THE BLOG

Google Antitrust Case: Can European Institutions Do Anything Other Than Investigate U.S. Tech Companies?

04/03/2015 04:03 pm ET | Updated Jun 03, 2015

To the attention of the European Parliament and Margrethe Vestager European commissioner for Competition, Günther H. Oettinger, European Commissioner for Digital Economy Society and Andrus Ansip, Vice-President for the Digital Single Market.

After investigating Google's behavior for several years, the EU's antitrust commission seems finally ready to file its formal charges. Indeed, a story on the Wall Street Journal --"EU Prepares Google Antitrust Charges" -- hints at the possibility that Google manipulated some search results in its favor, thus unleashing the anger of small and large organizations that do business over the Internet.

Actually, this is just the last episode of a war waged many years ago by European authorities against the U.S. high-tech giants. Google has also been subject to hefty restrictions imposed by specific EU national countries, as well described by the New Yorker in 2014 and the Economist in 2013 ("France v. Google"). And last November the European Parliament passed a resolution for its antitrust commission to examine a possible separation of the search engine's business from other commercial services provided by Big G and similar companies.

Already in 2011 PC magazine explained that, due to the many issues raised by German authorities, Google Street View had been blocked indefinitely in Germany. Also, many powerful German publishers fear that Google is gaining too much power throughout Europe: its search engine is being used by more than 90 percent of European users, a higher percentage than in the U.S. To prevent an even broader reliance on Google search and news services, they are asking Google to pay copyright license fees. It seems that now the economic power of German politicians has forced all other EU member states to join this senseless war against the U.S. corporation.

However, so far Google has successfully opposed this high-level pressure. At the end of 2014, an attempt by about 200 German media publishers to prevent Google News from providing a preview of their online content failed, when direct traffic to their own websites collapsed. Same thing in Spain, where online news outlets were quick to re-open their doors to Google News.

In Italy there was a long debate about a possible "Google Tax" law, stating that services and products sold over the Internet can only be purchased by companies with a VAT account registered in Italy. According to MP Francesco Boccia, this new law would have brought more than a billion euros to the state coffers just by targeting Google, but Professor Maffè proposed a more realistic and much lower figure. France and UK embraced a similar proposal on the basis that Google has huge advertising revenues worldwide but pays very small taxes to local governments. But the whole went nowhere. And more importantly, is this actually Google's fault or that of some European countries that for years have held secret agreements with Google itself?

We should investigate the actual reasons behind such long-term attacks launched by EU authorities against U.S. high-tech giants. It's truly a matter of justice? Or maybe the real issues at stake here include a lack of innovation by overall European companies and a pure desire to exercise a reckless power by EU institutions?

Probably European bureaucrats should take a closer look to The End of Power, a book published last year by Moisés Naim, former director of the World Bank. Naim explains in clear terms today's power shifting: our new world needs a globalized and long-term vision to succeed.
We should not forget that EU companies have a know-how and expertise far superior than that of many other countries, and its universities and research centers are still on the cutting edge -- like Geneva's Cern or the European Space Agency. Therefore, EU regulators should help them to become more and more competitive, while also developing a unified strategy among the various Old World actors. However, they seem unable to establish fair regulations for all and are even proposing budget cuts (800 million euros in 2016) for the "Horizon2020" program aimed at promoting innovation projects developed by European companies and public bodies as well.

In her 2013 book dispelling the private vs. public sector myths, Mariana Mazzucato, Professor of Science and Technology at the University of Sussex, clarifies that while it is true that most of today's major technologies were born in the Silicon Valley, they were actually developed thanks to public funds directly provided by the US government. Therefore public institutions should always protect and promote innovation, particularly in our borderless high-tech landscape.

Instead EU authorities are planning budget cuts to R&D projects and oppose even a reasonable suggestion to reduce the ebook VAT from 22 percent to 4 percent -- as proposed by Italian politicians. Under heavy pressure from France and Luxembourg, recently the European Court declared that ebooks cannot be considered as printed book, and therefore they do not deserve an exception to VAT regulations for electronic devices. And in another example of such ambivalent policies, the EU is very eager to protect online privacy but seems much less interested in providing security and health services for its entire population.

As a true believer in a unified Europe, I dream a continent willing to invest in future generations and ready to support all viewpoints -- a diversity that reinforces a common vision and builds fair opportunities for all European citizens. Instead, today European leaders appear disorganized, without a common vision or strategy in many areas and issues, including the defense sector and this on-going antitrust battle against Google.

EU authorities can continue to persecute Google, but they cannot avoid coming to terms with their own future. It is true that some US high-tech companies have a very strong presence in the EU market, and they must be monitored and even sanctioned for any wrongdoing. But such a coalition of powerful and influential countries cannot limit itself to scare tactics and unfair policies. Given the above picture, it seems very appropriate to end here with an excerpt from the Ventotene Manifesto, co-authored in 1941 by Altiero Spinelli, one of the Founding fathers of the European Union:

The moment has arrived to know how to discard old onerous burdens, how to be ready for the new change that is coming and that will be so different from what we expected; to put aside the inept among the old, and create new energies among the young. Today those who have perceived the reasons for the present crisis in European civilization are seeking each other, and are trying to plan future. In fact they are gathering the inheritance left by all those movements which worked to raise and enlighten humanity, and which failed because of their incapability to understand the purpose to be achieved or the ways how to achieve it.