Google needs to debunk European charges


First Posted: 12/2/2014

There is a war going on in Europe that could have a significant impact on the U.S. and its economy.

No, not Vladimir Putin’s expansionist forays into Crimea and Ukraine, although that’s a nasty business. More worrisome is what seems to be Europe’s war against American tech companies — especially Google.

The Economist magazine has quaintly dubbed this Googlephobia, but that underplays the circumstance.

On Thursday, members of the European Parliament voted overwhelmingly to take the first steps toward a breakup of Google in Europe. This was pushed by its two largest economies, Germany and France. It is likely to be the first of many actions against what the French refer to as “les Gafa,” referring to Google, Apple, Facebook and Amazon.

We get it. Europe has long grumbled that Google has 68 percent of the market of web searches in America and more than 90 percent in many European countries. The numbers are similar with the other three.

But what galls European officials is that, with U.S. firms’ enormous reach, they pay relatively little in corporate income taxes and slip beyond the reach of some of the European national regulators. And we all know how Europeans love their national regulators.

Most of this boils down to protectionism. The objection is that European companies have so far been unable to compete. Among the loudest voices are two German media giants.

The most serious claim is that Google’s search intentionally downgrades competitors, making it impossible for others to reach scale. This places the burden on Google to show that it does not engage in anti-competitive practices. However, you have to wonder whether the inability of European entrepreneurs to swiftly innovate and compete has something to do with Europe’s heavily regulated business environment — the anti-Silicon Valley, you might say.

There is one European concern we definitely share, however: User privacy.

Critics have called on Google and Facebook to further limit the use of personal data they collect. They favor an “opt-in” policy for gathering information rather than the current “opt-out”.

We’ve been saying that for years.

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