legislation isn't considered unfair, since it targets one entity for punishment," Hylton says.
