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Google in deep trouble in Europe

by on10 September 2014

Regulatory pressure mounting

Pressure is mounting on Google as it faces some real regulatory challenges in the EU. Regulators pushed the company to give up more in an antitrust settlement and are demanding that Google make changes to its search algorithm. It all started in 2009 when Mario Costeja, a lawyer in Spain, objected that entering his name in Google’s search engine led to legal notices that he said were no longer relevant.

When Google initially settled with regulators in February, it agreed to make modest adjustments to its search formula and avoiding a fine. However not it seems that deal is in trouble and the regulators could toss out the settlement and bring formal charges, which could prompt billions of dollars in penalties and major changes to Google operations.

But it is not just things like the “right to be forgotten.” Top publishers have publically said that they are terrified of Google’s control and power over their industry.

Google has been fighting back by tripling its lobbying budget in Brussels to as much as $2 million annually, according to public records. It has hired political insiders, including Antoine Aubert, a former policy manager in one of the European Commission’s ministries. Google has joined lots of groups to advance its interests, with some, like the European Privacy Association, ironically getting slammed for a lack of transparency.

In the US such schemes have done very well as politicians are used to giving corporates who spend a lot their undivided attention. However Google is finding the EU a tougher nut to crack, and while the UK is prepared to give the US whatever it wants, the search engine outfit is finding itself at odds with continental Europe where it has 90 per cent of the market.

However on another antitrust front, regulators have begun a preliminary investigation of the company’s Android. In this area they are examining many complaints from competitors like Aptoide, a Portuguese app store provider that says Google’s search results favour the Google Play app store. Other complaints have come from an association of photo libraries and a telecom company that Google skews search results.

In Germany, publishers are fighting in court over compensation for the “snippets of text” that appear with Google News updates.

It is getting incredibly messy for Google, and it is likely to get messier in the future, unless Google wakes up and realised that its “do no evil” mantra is no longer believed in the EU.

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