Europe in Favor of Google Break-Up | Free Essay Example

Europe in Favor of Google Break-Up

Words: 1654
Topic: Business & Economics
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History

Google is one of the most used search engines in the world. The company has gained global recognition for its good products, exemplary business model, growth of technology, and positive influence in the society. Google enjoys a lot of success and controls a sizeable share of the European market. However, recent events in the European Union have put its business under close scrutiny.

According to reports, Google is being accused of promoting unethical business practices in the European market, by favoring its results in searches made by people over the internet (Trigs par. 4). This issue has dominated proceedings in the European parliament for the last couple of weeks, as politicians deliberated on the most appropriate way of addressing the issue.

According to experts, Google should be punished for eliminating competition and betraying the trust of other industry players who entrust it with their information. The European parliament debated on whether it was the right move to break up Google from other online services. Google is being accused of violating a signed agreement that required it to display both its content and that of competitors in an equal manner.

Summary

On 27th November 2014, politicians in the European parliament had a voting exercise that favored the idea of unbundling Google from other online services. A total of 558 votes were cast during the parliamentary exercise. 384 of the total votes cast were in favor of breaking up Google, while 174 members voted against the proposal (Trigs par. 1).

56 members of the parliament refrained from voting. In the weeks preceding the monumental voting by the European parliament, a number of media outlets had reported on the proposal that was before the parliament in regard to this issue. The proposal was developed following a number of complaints forwarded to the European Union’s in regard to the way Google was not honoring its agreement with other online service providers (Southern par. 2).

The European Union does not encourage businesses that use their dominant market position for selfish gains such as eliminating competition. In this case, the European parliament established that Google was abusing its position as a dominant player in the market by failing to display content provided by its competitors as per the agreement (Trigs par. 6).

Experts that supported the proposal argued that such unethical practices by a dominant and highly influential market player like Google was a great source of threat to the growth of the economy.

The main concern of the politicians was the manner in which Google was limiting equal access to information, services, and products available online because of the way it displayed search results (Trigs par. 6). They argue that Google has been using discriminatory approach in displaying search results, as its most favored content always appeared in the first pages.

Experts argue that this decision by the European parliament may further compromise the future of Google in the continent’s market. Early this year, the European commission passed a policy called the Right to be Forgotten, which focused on eliminating companies that were selfishly limiting the growth of their competitors. Experts believe that the vote in favor of breaking up Google will further reduce the company’s influence in the European market (Southern par. 3).

It is important to note that before the European parliament made its decision through voting, the United States Congress had earlier made numerous efforts of convincing the politicians to reconsider the proposal (Southern par. 9). Reports indicate that laws regulating use of search engines are quite different in the United States compared to countries that belong to the European Union.

In the United States, Google has been given the freedom to display search results on their own terms, regardless of whether the content is theirs or of a competitor (Trigs par. 4). Reports indicate that it is highly possible that Google did not conduct a thorough market research in Europe, especially on legislation providing guidelines on the need to promote competition.

Others elements that the complainants were not comfortable with included the manner in which Google regulated their competitors from advertising with their services, plagiarized content, and the fact that the company had the exclusive rights on advertisements (Southern par. 4). These reasons contributed a lot to the development of the proposal to break up Google from other online services in the European market.

Experts argue that the European parliament made the correct decision, as this will set example to companies across various industries against abusing their dominant market positions. Experts believe that consumers have a right to make their own choices in terms of the kind of goods or services they want (Southern par. 5). The claims made against the company show that there were numerous online service entities, which were experiencing little growth due to the insensitivity of one dominant player.

The situation of Google after the vote

Legal experts that have weighed in on the debate argue that all is not lost for Google despite the big decision by the European parliament. They have given three major reasons as to why the company can remain hopeful of continuing with its activities in the European market (Trigs par. 2).

The first reason is that it is not the first American company to have such an experience from regulators in the European market. Reports indicate that a couple of years ago, Microsoft had a closely related battle in the European market, when some competitors tried to halt its penetration and dominance in the market.

Over the last couple of years, regulators of the European market have been very negative in regard to giving technology companies from the United States a chance to influence their market and achieving dominance in the end (Southern par. 7).

The legal experts also argue that Google ought to have been given a chance to implement its business policy like every company does. With the concept of global mobility of labor and resources becoming an increasingly important element of the contemporary business world, Google should have been given enough freedom to penetrate and influence the market.

The second reason given by the legal experts is that the decision made by the legislators through voting is just symbolic for the time being (Trigs par. 2). The decision made by the European parliament in favor of breaking up Google does not have any legal weight until the European commission gives an approval for the unbundling to proceed.

This means that the European commission, which is the executive arm of the European Union, will decide the future of Google on their market based on the kind of legislation they will propose as a solution to this problem (Southern par. 5). Experts argue that the overwhelming support that the proposal received from the politicians is likely to compel the commission into passing a legislation that will negatively affect Google (Trigs par. 2).

It is expected that Margrethe Vestager, who heads the commission will make a sound decision on the case that was filed in the year 2010. Reports indicate that Vestager’s predecessor had unsuccessfully tried to resolve the case. Reports indicate that the process of making the decision will be closely followed by all the involved parties, as well as various media outlets and the global population as a whole.

The reason for this is that the commission had never in the past, made a decision that required a company to break up its services with competitors in the same market (Southern par. 5). Experts predict that the commission might fail to pass such legislation for the first time with this case, because of the numerous concessions that the company had made without success.

They also predict that a tussle is likely to erupt between the politicians and the commission if a long lasting solution to the problems caused by Google is not identified in the legislation that will be passed (Trigs par. 6).

The third reason as to why Google can be hopeful is that the decision passed through the parliamentary vote did not specify the search engine being accused (Trigs par. 3). The statement made by the politicians focused on clarifying that their intention of passing the vote was to support the growth of the digital economy by encouraging competition and stopping dominant market players from abusing their influence.

Since Google owns 90% share of all searches made in the European Union, it has become a dominant force as more and more people rely on it at the expense of other service providers (Southern par. 4). Experts argue that with this kind of market performance, it is obvious that Google was the main target of the proposal despite not being named.

This means that any decision made by the European commission should be directed towards all companies providing online search services, regardless of their influence in the market or the economy. In addition, the legislation should focus on ensuring that search engines are separated from all the other business services (Trigs par. 3). The most likely outcome for Google in this case is having increased regulation and unbundling from commercial services.

Conclusion

Google is the most dominant online service provider operating in the European market. Over the last couple of years, several other service providers have entered the same market with the hope of gaining a sizeable share of the growing digital market. However, due to the dominance of Google, these companies have struggled to influence the market and acquire a good number of customers. They argue that Google regulates the way people access information for their own selfish gains.

This accusation compelled the European parliament to come up with a proposal that will reduce Google’s dominance in the market in order to allow for growth of competition. With the parliament already having made the decision in favor of breaking up Google, the fate of the company and other service providers lies in the legislation that the European commission will pass.

Works Cited

Southern, M. The Vote Is In: European Parliament is in Favor of Breaking up Google. 2014. Web.

Trigs, R. European Parliament Votes in Favor of Google Break-Up. 2104. Web.