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Google Breakup: Wrong Answer To EU Antitrust Concerns

Market forces will achieve better results than the European Parliament's proposal to separate Google Search from the rest of the company.
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European Parliament officials may seek the breakup of Google as a remedy in the European Union's antitrust investigation of the company.

The Financial Times on Nov. 21 reported that a draft proposal to address Google's dominance in Internet search suggested the "unbundling [of] search engines from other commercial services" as a possible resolution.

Breaking up Google doesn't sit well with US government officials. The US Mission to the European Union, based in Brussels, Belgium, emailed the EU on Tuesday to express concern about the proposal, according to The Wall Street Journal.

The European Parliament doesn't have the authority to force a breakup but can put pressure on the European Commission, the EU's competition regulator, to do so.

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In January, Google settled the US Federal Trade Commission's antitrust inquiry, to the displeasure of Google's rivals.

The following month, Google settled the European Commission's four-year antitrust investigation into its search business, addressing concerns that it used its search dominance to promote its own services at the expense of competitors. The company agreed to several concessions. For example, when it promotes specialized search services such as Google Shopping on search results pages, it agreed to also advertise the services of three rivals in a fair manner.

But the European Commission reopened its investigation in September following complaints from Google's competitors that the settlement didn't go far enough. Google's Android business also faces a separate antitrust inquiry.

A breakup of Google appears to be unlikely. In 2000, US federal judge Thomas Penfield Jackson ordered the breakup of Microsoft for violating US antitrust law. That ruling was overturned on appeal and it's doubtful a similar ruling against Google would survive the judicial process in Europe or elsewhere. Google's behavior simply isn't that egregious; it may favor its own services in search results, but many companies do the same. Amazon, Apple, Microsoft, and other technology companies all promote their own products within other products they own.

Search is a matter of free speech; at least one US court has already said as much. Google should be allowed to present whatever lawful information it wants in its search results. Search results represent one possible view of what's relevant for a given search query. There's no one right way to do it and, if Google gets it wrong, it's up to another search company to offer superior results.

Though Google dominates the European search market with 87% of the online advertising market, according to rival-backed advocacy group FairSearch.org (a percentage roughly comparable to Microsoft's former desktop dominance), it achieved its market share by building a better search engine than rivals.

Google doesn't dominate everywhere: It has only a quarter of the search market in Russia and less than 5% in China. The EU seems to want to follow in the footsteps of those countries by putting Google at a disadvantage.

Rather than pushing for the breakup of Google, the European Commission should focus on preventing anticompetitive bundling and contracts while allowing the search market to sort itself out.

That's already happening to some extent. Mozilla plans to replace Google with Yahoo as the default search engine in Firefox in the US next year. Something similar may also occur with mobile Safari when Google's default placement deal with Apple expires. And Mozilla is working on a more inclusive search interface for Firefox, one that presents alternative search engines as a person types a query.

Google has long argued that competition is only a click away; it may also be achieved by browser interface improvements and a change in default search engine settings.

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